Venezuelan Daily Brief

Published in association with The DVA Group and The Selinger Group, the Venezuelan Daily Brief provides bi-weekly summaries of key news items affecting bulk commodities and the general business environment in Venezuela.

Showing posts with label FEDEAGRO. Show all posts
Showing posts with label FEDEAGRO. Show all posts

Thursday, May 11, 2017

May 11, 2017


International Trade

781 containers have arrived at La Guaira port from Cartagena, Colombia, bearing 4,000 tons of food; 336.76 tons of personal care products; 685.7 tons of medication and 21,000 tons of other products. According to the Port Authority, arriving products include wheat flour, frozen fish, cooking oil, rice, cereal, lentils, sugar, apples, pears, toilet paper, sanitary napkins, shampoo, brushes, feeding bottles, soap, moist towels, hemodialysis kits, intravenous solution, and supplies for medicine production. Also, metallic structures, construction material, clothing, spare parts for vehicles, appliances and cattle equipment. More in Spanish: (El Universal; http://www.eluniversal.com/noticias/economia/ingresan-por-puerto-guaira-781-contenedores-mercancia_652022; Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=36308;
El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/arribaron-a-la-guaira-781-contenedores-con-diverso.aspx)

 

Fertilizer and herbicides are offloading at Puerto Cabello
150,000 sacks of fertilizers from Barranquilla, Colombia, aboard the ship “Manuel Gual”, consigned to state agency AGROPATRIA. At the same time, the ship “Lion” was offloading 7 containers of Pendimetaline, a chemical herbicide used to control undergrowth. More in Spanish: (Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=36304; El Universal, http://www.eluniversal.com/noticias/economia/descargan-fertilizantes-herbicidas-puerto-cabello_651808)

 

Oil & Energy

Venezuela's main refineries operating at record lows
Three of Venezuela's four refineries are working at record lows due to equipment malfunctioning and lack of crude and spare parts, according to PDVSA internal reports seen by Reuters on Wednesday and workers from the facilities. The Paraguana Refining Center, which includes Venezuela's Cardon and Amuay refineries, was processing 409,000 barrels per day (bpd) as of Monday, or 43% of its installed capacity of 955,000 bpd, according to the data. Venezuela's third largest refinery, the 187,000-barrel-per-day Puerto la Cruz, is operating at minimum levels due to problems at two of its three distillation units, said union leader Jose Bodas and a worker who asked not to be identified. The current processing levels at the main refineries are similar to 2012, when a severe explosion that killed more than 40 people at Amuay significantly reduced operations at PDVSA's main facilities, forcing the company to import fuels. (Reuters, http://www.reuters.com/article/us-refinery-operations-pdvsa-idUSKBN18630Z)

 

Venezuelan crude sales to the U.S. bounced in April
Venezuelan crude sales to the United States recovered in April compared to previous months to reach 741,000 barrels per day (bpd), its highest level since November, due to a larger supply of diluted and upgraded oil, according to Thomson Reuters trade flows data. Oil upgrades capable of converting Orinoco Belt's extra heavy crude into exportable grades have increased processing in recent weeks after working partially earlier this year, allowing more exports, sources close to the projects said. Sales of Zuata 30, Venezuela's lightest upgraded crude, to the United States almost doubled to 178,000 bpd in April compared with the previous month, according to the data. Exports of diluted crude oil (DCO) made with extra heavy oil and heavy naphtha increased 17% compared to March. (Reuters, http://www.reuters.com/article/us-venezuela-usa-oil-idUSKBN1862Q0)

 

UN reports sharp drop in Cuban exports of refined oil products
Cuban exports of refined oil products fell about 97% between 2013 and 2016, according to a United Nations trade report released this week, reflecting falling supplies from its political ally Venezuela. The UN COMTRADE annual report put the value of Cuban fuel exports last year at US$ 15.4 million, compared to more than US$ 500 million in 2013. The amounts for 2015 and 2014, when oil prices collapsed, were US$ 163.5 million and US$ 336.8, respectively. The figures were based on import data from reporting countries, which may make them incomplete. Cuba depends on socialist-ruled Venezuela for up to 70% of its energy needs, including re-exports. Havana gets the oil as part of an exchange that sends thousands of Cuban doctors and other professionals to Venezuela. But a severe economic crisis here nation has led to a decline in oil-related supplies since 2014. Cuba began rationing electricity and fuel to state companies a year ago, and has experienced gasoline shortages more recently. Diplomats, suppliers and joint venture partners report the government has fallen behind on some payments. In 2016, Cuba received 87,550 barrels per day (bpd) of Venezuelan oil and fuels, 27% less than in 2015. In 2017, shipments of fuels have declined further, according to internal data, seen by Reuters, from Venezuelan state-run oil firm PDVSA. Cuba, in turn, has looked to Russia and others to try to make up the shortfall. A tanker with 249,000 barrels of refined fuel products from Russia is due to arrive in Cuba on May 10, bringing back memories of when the Soviet Union supplied all the island nation's energy needs. (Reuters: http://www.reuters.com/article/cuba-energy-trade-idUSL1N1IB09A)

 

