International Trade
Cargo that has arrived at Puerto Cabello:
- Over 1,767 tons of milk
from Sancor Cooperativas Unidas for state agency CASA
- 612 tons of sunflower
and safflower from Bunge Argentina for state agency CASA
- Over 524 tons of
appliances from Honour Lane Shipping for Lilly & Associate
- Over 370 tons of cheese
and unsalted butter from Uruguay for General de Alimentos Nisa S.A., and
the Venezuelan Foreign Trade Corporation (CORPOVEX).
- Over 365 tons of bond
paper from Int Paper Expodoca for state owned INVEPAL
- 154 tons of
transformers and other equipment for power distribution from Uniled
Conveyor Corp. for the National Electricity Corporation (CORPOELEC)
Logistics & Transport
Air fares now must be paid for in US$ dollars
General Giuseppe Yoffreda,
Minister for Aquatic and Air Transportation, has advised international airlines
operating here that they will receive no requests for FOREX reimbursement in
2015, according to a source in the industry - which indicates they will have to
sell inventory in US dollars. The Venezuelan government still owes
international airlines around US$ 3.6 billion for previous operations. More in
Spanish: (El Nacional; http://www.el-nacional.com/)
International air cargo carriers to pay fees in US$
dollars, according
to a resolution by the Ministry for Aquatic and Air Transportation. More in
Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/transporte-de-carga-aerea-pagara-tarifas-en-dolare.aspx#ixzz3QrmlieAI; AVN, http://www.avn.info.ve/contenido/aéronaves-extranjeras-deberán-pagar-divisas-prestar-servicios-país)
Oil &
Energy
Venezuela ends Algeria oil imports due to logistical,
price issues
State oil company PDVSA has stopped purchases of
Algerian light crude to blend with its extra-heavy oil because of technical
problems and disagreements with the seller, sources said. The decision ends a
cost-saving effort launched in October to use Algerian Saharan Blend instead of
costlier heavy naphtha as a diluent for domestic Orinoco Belt crude, the oil
that accounts for about 40 percent of Venezuela's output. (Reuters, http://www.reuters.com/article/2015/02/05/us-venezuela-oil-imports-idUSKBN0L92KQ20150205)
Refiner CITGO sweetens terms on US$ 2.5 billion
financing package
Venezuela's U.S. refining unit CITGO was forced to
sweeten the terms of a US$ 2.5 billion financing package aimed at pumping new
cash into the coffers of state-owned oil company PDVSA. Skepticism over the
ultimate goal of the transaction are forcing Citgo to offer investors a yield
close to 12%, much higher than originally anticipated, according to IFR.
(Reuters, http://www.reuters.com/article/2015/02/05/citgo-pete-debt-idUSL1N0VF1U920150205)
Commodities
40% scarcity in spare parts for agricultural
machinery
Erich Hartkopf, head of the association which
represents spare parts distributors for heavy equipment and agricultural
machinery, reports there is 40% scarcity in spare parts for agriculture. More
in Spanish: (Ultima Hora Digital; http://www.ultimahoradigital.com/noticiadetalles.php?idart=680)
Chemical,
petrochemical sector has raw materials for two months
Juan Pablo Olalquiaga, president of the
Chemical and Petrochemical Industry Association (ASOQUIM) reports that the
government owes the industry around US$ 350 million, out of which US$ 250
million are due since 2013. He says price controls have adversely affected
household products due their low marketing price and companies "can no longer produce them." (El Universal, http://www.eluniversal.com/economia/150205/venezuelan-chemical-petrochemical-sector-has-raw-materials-for-two-mon)
The US$ 755 condom
pack is the latest indignity in Venezuela
Venezuelans now face a new indignity: Condoms
are hard to find and nearly impossible to afford. The impact of reduced access
to contraceptives is far graver since Venezuela has one of South America’s
highest rates of HIV infection and teenage pregnancy. (Bloomberg, http://www.bloomberg.com/news/articles/2015-02-04/the-755-condom-is-the-latest-indignity-in-venezuela)
Economy
& Finance
MORGAN STANLEY: Venezuela: Dealing with the dollar
deficit
A credit event can be avoided in 2015… We look closely
into the balance of payments to assess the risks of a potential crisis and
conclude that although lower oil prices are likely to push the current account
into deficit and add to already high external financing needs, the public
sector has assets abroad that, if used, could be enough to bridge the gap this
year...by drawing down external assets: Drawing down external assets could help
to avert a crisis in the balance of payments, but provides little market
relief, as: i) The strategy provides no solution to the underlying economic problems
and adds evidence that Venezuela is running out of alternatives while adding to
the already large imbalances that would continue to weigh in 2016; and ii) Lack
of transparency on official data raises questions about asset valuations and
liquidity and the government’s real ability to use these to cover hard currency
needs.
