March 17, 2016

International Trade

 

Uruguay “firmly” demands that Venezuela repay pending debt

Uruguay’s Foreign Minister Rodolfo Nin Novoa reports that his government has sent a “very diplomatic, but very firm” note to his Venezuelan counterpart demanding new talks on the repayment of a long standing debt for food exports. He added that Uruguay seeks to “irrefutably document the debt from one State to another, that one State admit it owes the other State that much money, because it not only involves dairy products, rice and chicken, but other important agribusiness ítems that were beyond that negotiation”. More in Spanish: (Notitarde, http://www.notitarde.com/Economia/Uruguay-exige-de-manera-firme-a-Venezuela-que-reconozca-deuda-atrasada--/2016/03/16/913644/)

 

Pérez Abad: E-commerce quota will not be removed from new FOREX system

Miguel Pérez Abad, Vice-President for the Economic Area and Economy Minister, has once more denied that the electronic quota in dollars for purchases abroad would be eliminated, following the implementation in past days of a floating forex rate called DICOM. He said "they (his administration) respect the quotas," adding that more foreign currency, when available, would be allocated to this mechanism. (El Universal, http://www.eluniversal.com/economia/160316/perez-abad-e-commerce-quota-will-not-be-removed)

 

 

Oil & Energy

 

Venezuela to shut down for a week to cope with electricity crisis

Venezuela is shutting down for a week as the government struggles with a deepening electricity crisis. President Nicolas Maduro gave everyone an extra three days off work next week, extending the two-day Easter holiday. Maduro had originally said over the weekend that the extended holiday would only apply to state employees. The government has rationed electricity and water supplies across the country for months and urged citizens to avoid waste as Venezuela endures a prolonged drought that has slashed output at hydroelectric dams. The ruling socialists have blamed the shortage on the El Nino weather phenomena and “sabotage” by their political foes, while critics cite a lack of maintenance and poor planning. (Bloomberg, http://www.bloomberg.com/news/articles/2016-03-16/venezuela-to-shut-down-for-a-week-as-electricity-crisis-mounts)

 

Del Pino says 20 countries to attend Doha April meet, talking to Iran

Venezuela's Oil Minister claims some 20 crude producing countries will meet in Doha for talks on April 17 and added he was personally speaking to his Iranian counterpart about the proposal. "The invitation backed by the countries that have proposed the production freeze until the middle of the year as a mechanism to balance prices and stocks will be applicable to OPEC and non-OPEC countries like Kazakhstan, Oman, Azerbaijan, Mexico, Colombia and others," Eulogio Del Pino said. (Reuters, http://www.reuters.com/article/us-oil-opec-talks-venezuela-idUSKCN0WI1R8; El Universal, http://www.eluniversal.com/economia/160316/twenty-oil-producers-to-meet-in-qatar-in-mid-april)

 

 

Commodities

 

Government scrutinizes COLGATE–PALMOLIVE

The National Superintendent for the Defense of Socioeconomic Rights has started an inspection and investigation of COLGATE-PALMOLIVE following charges by some labor representatives that the Company is causing shortages by offering only larger size product linespacking. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/gobierno-mete-la-lupa-en-colgate%E2%80%93palmolive.aspx#ixzz439h8JFEQ)

 

 

Economy & Finance

 

Twitter threat may endanger Venezuela's oil-for-cash China deals

Venezuela’s opposition Congress is threatening to undermine President Nicolas Maduro’s ability to obtain desperately needed cash. On March 1, National Assembly President Henry Ramos Allup said in a Twitter post that Congress may declare invalid financing deals signed by Maduro - when he’s no longer president. “Warning to foreign creditors: contracts in the national interest signed by the Chavista government without approval by the National Assembly will be null and void," said Allup, who has 783,000 Twitter followers. The post was re-tweeted 11,000 times and echoed by Jose Guerra, chairman of the Finance Committee. (Bloomberg, http://www.bloomberg.com/news/articles/2016-03-15/twitter-threat-may-endanger-venezuela-s-oil-for-cash-china-deals)

 