Commodities

Amid chaos in Venezuela, infant deaths, malaria cases skyrocket
Infant and maternal deaths and cases of malaria are skyrocketing in Venezuela, which is grappling with severe medical shortages. Confirmed malaria cases in 2016 stood at 240,000, a 76% increase over 2015. Maternal deaths rose 66% to 756. Last year, 11,466 infants died, a 30% increase, according to new records recently released by Venezuela's health ministry. It's the first health data released by the government in nearly two years. The staggering increases illustrate how badly Venezuela lacks basic medicine, equipment and supplies to treat even the simplest of injuries at public hospitals. "If you need to have an operation, nowadays, you must bring your own medicines to the hospital," says Eugenia Morin, a 59-year old the housewife who protested the government last week. "There are no supplies to attend the most basic emergencies." According to statistics released by the Venezuelan Pharmaceutical Federation, by June 2016, the country was already facing a shortage of more than 80% of the medicines doctors need. And it's not just medicine. Patients are responsible for any material needed to treat them: needles, gauze pads, saline solution. When patients can get the money together to purchase these items, they become targets -- hospital rooms are not safe from thieves looking to sell medication on the black market, or fellow patients in desperation. And more than 13,000 doctors -- about 20% of the country's medical workforce, have left the country in recent years due to the collapse of the health sector. The health figures only represent one of many crises in Venezuela, which was once the richest nation in Latin America and is still home to the world's largest oil reserves. (CNN: http://edition.cnn.com/2017/05/10/health/venezuela-malaria-infant-mortality/)

 

Fruit and vegetable transport is paralyzed by protests
200 cities could be hit by shortages of vegetables and fruit in the Andean region due to a halt in transportation because of protests and insecurity. Transport operators at Seboruco, El Cobre and La Grita, who supply fruit and vegetable to 60% of the nation have stopped their trucks due to attacks in protests and road insecurity. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/economia/200-ciudades-podrian-quedar-afectadas-por-desabastecimiento-de-hortalizas-y-frutas; El Universal, http://www.eluniversal.com/noticias/economia/productores-hortalizas-solicitan-mayor-seguridad-vialidad_651899)

 

Disturbances are hurting beef distribution nationwide
Armando Chacin, president of the Maracaibo Lake Area Cattle Federation, says beef distribution nationwide has hurt beef distribution because transportation operators do not want to put their personnel, cargo and units at risk due to protests. He says cattle processing at slaughterhouses remains “totally normal”. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/gremios/disturbios-inciden-en-la-distribucion-de-carne-a-n.aspx#ixzz4glVPEksN)

 

Vegetable production could drop 95%, farmers have not received fertilizers for 6 months
Gerson Pabón, director general of the Agriculture Federation (FEDEAGRO) warns that vegetable production could drop 95% this year because the government has limited fertilizer supplies to cereal production in Barinas, Cojedes and Portuguesa, and abandoned all the other areas. More in Spanish: (Ultima Hora Digital, http://ultimahoradigital.com/2017/05/desde-hace-6-meses-no-despachan-fertilizantes-a-productores-de-hortalizas/)

 

Economy & Finance

International reserves drop down to lowest level in 15 years
FOREX held by Venezuela’s Central Bank to fund imports, repay depts., meet contingencies and back up exchange rates were US$ 10.137 billion as of May 5th, a 19% drop over the past year and their lowest level in 15 years, according to official data. The amount offers much less coverage than in 2002 because the nation’s FOREX debt is much higher, it depends much more on imports and currency controls allocated FOREX very inefficiently. Disposable FOREX reserves are now only 10% of the total amount, and were 68% of it in 2002. Two thirds of current reserves are in gold bullion, so there is scant liquidity and a very narrow margin for maneuvering. Analysts estimate the FOREX deficit at US$ 10 billion, which means companies cannot import supplies required for production of food and medicine. The Central Bank itself reports that the National Stabilization Fund is down to US$ 3 million, a meaningless sum as compared to savings in other oil producing nations. Central Bank statistics showed that dollar debt quadrupled between Q3 2004 and Q3 2015, from US$ 27.053 billion up to US$ 120.204 billion. Indebtedness did not improve infrastructure or diversify the economy, and weighs heavily on public finance. Venezuela and PDVSA still must pay up US$ 9.691 billion this year. The next large payment comes due in October-November, for US$ 3.526 billion. Analysts say that the only way the Maduro regime can increase imports, relieve scarcity and pull out of recession is through financing, but investors are looking at a high risk due to scant reserves, low oil prices, political conflict and weak institutions – where the Supreme Tribunal has declared the National Assembly in contempt, and the legislature – in turn – has made it clear to foreign financial institutions that any credit operations that do not have its approval will be considered illegal. More in Spanish: (Notiminuto: http://www.notiminuto.com/noticia/las-reservas-internacionales-caen-al-nivel-mas-bajo-en-15-anos/)

 

Venezuela's 99.5% Currency Plunge Shows Why Protests Rage: Chart
President Nicolas Maduro has overseen an unprecedented depreciation in his country’s currency since taking office, with the bolivar now down 99.5% to 5,100 per dollar in the black market that everyday Venezuelans use. The sharp decline has wiped out savings and made buying imported goods all but impossible, helping fuel the anger directed at the government in street protests that have turned deadly in recent weeks. While Maduro has raised the minimum wage almost 20 times during his tenure, it’s still the equivalent of just US$ 40 a month. (Bloomberg, https://www.bloomberg.com/news/articles/2017-05-10/venezuela-s-99-5-currency-plunge-shows-why-protests-rage-chart)

 