New exchange system ready to be launched
The National Association of Stock Brokers (ANOV)
stressed on Wednesday that the operability of the foreign exchange system soon
to be implemented is secured. The National Association of Stock Brokers (ANOV)
stressed on Wednesday that the operability of the foreign exchange system soon
to be implemented is secured. Exchange
operators have reached an agreement with authorities to guarantee the system's
operations and the technological platform - the same one used for the SICAD II
system - is ready and proven in real time. The exchange rate fluctuates freely
as a result of supply and demand. In principle it has been agreed that
transactions above US$ 1,000 will go though the official public exchange, while
those under that amount will be handled by exchange firms. Companies
will be able to legally register transactions within the system on their books
and apply them to the sale of goods and services, according to financial
sources. (El Universal, http://www.eluniversal.com/economia/150205/operators-lay-down-criteria-for-new-forex-system;
and more in Spanish: El
Universal, http://www.eluniversal.com/economia/150206/nuevo-sistema-cambiario-esta-listo-para-funcionar; El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/empresas-podran-trasladar-a-su-contabilidad-dolar-.aspx#ixzz3QltqE3Ig)
Venezuela bondholders haunted by Chavez-era legal
claims
Bond investors wondering whether President Nicolas
Maduro will be able to scrounge up enough cash to repay them are starting to
realize they’re not alone. Last week, a Paris court ordered Venezuela to pay
Gold Reserve Inc. US$ 746 million to compensate the company for mining permits
that were canceled in 2008 by then-President Hugo Chavez. If Venezuela fails to
pay within 30 days and doesn’t appeal, the nation would violate debt agreements
that require it to honor judgments exceeding US$ 100 million, according to
Barclays. The ruling is part of what Scotiabank estimates may be as much as US$
20 billion in legal claims against Venezuela that are likely to make Maduro’s
efforts to stave off a default even more difficult. (Bloomberg, http://www.bloomberg.com/news/articles/2015-02-05/venezuela-bondholders-haunted-by-chavez-era-legal-claims)
Gold Reserve says open to settlement of US$ 747 million
Venezuela case
Gold Reserve is in talks with Venezuela about an arbitration
award that granted the company more than US$ 740 million and is open to a
settlement, its president said on Wednesday. The award, which bears interest of
LIBOR plus 2 percent, now stands at nearly US$ 747 million, U.S.-based Gold
Reserve President Doug Belanger said in an email. Belanger added that Venezuela
had in the past indicated it was eager to settle. (Reuters, http://www.reuters.com/article/2015/02/04/venezuela-goldreserve-idUSL1N0VE24220150204)
Seven charts show why Venezuela's economy is a basket
case
Venezuela's economy is set to shrink by 7% in 2015,
according to the International Monetary Fund's (IMF) latest figures from last
month. The IMF cannot see any improvement this year. Venezuela stopped
publishing its GDP figures in 2013 but the problems are clear in the long
queues for food and regular electricity blackouts. Why is the Venezuelan
economy doing so badly? Oil exports account for 95% of Venezuela's exports. But
oil prices have fallen from US$ 112.36 a barrel in June 2014 to US$ 52.99 a
barrel in January 2015. At the higher price, Venezuela's daily output of two
million barrels of crude oil would have been worth US$ 82 billion a year. Now
it is worth US$ 38.6 billion. The country spent US$ 60.5 billion importing
goods and services yet the state owned oil company, PDVSA, received some US$ 39
billion for its [oil] exports. (The Telegraph, http://www.telegraph.co.uk/news/worldnews/southamerica/venezuela/11385055/Seven-charts-showing-why-Venezuelas-economy-is-a-basket-case.html)
Politics and
International Affairs
Government prioritizes radicalization over reform, 20
businessmen arrested this year
On February 1st the president, Nicolás Maduro,
announced the arrest of several directors and managers of a big chain of
pharmacies, FARMATODO, and other businesses, accused of exacerbating long
shopping lines in what he calls "an
economic war" underway. Jorge
Roig, President of the nation's largest business organization (FEDECÁMARAS)
says the regime is improvising because they are desperate and has called jailed
businessmen political prisoners. At the same time, Defense Minister
General Vladimir Padrino, issued a resolution outlining rules of engagement for
the military in dealing with violent demonstrations, including the use of
deadly force, although the armed forces (with the exception of the national
guard) are constitutionally barred from these type of public order
responsibilities. These developments suggest that the already-critical economic
situation is set to worsen further as the government dismisses calls for reform
and is instead threatening to radicalize the existing economic model further.