Empresas Polar are committed to Venezuela

Lorenzo Mendoza, Executive President of Venezuelan food manufacturer and supplier Empresas Polar, says the company is committed to the country's future, adding the group has confidence in the future and will keep on making proposals and delivering basic products to Venezuelans. Mendoza added that they are willing to take part in talks with the government provided that they are invited to do so. He said they have not been invited to participate neither in the Productive Economy Council nor in none of the fourteen areas designed to boost the country's economy –known as engines– especially that of the agro-business sector. "Even though special meetings have been arranged, we have not been called formally to hold a fruitful debate for the country's welfare," Mendoza said. (El Universal, http://www.eluniversal.com/economia/160316/lorenzo-mendoza-empresas-polar-are-committed-to-venezuela)

 

SIMADI exchange rate continues to devalue

The official SIMADI FOREX rate rose again to VEB 230.83/US$1, for an incrrease of VEB 5.19, according to Venezuela’s Central Bank. More in Spanish: (Notitarde; http://www.notitarde.com/Economia/Simadi-cerro-en-en-Bs-23083-por-dolar/2016/03/16/913632/; El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/simadi-sube-ligeramente-y-cierra-en-bs--225-64.aspx; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/dolar-simadi-sube-bs-5-19-y-cierra-en-bs-230-83.aspx)

 

 

Politics and International Affairs

 

VP Istúriz: “We have a duty to re-establish relations so that the country may live in peace”

During his presentation to the National Assembly of the reasons for an extension of an economic emergency decree in Venezuela, Executive Vice-President Aristóbulo Istúriz declared that it is fundamental to build confidence in the country to lift it out of crisis. The official decided to attend the Congress regular meeting to seek to hold talks with those who still oppose the government. "We have the duty to re-establish relations so that the country may live in peace," he said, adding: "I have the duty to respond to the opposition and the country," He claimed the reasons behind the executive order include "the economic war" and the "crisis in the oil-rentier model." Central Bank President Nelson Merentes is also scheduled to go before the National Assembly to address the issue of the economic emergency decree. (El Universal, http://www.eluniversal.com/nacional-y-politica/160315/venezuelas-vp-we-have-a-duty-to-resume-relations-for-the-countrys-peac; http://www.eluniversal.com/nacional-y-politica/160315/vp-reasons-for-economic-emergency-in-venezuela-have-not-been-overcome; and more in Spanish: Notitarde; http://www.notitarde.com/Economia/Nelson-Merentes-acudira-este-jueves-a-la-Asamblea-Nacional/2016/03/16/913705/)

 

Maduro: "Only we guarantee that the nation is viable"

President Nicolas Maduro claims that "only we (his government) guarantee that Venezuela is viable." Responding to recent comments by US President Barack, he said there is a "criminal attack" by "an empire that seeks to destabilize the Government of Venezuela. Obama is obsessed with putting an end to the Bolivarian revolution." Directly addressing President Obama he said: "Barack Obama, in Venezuela, the revolution does not surrender, nobody surrenders. Our love for the homeland shall prevail (...) If I ever see Obama face to face I will tell him he is tainted with a stain for threatening our homeland." Obama has said in an interview that he did not want to see the country fail despite the tense relations between Washington and Caracas. "It's not in America's interest to see Venezuela fail, because if Venezuela fails then that could have an impact on the economies of Colombia or Central America or Mexico, and that in turn can affect U.S. economies," (El Universal, http://www.eluniversal.com/nacional-y-politica/160316/maduro-we-guarantee-that-the-nation-is-viable; Reuters, http://www.reuters.com/article/us-usa-venezuela-obama-idUSKCN0WH05H)

 

Congress Speaker says Obama's executive order is not meddling

Congress Speaker Henry Ramos Allup says the one-year extension of an executive order by US President Barack Obama declaring Venezuela an "unusual and extraordinary threat," has "no implications on the country" and is not "meddling." Ramos added: "I personally think that, apropos Obama's remarks, (the government) is using (the executive order) as a mechanism to distract Venezuelans from the hard situation the country is going through in the economic, political and social fields". (El Universal, http://www.eluniversal.com/nacional-y-politica/160316/congress-speaker-obamas-decision-is-not-meddling)

 

Venezuelan legislators to meet with OAS's Almagro in April

Opposition legislator Luis Florido, head of the Standing Committee on Foreign Policy, Sovereignty and Integration of the National Assembly (AN), has announced that National Assembly representatives will meet with Luis Almagro, Secretary General of the Organization of American States (OAS) early in April to request the application of the Hemisphere’s Democratic Charter to the case of Venezuela. Florido's remarks came during the presentation of a report on the tour of Chile and Uruguay he undertook along with anti-government deputies William Dávila and Carlos Valero to denounce the country's current economic, political and social situation, and to seek support from OAS member nations. (El Universal, http://www.eluniversal.com/nacional-y-politica/160315/venezuelan-congress-to-meet-with-oass-almagro-in-april)

 

 

The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.