"Economic recovery in Venezuela is not viable without a political solution"
The Venezuelan Federation of Chambers of Commerce and Industry (FEDECÁMARAS) decided on Tuesday not to attend the meetings called by the Presidential Commission for the Constituent Assembly arguing that this body will be unable to solve the country core problems. “It is not time for a constituent assembly,” said Fedecámaras President Francisco Martínez, accompanied by the members of the expanded board of directors. “The country calls for solutions to the problems that afflict the people and go deeper and deeper day by day (…) The call to a national constituent assembly in the set terms, rather than solving, will deepen the crisis, as it lacks the legitimacy afforded by the support of the sovereign people.” Aquiles Hopkins, incoming President of the nation’s Agriculture Confederation (FEDEAGRO) concurs, saying: “A constituent assembly is not the solution to the nation’s problems which are clearly specified, and will only be solved within the Constitution”. (El Universal, http://www.eluniversal.com/noticias/daily-news/economic-recovery-venezuela-unviable-without-political-solution_651974; and more in Spanish: El Mundo, http://www.elmundo.com.ve/noticias/actualidad/politica/fedeagro-dice-que-la-constituyente-no-solucionara-.aspx#ixzz4glUvAV4s)

 

Politics and International Affairs

Venezuela protesters fling feces at soldiers; unrest takes 2 more lives
Young Venezuelan protesters lobbed bottles and bags of feces at soldiers who fought with tear gas on Wednesday to block the latest march in more than a month of nationwide protests against socialist President Nicolas Maduro. The extraordinary scenes, in what was dubbed the "Shit March" on the main highway through Caracas, came as thousands of opposition supporters again poured onto the streets decrying Venezuela's economic crisis and demanding elections. Many carried stones and so-called "Poopootov cocktails" - feces stuffed into small glass bottles - that they threw when National Guard troops blocked their path, firing gas and turning water cannons on the crowds. Protesters marching in downtown Caracas chanted: "Who are we? Venezuela! What do we want? Freedom!". At that point, militiamen approached, all dressed in dark colors with pieces of cloth covering their faces. One masked militia member fired several shots into the air. The militia later dispersed after officers intervened. Opposition leaders have blamed armed pro-government groups known as "collectives" for a number of protest deaths. At least 93 people were injured in Caracas and demonstrator Miguel Castillo was killed. Authorities also announced that Anderson Dugarte, 32, died from a gunshot wound he suffered Monday at a protest in Merida. The violence pushed the death toll to at least 38 in more than a month of street protests and political turmoil. Castillo had studied communications at Santa Marta University and friends and opposition leaders vowed to march to the site of his death Thursday morning. Interior Minister Nestor Reverol said in comments broadcast by state television that Dugarte was killed by a sniper linked to the opposition's Democratic Unity coalition. The opposition are seeking to vary tactics to keep momentum going and supporters energized. The government accused the opposition of breaking international treaties on biological and chemical weapons by throwing feces. In downtown Caracas, government supporters also rallied, dancing salsa and waving pictures of Maduro's predecessor Hugo Chavez who remains venerated by many, especially the poor.  Maduro and his allies appear to be hoping the opposition will run out of steam and are banking on a rise in oil prices to help assuage four years of recession. They are seizing on vandalism by young opposition hotheads who burn rubbish in the streets and smash public property, to depict the whole movement as intent on violence. The protests so far have failed to garner massive support from poorer, traditionally pro-Chavez sectors of Venezuela's 30 million people. But a bigger cross-section of society has been apparent at recent marches, some of which drew hundreds of thousands. Looting has been breaking out in some cities, especially at night. (Reuters: http://www.reuters.com/article/us-venezuela-politics-idUSKBN1862V3; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2436164&CategoryId=10718; Al Jazeera:
http://www.aljazeera.com/news/2017/05/venezuela-protests-170510215958054.html; CNN: http://edition.cnn.com/2017/05/10/world/venezuela-victims/; CBS News: http://www.cbsnews.com/news/venezuela-protests-nicolas-maduro-dead-poopootov-cocktail-feces/; ABC News: http://abcnews.go.com/International/wireStory/dozens-hurt-dead-violent-day-protests-venezuela-47334107; DW: http://www.dw.com/en/pro-maduro-militia-suppress-venezuela-democracy-demos/a-38793644)

 

Opposition leader arrested at pre-march gathering
National Assembly lawmakers on Wednesday denounced that Venezuela’s Bolivarian National Police (PNB) arrested a leader in the Popular Will (VP) party, Sergio Contreras, who was with a group of opposition members in downtown Caracas preparing to stage a march to the Supreme Court building. Opposition lawmaker Gaby Arellano told reporters that Contreras, an assistant to parliamentary First Vice President Freddy Guevara, was arrested in the La Candelaria sector of town. The police took him away “for no reason,” she said. “We were gathering (for the march) and comrade Sergio Contreras ... with a megaphone in his hand, was viciously attacked with tear gas canisters and subdued by more than 15 PNB officers commanded by Officer Duque, upon whom I threw myself to get (Contreras) away from them, and they beat me also,” she said. Arellano said that Contreras was beaten in a “barbaric manner,” and that lawmakers Luis Florido, Jorge Millan and Winston Flores, as well as Arellano herself, were also attacked by the police. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2436154&CategoryId=10717)

 