With a parliamentary election due before the end of the year, that bodes ill for
the government's prospects. The business environment will continue to weaken
amid concerns over nationalization, prompting further capital flight. (The
Economist Intelligence Unit, http://country.eiu.com/article.aspx?articleid=392793423&Country=Venezuela&topic=Economy&subtopic=Forecast&subsubtopic=Policy+trends&u=1&pid=1412663925&oid=1412663925&uid=1;
Reuters, http://www.reuters.com/article/2015/02/05/venezuela-pharmacy-idUSL1N0VF0OQ20150205;
Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=42670&idc=3;
El Universal, http://www.eluniversal.com/economia/150205/drugs-store-farmatodo-directors-remanded-in-custody
and more in Spanish: El Nacional; http://www.el-nacional.com/)
Maduro seeks UNASUR and CELAC mediation, US tells him he
can communicate "directly"
President Nicolas Maduro has asked the Secretary
General of the Union of South American Nations (UNASUR), Ernesto Samper to
mediate between Venezuela and the US. Maduro called on the US president to
"rectify and stop in time the coup
plan (that would see) the destruction of Venezuela." Samper claims
that the fact that the United States revoked his visa 20 years ago does not
preclude him from undertaking an "institutional"
endeavor to ease tensions between Caracas and Washington - but the US
Department of State quickly urged the Venezuelan government to communicate
"directly" with Washington
through diplomatic channels, and said "we
have received no such request from UNASUR, nor do we expect one". Maduro
also spoke with Ecuadorean President Rafael Correa, who is the president
pro-tempore of the Community of Latin American and Caribbean States (CELAC),
and Ecuadorian Foreign Minister Ricardo Patiño, as pro-tempore president of
CELAC (Community of Latin American and Caribbean States), and member of the
group of Foreign Ministers (of the Union of South American Nations), has announced
a meeting of Foreign Ministers to address the situation of Venezuela. (Latin
American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2372623&CategoryId=10717;
BBC, http://www.bbc.com/news/world-latin-america-31142684;
Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=42672&idc=1;
El Universal, http://www.eluniversal.com/nacional-y-politica/150205/ecuador-announces-meeting-of-latin-american-fms-to-talk-about-venezuel;
http://www.eluniversal.com/nacional-y-politica/150205/samper-says-lack-of-us-visa-does-not-preclude-him-from-being-a-mediato;
and more in Spanish: Diario 2001, http://www.2001.com.ve/en-la-agenda/89775/gobierno-de-eeuu-espera-dialogar-con-maduro-y-sin-intermediarios.html; El Universal, http://www.eluniversal.com/nacional-y-politica/150205/washington-invita-a-lograr-comunicacion-de-una-manera-directa)
Six out of 10 Venezuelans have to line up to purchase
food staples,
regardless of their social status, according to the National Users’ and
Consumers’ Alliance (ANAUCO). The
organization reports that in addition to long lines, the numbers of products
that can be sold are sometimes limited to one unit in grocery stores,
drugstores and other businesses. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=42660&idc=3)
60% blame Maduro for the crisis
The DELPHOS polling firm says 60% of all Venezuelans
do not believe the story that "economic
warfare" is behind shortages and the high cost of living, and blame
President Maduro for the situation. The firm's director Felix Seijas says
"even radical chavistas say it is
Maduro's fault because Chavez would have solved it". Seijas says
Maduro's popularity is around 20%. More in Spanish: (El Nacional; http://www.el-nacional.com/)
US intelligence chief expects massive protests in
Venezuela this year
General Vincent Stewart,
head of the Department of Defense intelligence agency has told the US Congress
that "the Maduro regime will face
massive protests in the months ahead of parliamentary elections this year."
More in Spanish: (El Nacional; http://www.el-nacional.com/)
Parliamentary election not scheduled yet
Sandra Oblitas, Vice-President of the National
Electoral Council (CNE) reports the Elections Board would set the date of the
upcoming parliamentary election. The Board will announce the date once a
schedule is defined. (El Universal, http://www.eluniversal.com/nacional-y-politica/150205/electoral-council-parliamentary-election-not-scheduled-yet)
Former San Diego’s Mayor Enzo Scaranno and its police
Chief Salvatore Lucchese concluded their
10-year and fifteen-day sentence this Wednesday, most of which they spent in
isolation at the Ramo Verde military prison. Both were found guilty of not
doing anything to prevent demonstrations in their district in February 2014.
(Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=42674&idc=1)