April 29, 2014

International Trade

Incoming cargo at Puerto Cabello.

• Over 3,00 tons of various paper products in 62 vans have arrived for the state owned paper company.
• Over 1,028 tons foodstuff in 51 containers bearing fruit pulp have arrived from Chile for Industrias Maros
• Over 385 tons of frozen beef in 12 containers, from Brazil to government agencies.
• Over 943 tons of baby formula from Nestle Mexico to their Venezuelan affiliate.
• Over 133 tons of frozen tuna from Cartagena.
• Over 364 tons of aluminum scrap and accessories, from China for CORPOELEC
• 13 Toyota vehicles directly to the government's Petroquímica agency, their cost is 14 tons.

More in Spanish: (El Carabobeño; http://www.el-carabobeno.com/impreso/articulo/99952/-tres-mil--toneladas-de-papel-arribaron-al-puerto-carabobeo)

Bolivia’s debt to Venezuela was U$D 133.4 million at the end of this year’s first quarter, down 14% from 2013, according to Bolivia’s Central Bank. Venezuela ranks second in terms of Bolivia’s creditors after China whose debt comes to U$D 468.5 million. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=39047&idc=2)

Colombia confirms it will restrict natural gas sales to Venezuela

Colombia's Minister for Mining, Amylkar Acosta, has confirmed that natural gas sales to Venezuela will be restricted during all the time the "El Niño" climate condition hits Colombia. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/mundo/colombia-confirma-que-restringira-venta-de-gas-a-v.aspx#ixzz30GsWPf8s; El Mundo, http://www.elmundo.com.ve/noticias/petroleo/gas/gobierno-de-colombia-confirma-que-restringira-vent.aspx; El Universal, http://www.eluniversal.com/economia/140429/colombia-confirma-que-reducira-envios-de-gas-a-venezuela)

Logistics & Transport

Imported food worth U$D 1.66 million found spoiled in Venezuela

Five years ago, the Comptroller General's Office inspected La Guaira dock (Vargas state, north Venezuela) and found dozens of containers filled with food that had expired or was near its expiration date; the food had been imported by state-owned companies. Now, this irregularity was detected again, this time at Puerto Cabello dock (north-central Carabobo state.) As many as 1,714.76 tons of meat and chicken, and 1,000 tons of milk -valued at VEB 10.5 million (U$D 1.66 million)- were found spoiled at Puerto Cabello dock. The meat and chicken spoiled because the cold chain was interrupted, and the milk had reached its expiration date. (El Universal, http://www.eluniversal.com/economia/140426/imported-food-worth-usd-166-million-found-spoiled-in-venezuela)

Food and medicine preservation at risk

Venezuela's Ventilation, Air Conditioning and Refrigeration Chamber has warned that their affiliates manufacturing and selling equipment, spare parts and essential ingredients, such as refrigerating gas, and those providing maintenance in the entire refrigeration chain have entered a "critical stage" due to a scarcity of components and spare parts. They say this "could impact the preservation food and medicine" as well as the operations of clinics and hospitals. More in Spanish: (El Universal, http://www.eluniversal.com/economia/140429/conservacion-de-alimentos-y-medicinas-en-riesgo)

Oil & Energy

PDVSA has signed three new agreements with the private sector (Keystore, C.A., Lubricantes Cark Oil and Inversiones Servioil) to increase lubricant production in the country. PDVSA Refining, Marketing and Supply Vice President Asdrúbal Chávez emphasized the goal is to build a strategic reserve and not just to supply the country “but to also have the capacity to export.” (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=39037&idc=4)