Venezuela hauls protesters before military tribunals to face up to 30 years behind bars
Human rights activists say more than 250 detained protesters have been put before military justice over the last week — a sudden upsurge in use of a practice they say violates the constitution, which limits military courts to "offences of a military nature." Some lawyers and opposition leaders put the number far higher. "The growing use of military tribunals to judge civilians demonstrates the absolute determination of Venezuelan authorities to asphyxiate the growing protests and terrorize any person who contemplates the possibility of expressing opinions," said Erika Guevara Rosas, Americas director for Amnesty International. President Nicolas Maduro's administration says the courts are part of emergency measures necessary to ensure national security against what they decry as foreign-backed attempts to violently oust the socialist government from power. "Security agencies are deployed in Carabobo to find those responsible for instigating rebellion and crime," wrote General Antonio Jose Benavides Torres, commander of Venezuela's Bolivarian National Guard, on Twitter. Many rights activists see the increasing reliance on military tribunals to try civilian protesters as an echo of the dark days of the 1970s and 1980s, when military dictatorships in Chile, Brazil and elsewhere bypassed civilian jurisdictions to prosecute political opponents accused of being national security threats tied to international communism. "The governments of Latin America have experienced this in the past, we have fought against impunity and we have said, 'Never again,"' said Luis Almagro, secretary general of the Organization of American States. "We cannot remain silent in the face of such obvious abuse of the basic human rights of Venezuelans." Some opposition leaders believe the use of the military tribunals reflects Maduro's weakening grip on power and a desire to circumvent someone who's become a surprising irritant: Venezuela's semi-autonomous chief prosecutor Luisa Ortega, who has shown signs of unusual independence. She was the first official to denounce a March ruling by the loyalist Supreme Court that stripped the opposition congress of its last powers, calling it a "rupture" of the constitutional order, helping prompt the court to back off the ruling. Nearly all of those facing military courts face the same two charges, according to attorneys: Inciting rebelling and vilifying military officials. Most of those cases so far are in the northern state of Carabobo. Military officials have activated an emergency protocol there known as Plan Zamora, few details of which have been made public. Amnesty International said Wednesday more than 250 people have been detained and placed in the hands of military justice. Alfredo Romero, executive director of Foro Penal, a lawyers' co-operative that defends activists, told National Assembly members Tuesday that 118 people in Carabobo alone have been put before military tribunals, where he said nearly a dozen soldiers armed with automatic weapons are posted in the courtroom as cases are heard. (CBC News: http://www.cbc.ca/news/world/venezuela-protesters-military-tribunals-1.4108988; El Universal, http://www.eluniversal.com/noticias/daily-news/ngo-over-civilians-have-been-sued-military-courts_651968)

 

Venezuela’s anti-government protesters show no signs of backing down
The crisis in Venezuela is only getting worse. On Wednesday, just as on every previous day for the past six weeks, anti-government protests hit various parts of the country. We're almost getting inured to the images: smoldering barricades arrayed against riot police, security forces launching fusillades of tear gas, bloodied demonstrators being rushed out by volunteer medics. Embattled Venezuelan President Nicolás Maduro is grimly clinging to power. His opponents seek fresh elections, the release of political prisoners and other concessions. Maduro, the unpopular inheritor of a socialist revolution, shows no sign that he will heed those calls. “Maduro is trapped in an electoral maze of the regime’s own making,” Phil Gunson of the International Crisis Group wrote last month. “After years of using elections as plebiscites, confident that oil revenue and the charisma of the late strongman Hugo Chávez would always ensure victory, the government can now — with Chávez gone — neither muster the electoral support nor find a convincing reason not to hold a vote.” And so, the protests continue. As Maduro extends the crackdown and even hauls civilians before military tribunals, there's a growing sense that external pressure is needed to ease the crisis. All eyes are on a meeting of the Organization of American States, or OAS, expected this month, where Venezuela will be at the forefront of the agenda. Maduro has threatened to pull out of the regional alliance, which is headquartered in Washington. “Venezuela is drowning in an economic, financial, social and humanitarian crisis of gigantic proportions,” said Luis Almagro, the secretary-general of the OAS, in a recent interview with Bloomberg News. “There is a dictatorship in Venezuela, and Venezuela needs elections. The only institutional exit for the country is a general election.” Maduro has seen the erosion of his government's base, with many of Venezuela's poor — once uplifted by “chavista” populism — suffering amid the wreckage of a collapsing state. But he may now fear fractures within the ruling party and the waning support of the security services that guarantee his power.  In the meantime, protesters will keep turning out in the streets of the country's divided cities. (The Washington Post: https://www.washingtonpost.com/news/worldviews/wp/2017/05/11/venezuelas-anti-government-protesters-show-no-signs-of-backing-down/?utm_term=.1f4cbbe23a9a)

 

IACHR lashes at repression; deplores rising death toll in Venezuela
The Inter-American Commission on Human Rights (IACHR) blasted the “repressive measures” adopted in Venezuela, in retaliation to the wave of nationwide protests started last April. The IACHR urged the Venezuelan government to stop such measures and effectively discharge its international obligations in the field of human rights, a notice stated. The IACHR specially condemned and voiced concern over the increasing number of killings, injured people and detentions en masse, in addition to militarization of the way of dealing with the demonstrations. (El Universal, http://www.eluniversal.com/noticias/daily-news/iachr-lashes-repression-deplores-rising-death-toll-venezuela_651980)

 

Maduro regime allies delay OAS vote on Venezuela
The Organization of American States (OAS) has postponed a vote on calling a meeting of the Hemisphere’s Foreign Minister to deal with the Venezuelan crisis until May 15th. A large group of countries wanted to vote on the matter yesterday, but after a heated debate had to agree to postpone the vote due to opposition by some Maduro regime allies within the organization. Venezuela did not attend. The Permanent Council will meet next Monday, to vote on a new date, as per a proposal by Ecuador’s representative. Canada, which had called for the meeting, stressed that what is going on in Venezuela is “not normal”, and the situation is not improving by delays. OAS Secretary General Luis Almagro held the Maduro regime responsible for the death of young Miguel Castillo in Caracas the same day, and condemned “arbitrary and indiscriminate arrests by the Venezuelan regime.” He added “there are 38 dead to date due to the brutal repression of the Venezuelan regime against their people” More in Spanish: (Notiminuto: http://www.notiminuto.com/noticia/en-vivo-sesion-de-la-oea-sobre-venezuela/; El Universal, http://www.eluniversal.com/noticias/politica/oea-sin-consenso-sobre-dia-reunion-cancilleres-para-caso-venezuela_652016; El Universal, http://www.eluniversal.com/noticias/politica/almagro-imperativo-restaurar-democracia-venezuela_652088)

 

US State Department calls on Venezuela to "tend humanitarian needs," respect Constitution & National Assembly
Francisco Palmieri, Acting Assistant Secretary for Western Hemisphere Affairs, at the U.S. Department of State, says: “The people of Venezuela are suffering due to their government’s authoritarian repression and poor economic management Three-quarters of Venezuelans have lost weight in the past year because of food scarcity.
We are concerned that the government of President Maduro is violating Venezuela’s own constitution and is not allowing the opposition to have their voices heard, nor allowing them to organize in a way that expresses the views of the Venezuelan people. Our hemisphere has come together, particularly through the Organization of American States in defense of democracy and human rights in the region. We have taken formal steps to address the situation in Venezuela by calling a minister-level meeting
.” (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2436097&CategoryId=10717)


 

The armed forces will decide the fate of Venezuela’s regime
Before Nicolás Maduro, Venezuela’s president, delivered his second May Day address, spelling out plans for a new constitution, he paused to acknowledge a dozen generals, in full ceremonial uniform, were in the audience. He asked them to stand and be applauded. It was a telling moment. His future will be decided by the armed forces, not directly by the people. If they withdraw support from his beleaguered regime, change will come soon. If not, hunger and repression will continue. So far, there is little sign of dissent in the top ranks. General Vladimir Padrino López, the head of the armed forces and minister of defense, hailed Maduro’s call for a new constitution as “a clear demonstration of democratic will”. The opposition is increasingly directing its appeals to the armed forces, or to factions within them. Julio Borges, the legislature’s president, says it is time for the men in green to “break their silence”. Henrique Capriles, a potential challenger to Maduro who has been banned from seeking office for 15 years, asked ordinary soldiers to consider whether they want to “share the fate” of the doomed ruling party. The army is not the regime’s only prop. The National Guard fires tear-gas at and wield truncheons against demonstrators; informal gangs called “collectives” enforce submission to the regime in neighborhoods and are responsible for many of the 33 deaths in protests over the past month. But the armed forces, though constitutionally required to be apolitical, are the final arbiters of power. Chavismo, the movement that guides the regime, has been military-led since its inception. Officers or former officers run 11 of the 32 ministries; 11 of the 23 state governors are retired officers. Maduro has been a prolific producer of generals. On one day, last year he promoted 195 officers to that rank, bringing their number to more than 2,000. The United States somehow gets by with no more than 900 generals. The Venezuelan top brass is not a monolithic group. There are “diverse” factions, both between and within branches of the armed forces, says Rocio San Miguel, a lawyer and defense specialist. A group of “originals” fought alongside Chávez in 1992. An overlapping clique helps drug-trafficking gangs through its control of ports and airports. A bigger group of non-ideological “opportunists” dabbles in that and other businesses. These divisions matter less than the generals’ shared interest in the regime’s survival. Most profit handsomely from Maduro’s chaotic rule. Some have access to dollars at the ridiculously cheap price in bolivars set by the government. The army oversees the lucrative business of food distribution, a recipe for abuse. The lower ranks are less happy, though they are better housed than most Venezuelans and some profit from sidelines such as smuggling.  DCI, an agency that snoops on the barracks, reportedly has been hearing of “deepening disaffection”, especially in the army’s middle ranks, since February, before the latest protests began. Much of this appears linked “with mid-ranking officers barely bothering to suppress their contempt for a general staff it perceives as corrupt”. In April three lieutenants posted a video saying they rejected Maduro as commander-in-chief. They sought asylum in Colombia. General Raúl Baduel, a jailed former defense minister, has become an icon for dissenters. They share a 14-second recording in which he says he is in prison because he spurned “the scoundrels and criminals …who give you orders”. Junior soldiers, and their families, share the privations that drive Venezuelans onto the streets in protest. They are angry. But that does not mean that they will stop following orders. (The Economist: http://www.economist.com/news/americas/21721661-people-power-counts-less-armed-forces-will-decide-fate-venezuelas-regime)

 

Former Venezuelan general: Venezuela is on the verge of civil war
Retired Gen. Miguel Rodríguez Torres, 53, who served as Maduro’s interior minister in 2013 and 2014, said that large riots and protests have cropped up in every major city, including the working-class neighborhoods that once firmly supported Maduro’s government. When serving as Maduro’s interior minister, Torres’s government forces quashed anti-government protests in 2014, resulting in 43 dead including protesters and police officers. The protests died out without any concessions from the government, demoralizing Maduro’s opposition for years. Torres said things have gotten much worse since his time as interior minister, leading more protesters to take to the streets. He said that without the government getting to the economic roots of the crisis, repression will not work. Torres said Maduro fired him in 2014 after he had criticized the president’s handling of the economy, particularly his control over the currency. Today, Torres is considering running for president of Venezuela as an independent.  He also founded the Wide Movement political group which focuses on ridding itself of chavismo, the political movement of Hugo Chavez, Maduro’s socialist predecessor. “We can’t be thinking about saving chavismo now, we have to save the country,” Torres said. (The Blaze: https://www.theblaze.com/news/2017/05/10/former-venezuelan-general-venezuela-is-on-the-verge-of-civil-war/)

 

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.