Venezuela to use St Eustatius terminal to load big tankers to Asia -PDVSA

Venezuela's state-run PDVSA will use a terminal owned by U.S. firm NuStar Energy on the island of Saint Eustatius to store crude and load very large crude carriers (VLCCs) going to Asia, after deciding it will no longer rent a facility in the Bahamas, a PDVSA executive said on Friday. PDVSA has been using the Saint Eustatius terminal in the Caribbean since March as a center to store and mix its crudes and produce exportable blends, the Venezuelan oil company confirmed after Reuters reported it this week. The company already started receiving crude tankers at the facility going out from Venezuelan ports. (Reuters, http://www.reuters.com/article/2014/04/25/oil-venezuela-storage-idUSL2N0NH1W920140425)

Venezuela’s oil export barrel averaged U$D 97.71/bbl., slightly up from U$D 97.52/bbl. last week, driven by existing tensions between Russia and Ukraine as well as an increase in US inventories, according to the Oil and Mining Ministry. The average year-to-date price is U$D 96.40/bbl. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=39036&idc=4; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2056049&CategoryId=10717)

Cuba moves ahead with U$D 2.7 Billion LNG, ammonia Projects

Cuba continues moving forward with development of a U$D1.4 billion natural gas re-gasification project and a U$D1.2 billion urea and ammonia plant under a Venezuelan initiative to provide cheap fuel to regional allies. The re-gasification project will have the capacity to process 2.06 million metric tons per year and consist of building facilities to receive and process liquefied natural gas, Petroleos de Venezuela, S.A. said in a December report released last week. The aim of the project is to provide a clean and low-cost energy source to the population, the company said without giving a completion date. The urea and ammonia plant will have the capacity to process 400,000 metric tons per year of urea and 370,000 metric tons per year of ammonia. The project seeks to benefit Cuba’s industrial sector, particularly plastics, industrial agriculture and chemical products, PDVSA said. (Bloomberg, http://www.bloomberg.com/news/2014-04-28/cuba-moves-ahead-with-2-7-billion-lng-ammonia-projects.html)

Commodities

Venezuela’s key beef sector suffers amid financial turmoil

Venezuela’s current financial turmoil is compounding problems for the meat industry, where cattlemen and traders alike say they have been severely buffeted by 15 years of socialist rule. (Global Meat News, http://www.globalmeatnews.com/Industry-Markets/Venezuela-s-key-beef-sector-suffers-amid-financial-turmoil)

Chavez’s farming utopia withers as pet projects abandoned

The harvesters imported to overcome food shortages are gathering cobwebs near a burnt corn field in central Venezuela. A short distance away is the shell of a fertilizer plant and rows of empty red-roofed bungalows. This is the William Lara agricultural commune, the first of five such projects that former President Hugo Chavez said were going to reverse a 11-year rise in food imports and put products back on the nation’s shelves. One year after his death, the last 30 workers on the site are removing equipment, surrounded by 4,300 soccer fields-worth of cleared land baking in the savanna heat. “The president dies and the project dies with him,” Eumir Perez, William Lara’s former coordinator, said in an interview in Calabozo, a town in Guarico state 60 miles (97 kilometers) from the project. “The government is too busy staying in power, fighting against the capitalists’ economic war. No one dreams big anymore.” (Bloomberg, http://www.bloomberg.com/news/2014-04-28/chavez-food-utopia-withers-as-development-plans-left-unfulfilled.html)

Key items that impact inflation the most have been identified

Economic Affairs Vice President Rafael Ramírez says the items that most impact inflation are: cooking oil, milk, cheese, flour, coffee, sugar, fruit preserves, mayonnaise, margarine and actual butter. He said sardines, chicken, beef, fruit juices, rice and ham are also on his priority list. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/estos-son-los-rubros-que-mas-impactan-en-la-inflac.aspx#ixzz30GslxHKl)

Economy & Finance

Government offers funding to companies that support its "economic offensive"

President Maduro says the government will enable "several funds in both FORE and Bolivars" to help companies deal with weaknesses. He mentioned the Chinese Fund, the National Development Fund (FONDEN) and the ALBA-MERCOSUR Fund, in which he said "around VEB 100 billion" would be available. More in Spanish: (AVN; http://www.avn.info.ve/contenido/ejecutivo-ofrece-financiamiento-empresas-que-participan-ofensiva-econ%C3%B3mica; El Regional del Zulia, http://www.elregionaldelzulia.com/ani11/default.asp?ID=8436; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/gobierno-prestara-los-verdes.aspx; El Universal, http://www.eluniversal.com/economia/140429/crearan-fondo-en-divisas-para-creditos-a-empresas-privadas)