Tuesday, July 28, 2015

July 28, 2015


International Trade

 

Cargo that has arrived at Puerto Cabello:

  • 60,000 tons of white corn from Mexico for state agency CASA
  • 30,000 tons of raw sugar from Brazil for CASA.
  • Over 16,852 tons of soy oil from Aceitera General Deheza and Cargill Saci for ALIBAL and CARGILL Venezuela.
  • 12,000 tons of soy oil from Argentina for Consorcio Oleaginoso Portuguesa (COPOSA).  


 

Government imports 27,600 tons of coffee to meet scarcity

Víctor Pérez, who heads the coffee section of the national agricultural association FEDEAGRO, reports the government has imported some 27,600 tons of coffee from Nicaragua and Brazil in order to meet scarcities. He says this volume could cover 5 months of consumer demand under norma conditions. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/industrias/importan-600-mil-quintales-de-cafe-para-paliar-las.aspx#ixzz3hBELZzoB; El Nacional; http://www.el-nacional.com/)

 

 

Logistics & Transport

 

AVIOR Airlines launching flights Valencia to Bogota and Medellin in Colombia tomorrow. Its marketing vice president Gibson Preziuso said there will be five weekly flights to each destination. Tickets will be Bs.60,000-80,000. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44799&idc=3)

 

Domestic flights are down 30% in the past 16 months, according to José Antonio Yapur, head of the Tourism Council. He says the number of flights are down to key vacation destinations such as Margarita, Carúpano, Canaima, Coro, Los Roques and Mérida. (El Nacional; http://www.el-nacional.com/)

 

 

Oil & Energy

 

Venezuela seeks light crude contracts to make blends -sources

Petroleos de Venezuela (PDVSA) has asked oil suppliers to submit offers to sell the nation up to 70,000 barrels per day of ultralight sweet crudes through contracts of one to five years. If successful, the move would mark the most definitive step state-owned PDVSA has taken to obtain longer-term supplies of ultralight crude, which it needs to use as a diluent for its growing output of extra heavy oil. PDVSA bought some 4 million barrels of Algeria's Saharan Blend light crude from October 2014 through January of this year under an agreement with state-run Sonatrach. That deal ended after disagreements over prices and delivery terms, forcing PDVSA to resume production of less attractive blends made with imported naphtha. (Reuters, http://www.reuters.com/article/2015/07/27/oil-venezuela-imports-idUSL1N1041K620150727)

 

Venezuelan oil continues to "weaken"

Venezuela's Ministry of Petroleum and Mining reports that the price of Venezuelan oil continues to "weaken" in the international market. The Ministry points out that during the week of July 13-17 Venezuelan oil averaged US$ 49.89 per barrel, while in the week of July 20-24 it ended at US$ 47.89, losing US$ 2 per barrel. "The price of oil continued to weaken during the week amid concerns grounded on oversupply of crude oil on the main markets," the Ministry noted. (El Universal, http://www.eluniversal.com/economia/150727/venezuelan-oil-continues-to-weaken)

 

Guyana considers alternatives as Venezuela oil program wobbles

Guyana is considering energy alternatives to the PETROCARIBE program as Venezuela fails to meet export quotas and tensions flare between the neighboring countries. “We are actively considering other options,” says Guyanese Finance Minister Winston Jordan. The small South American nation receives about half its fuel supply from the PETROCARIBE program, but fears the agreement could be affected by a diplomatic spat with Venezuela over a longstanding border dispute, Jordan said. Guyana currently receives about 5200 barrels of fuel a day under the PETROCARIBE program, though Venezuela has been unable to meet some delivery quotas, he said. (Bloomberg, http://www.bloomberg.com/news/articles/2015-07-24/guyana-considers-alternatives-as-venezuela-oil-program-wobbles)

 

Spain’s REPSOL said to weigh sale of assets including Venezuela

REPSOL is considering selling assets in countries including Venezuela as the Spanish oil company seeks to reduce debt after its US$ 13 billion purchase of Talisman Energy Inc. last year, people familiar with the matter said. As part of its plan to reduce peripheral assets, Madrid-based REPSOL may also look at divestments in Alaska, Bolivia and the Gulf of Mexico. No final decision has been made and the company is still deciding which units to sell, or whether to keep the assets, they said. (Bloomberg, http://www.bloomberg.com/news/articles/2015-07-23/spain-s-repsol-said-to-weigh-sale-of-assets-including-venezuela)

 

PETROVIETNAM ponders investments in Orinoco Oil Belt

A delegation from Vietnamese state-run oil company PetroVietnam visited areas of the Ayacucho Division of the Orinoco Oil Belt in Anzoátegui state, northeast Venezuela. The delegation was headed by the Vice-President of PETROVIETNAM, Cao Huu Binh. Part of the board of the Ayacucho Block received the delegation during the visit to the Basic Unit of Production Construction (UBCP) and the PDV-71 drill. (El Universal, http://www.eluniversal.com/economia/150727/petrovietnam-ponders-investments-in-orinoco-oil-belt)

 

 

Economy & Finance

 

Venezuelan currency enters free fall mode

Having tumbled beyond the 500 per dollar mark in the black market at the start of the month, and then the 600 mark just eight days later, the bolivar is now within sight of crashing through the 700 barrier. The so-called bolívar "fuerte" - or strong bolivar - hit a new low of 683.26 per dollar on the black market last week, according to a rate tracking website. This means the bolivar's value on the black market is now less than a hundredth of the main government rate of 6.3 bolivares to the dollar - and underscores the growing inability of Nicolas Maduro, Venezuela's president, to stabilize the country's fast deteriorating economy. The currency has lost 43% of its value over the past month, as a fresh dive in global oil prices squeezes government finances and drains foreign reserves. It is worth a thousandth of what it was in 1999, when Hugo Chávez came to power. Meanwhile, price increases are seen by economists to be approaching hyperinflation territory as the government cranks up the printing press to pay its expenses. Most economists reckon that the inflation rate is already 120% a year (the central bank stopped publishing price data, so no one is sure). Some expect it to reach 200% by the end of 2015. The bolivar's implosion has been wreaking havoc on big multinationals that are still doing business in the country. American Airlines and Coca-Cola FEMSA, the Mexican bottler, became the latest to sound the alarm last week. The US airline, which has already been cutting its service to Venezuela, warned that there's a risk of further losses on the US$ 629 million in cash it has in bolivars. FEMSA meanwhile said a move to reduce the value of its revenue from Venezuela by 95% has wiped out its sales and profit gains for the year to date. (Financial Times, http://www.ft.com/fastft/366271/venezuela-bolivar; The Economist, http://www.economist.com/blogs/freeexchange/2015/07/chinas-wild-stockmarket?fsrc=permar|image1)

 

Harvard Professor now says Venezuela won’t escape default in ’16

Harvard University Professor Ricardo Hausmann last year questioned Venezuela’s decision to keep paying bondholders as the country sank deeper into crisis and suggested it stop honoring the debt. Now, he’s saying Venezuela will have no choice but to default next year. Hausmann’s comments come as a deepening collapse in oil prices and a shortage of dollars stoke concern Venezuela is fast running out of money to stay current on debt. The country’s bonds plunged last year after Hausmann, who served as Venezuelan planning minister in 1992 coup, raised the specter of default, saying he found “no moral grounds” for the government to pay debt at a time when Venezuelans were facing shortages of everything from basic medicine to toilet paper. (Bloomberg, http://www.bloomberg.com/news/articles/2015-07-27/harvard-professor-now-says-venezuela-won-t-escape-default-in-16)

 

Venezuela bonds worth holding to Morgan Stanley as reserves fall

Venezuela is blowing through its reserves at a pace of about US$1.6 billion a month, Morgan Stanley estimates. Even so, the country can probably hold out long enough that investors can still profit from holding the government’s bonds. President Nicolas Maduro needs to start selling assets urgently, writes strategist Robert Tancsa. He thinks the country is unlikely to default this year after local buyers bought up large chunks of the Petroleos de Venezuela bonds coming due in the fourth quarter. Morgan Stanley recommends holding the country’s bonds, especially Petroleos de Venezuela SA’s bonds due in 2022, which yield 34%. Prices are so low that the odds of a default are arguably priced in, Tancsa wrote. The oil company is a better credit than the sovereign, he wrote. (Bloomberg, http://www.bloomberg.com/news/articles/2015-07-24/venezuela-bonds-worth-holding-to-morgan-stanley-as-reserves-fall)

 

Venezuela’s fiscal deficit will be $20.2 billion by the end of 2015 if there are no more cuts in imports and other adjustments are not made, according to estimates from Bank of America Merrill Lynch. The financial institution explained that even if Venezuela can sustain this for two years, this economic course is “clearly unsustainable.” In a year, imports have been cut by 24.1%. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44803&idc=2)

 

Pro-government legislators propose dual FOREX rate

Rodrigo Cabezas, Vice-President for Foreign Relations of the ruling United Socialist Party of Venezuela (PSUV), is the first government ally to suggest the idea of a foreign exchange simplification and a dual foreign exchange rate. Other pro-government legislators have supported the initiative, including José Alfredo Ureña, Jesús Faría, and Alexander Dudamel. Ureña, a member of the National Assembly Finance Committee, says that a dual foreign exchange rate could be adopted in the upcoming days, as the current system in place creates market distortions. (El Universal, http://www.eluniversal.com/economia/150727/pro-government-deputies-propose-dual-forex-rate)

 

Central Bank drains liquidity by VEB 25.90 billion

As part of its monetary policy, the Central Bank of Venezuela (BCV) has been combining liquidity-absorbing operations with the issuance of an investment instrument designed to cut excess liquidity that could put counterproductive pressures on the economy. The amount involved in the operations is VEB 25.90 billion (US$ 4.07 billion at the official exchange rate of 6.30 VEB per US dollar.) (El Universal, http://www.eluniversal.com/economia/150727/venezuelas-central-bank-drains-liquidity-by-veb-2590-billion)

 

 

Politics and International Affairs

 

Capriles meets OAS Secretary General to seek OAS observers in elections, Maduro slams OAS