Prices rose 4.1% in March as currency market opens

Venezuelan consumer prices in March rose the most during the four months since the government carried out the biggest devaluation since currency controls were instituted in 2003. Prices rose 4.1% last month, up from 2.4% in February and matching the 4.1% - as per an average eight of analysts surveyed by Bloomberg. Venezuela’s central bank released the March data in a political statement on its website and did not provide the latest annual inflation rate, which was last reported at 57.3% in February. (Bloomberg, http://www.bloomberg.com/news/2014-04-24/venezuela-prices-rise-4-1-in-march-as-new-currency-market-opens.html)

Lack of definition increases economic woes in Venezuela

The Venezuelan government is preparing the ground for a new "economic offensive." Five months after the strategy termed "Dakazo," and with an increasingly aching economy due to scarcity and high inflation rates, government authorities are promising "more production, full supply and fair prices." The president's announcement arrived after meetings between businesspersons and government authorities being held since February in the context of the Peace Conferences. Businesspersons hail the rapprochement, but underscore that the Venezuelan government has not yet solved major glitches within domestic production. (El Universal, http://www.eluniversal.com/economia/140426/lack-of-definition-augments-economic-evils-in-venezuela)

Colgate-Palmolive profit drops 16% as Venezuela's Bolivar pinches

Colgate-Palmolive Co reported a 16% drop in quarterly profit, hurt by a one-time charge related to the fall in value of the Venezuelan Bolivar. The devaluation of the Venezuelan currency has hurt many companies including Ford Motor Co, Procter & Gamble Co and Mondelez International Inc, the maker of Cadbury and Oreo, as it reduces the value of sales in the Latin American country. Colgate, which controls nearly 45% of the global toothpaste market, booked an after-tax charge of U$D 174 million due to changes in Venezuela's foreign exchange, lower than its February estimate of U$D 180-200 million. (Reuters, http://www.reuters.com/article/2014/04/25/us-colgatepalmolive-results-idUSBREA3O0ZF20140425; http://www.reuters.com/article/2014/04/25/ford-motor-results-idUSL2N0NH0E520140425)

Politics

Parolin wants to come to Caracas for peace talks

Vatican Secretary of State, Pietro Parolin, is determined to visit Venezuela in order to propel peace talks between the government and the opposition. All that remains to be set is the date and time. Venezuela's Minister of Foreign Affairs Elías Jaua says Parolin is ready to come to "enhance the Vatican's involvement" in the talks. The announcement was ratified by Venezuelan Ambassador to the Vatican, Germán Mundaraín, who told Zenit news agency that Parolin will certainly come on a yet unspecified date. (El Universal, http://www.eluniversal.com/nacional-y-politica/140428/parolin-wants-to-come-to-caracas-for-peace-talks)

Students and labor unions will take to the streets again on May 1st, says Juan Requesens, President of the Central University's Student Federation. They will demonstrate to protest worsened conditions for workers and the violation of collective bargaining agreements by the government agencies. More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/140429/gremios-y-universitarios-toman-la-calle-el-1-de-mayo)

Venezuela, Argentina sign military accords

The defense ministers of Argentina and Venezuela have met to sign accords on bilateral military cooperation.
The agreements also foresee the transfer of technology to enable the joint development of an ammonia nitrate plant, Argentina’s Agustin Rossi told journalists after the signing. Ammonia nitrate is used to make fertilizer and as an additive in some explosives. The two nations plan to expand collaboration in technology, science and education, Venezuela’s defense minister, says Adm. Carmen Melendez (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2044944&CategoryId=10717)

Obama expresses concern over Venezuela

A Venezuelan resident in Miami has received a handwritten letter from US President Barack Obama, expressing his concern over the situation facing Venezuela since the breakout of anti-government protests in February 12, a TV channel reported. (El Universal, http://www.eluniversal.com/nacional-y-politica/140428/obama-expresses-concern-about-venezuela)

The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.