Henrique Capriles, two-time Venezuelan opposition presidential candidate, has met with OAS Secretary General Luis Almagro, to present a "proposal of an OAS election observation mission in the upcoming parliamentary elections and to also explain the human rights and economic situation”. Almagro reported he met with Capriles "using Venezuela's constitution and institutions as the axis". Venezuela´s electoral authority has invited experts from the Union of South American Nations, or UNASUR, to be part of a so-called “electoral accompaniment” and has not responded to requests to include observers from other organizations. But President Nicolás Maduro later said Almagro must be asked "whether he will work for Latin America and the Caribbean or for Washington". He added that "The OAS is 67 years old and useless" and said there is a "jinx" on the Secretary General's office that "turns it into a den of conspiracy" against popular movements. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2393125&CategoryId=10717; El Universal, http://www.eluniversal.com/nacional-y-politica/150727/oas-observation-requested-in-december-election; and more in Spanish: El Nacional; http://www.el-nacional.com/; Infolatam, http://www.infolatam.com/2015/07/27/maduro-ataca-a-la-oea-y-pide-a-eeuu-colombia-y-al-papa-apoyar-plan-de-alba/)

 

Regime bars foreign lawmakers’ visit to jailed opposition leader

Authorities of the jail near Caracas where Venezuelan opposition leader Leopold Lopez is being held have refused to allow a group of foreign lawmakers to visit him. “I wish to tell the Venezuelan people and above all the political leaders who are unjustly imprisoned that we will not abandon them in this struggle... we will press on,” said Spanish Sen. Ander Gil. The group, which also included Gil’s colleagues Dionisio Garcia, Iñaki Anasagasti and Josep Maldonado, along with Uruguayan Sen. Pablo Mieres, was frustrated in its attempt to see an opposition politician behind bars. The foreign legislators, accompanied by Lopez’s wife, Lilian Tintori, were in possession of a document with the seal of the Interior Ministry allowing them to visit opposition leaders. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2393068&CategoryId=10717)

 

Chavismo comes in third place in poll

A recent poll by IVAD'S VENEBARÓMETRO shows the opposition holding first place in voter preference, with 32.6%, independents taking 27.6%, and pro regime "chavistas" coming in third with 20.8% support. The remaining voters said they were undecided. Given a choice between two options, opposition support rises to 41.8%, "chavistas" to 22.1% and undecided voters show at 20.6%. The remaining 15.6% say they will not vote. (El Nacional; http://www.el-nacional.com/)

 

MUD: This is the best electoral structure we have had in 16 years

Jesús Torrealba, Secretary General of Venezuelan opposition coalition Unified Democratic Conference (MUD), says the opposition alliance has the best electoral structure in the last 16 years for the upcoming parliament vote in December "not only to protect the votes where it is clear that we are a majority" but also in rural balloting centers with few polling stations "because there is where tricks are focused, there is where, statistically speaking, we have seen balloting stations with an irregular behavior." Torrealba stressed the MUD had enough poll workers to accomplish that, and that, since work is being done five months ahead of the election, opposition electoral witnesses will be supported by the residents of rural areas. He remarked that people who voted for late president Hugo Chávez in the past would not vote for the current government. (El Universal, http://www.eluniversal.com/nacional-y-politica/150727/mud-this-is-the-best-electoral-structure-we-have-had-in-16-years)

 

Spanish government summons Venezuelan ambassador to Madrid

The Spanish Ministry of Foreign Affairs has called in Venezuela´s ambassador to Spain Mario Ricardo Isea to present a formal complaint over recent remarks by President Nicolás Maduro against Spanish Head of Government Mariano Rajoy, whom Maduro "has labeled by publicly and repeatedly as an assassin". Back in April, Madrid also summoned Ambassador Isea following President Maduro's statements accusing Rajoy of being a "racist." Spain described those remarks as "intolerable." (El Universal, http://www.eluniversal.com/nacional-y-politica/150727/spanish-govt-summons-venezuelan-ambassador-to-madrid)

 

US blacklists Venezuela for human trafficking for the second time

For the second year in a row, the United States Department of State kept Venezuela on its blacklist of trafficking in persons, by considering that Caracas has no met the minimal standards and does not engage in "significant efforts" to fight this crime. Venezuela joins Russia, Thailand, Libya, Algeria, Syria, Yemen, North Korea, and other 16 countries on the lowest ranking, "tier 3," according to the assessment conducted by the US Department of State. (El Universal, http://www.eluniversal.com/nacional-y-politica/150727/us-blacklists-venezuela-for-human-trafficking-for-the-second-time)

 

The US calls for peaceful settlement of Venezuela-Guyana dispute

The United States government says it is "imperative" that the territorial dispute between Venezuela and Guyana be settled in a "peaceful" manner and in compliance with international law. A US Department of State spokesperson, who asked not to be named, explained that any effort to solve that border dispute had to be undertaken through peaceful measures consistent with international law, either through the United Nation process or any other mechanisms. (El Universal, http://www.eluniversal.com/nacional-y-politica/150727/the-us-calls-for-peaceful-settlement-of-venezuela-guyana-dispute)

 

Maduro to meet with UN Secretary General Ban Ki Moon over Guyana dispute

President Nicolás Maduro plans to travel to New York to meet with UN Secretary General Ban Ki Moon over what his government calls Guyanese "aggressions" in the Essequibo disputed territory. More in Spanish: (AVN; http://www.avn.info.ve/contenido/presidente-maduro-sostendr%C3%A1-reuni%C3%B3n-especial-secretario-general-onu; El Universal, http://www.eluniversal.com/nacional-y-politica/150728/maduro-viaja-a-la-onu-para-exponer-litigio-con-guyana)

 

 

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.