May 06, 2014

International Trade

Incoming cargo at Puerto Cabello

• Over 7.038 tons of chicken and beef from JBS S/A for the government's Corporación de Abastecimientos y Servicios Agrícolas (CASA)
• 521 tons of frozen beef from Marfrig Alimentos S.A., Minerva S.A. y Baldony S.A. for Consorcio Comeimport, Inversiones 6308, Importaciones y Exportaciones Mounty and Makro
• Over 200 tons of prefabricated buildings from Lenard Overseas for PDVSA Industrial

More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Mas-de-7-mil-toneladas-de-carne-y-pollo-llegaron-al-puerto-2153154/2014/05/03/324652)

Venezuela and Vietnam review standing agreements

Vietnam's Foreign Affairs Vice Minister Ha Kim Ngoc is currently in Venezuela seeking to deepen strategic cooperation and review the status of major joint projects in the sectors is reviewed: energy, agriculture, aquaculture, electricity, industry and trade. More in Spanish: (AVN; http://www.avn.info.ve/contenido/venezuela-y-vietnam-revisar%C3%A1n-acuerdos-materia-energ%C3%A9tica-agr%C3%ADcola-e-industrial; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/mundo/venezuela-y-vietnam-revisan-acuerdos-en-materia-en.aspx; El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/venezuela-y-vietnam-revisaran-acuerdos-en-materia.aspx; El Nacional, http://www.el-nacional.com/mundo/Venezuela-Vietnam-revisaran-energetica-industrial_0_403159829.html)

Oil & Energy

The price of Venezuelan oil drops again

Venezuela's weekly oil basket stayed below the country's desired U$D 100 a barrel floor and fell as markets around the world seemed to be well-supplied. According to figures released by the Ministry of Energy and Petroleum, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending May 2 was U$D 96.50, down U$D 1.21 from the previous week's U$D 97.71. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2126767&CategoryId=10717)

Ramírez says low gasoline prices are "burning away the future"

Government officials have for some time been considering adjusting domestic oil consumption prices and speak of public consultation on the matter. In a recent interview, Economic Affairs Vice President Rafael Ramírez said: "These prices make no sense...with these gasoline prices we are burning away the future." More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/petroleo/pdvsa/ramirez---con-el-precio-de-la-gasolina-nos-estamos.aspx#ixzz30q2HAC1v)

Commodities

Pharmaceuticals scarcity level at 50%

Based on data supplied by the Central Bank, by the end of March, shortages of pharmaceutical products rose to 50%. The report verifies the day-to-day plight of patients. (El Universal, http://www.eluniversal.com/economia/140505/scarcity-of-pharmaceutical-products-at-50-in-venezuela)

FORD halts operations in Venezuela due to lack of parts

FORD Motor Venezuela is stopping all activity in Venezuela as scarce inventories available have now been used up. It hopes to start operating again on May 30th but there is no assurance it will by then have received the needed vehicle components. It will continue to meet payroll commitments during the shutdown. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/ford-paraliza-operaciones-en-venezuela-por-falta-d.aspx#ixzz30q0T76GL; El Mundo, http://www.elmundo.com.ve/noticias/negocios/automotriz/ford-paraliza-operaciones-por-falta-de-insumos.aspx)

Economy & Finance

CITI has released its April 2014 commentary on Venezuela (attached) with the following conclusions:

• Venezuela is in a downward spiral, economically, socially and politically, with no end in sight
• The economy is becoming more rather than less dependent on oil
• The private sector is reducing investment, as much by necessity as choice, further
• reducing the economy’s productive capacity
• The exchange rate regime can best be described as ‘dysfunctional’, with rapid
• inflation and a major shortage of foreign exchange likely to dictate further
• significant changes over the next few years
• The shortage of foreign exchange will lead foreign companies to reduce the scale
• of operations in the country and to accept large balance sheet losses

Fitch downgrades Venezuela's CITGO outlook to negative

Fitch Ratings has affirmed the Issuer Default Ratings (IDR) for CITGO Petroleum Corporation (CITGO) at 'BB-' and the company's senior secured ratings (including the revolver, term loans, and fixed-rate industrial revenue bonds [IRBs]) at 'BB+'. The Rating Outlook has been revised to Negative from Positive. The recent downgrade of CITGO's ultimate parent PDVSA is the main reason for the revision in Outlook at CITGO. Approximately U$D 1.08 billion in balance sheet debt is affected by today's rating action. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2111330&CategoryId=10717)

Bond market prices lower risk of Venezuela default

Recent credit default swap (CDS) spread movement for Petroleos de Venezuela (PDVSA) is copying Venezuela's and credit protection for the oil giant still being priced at stressed levels, according to Fitch Solutions in its latest CDS Case Study Snapshot. Five-year CDS on PDVSA have tightened 38% since mid-February and 19% over the past month, a trajectory similar to Venezuela. 'The CDS market is currently charging a 24% premium for credit protection on PDVSA's debt, as compared to the sovereign, up from 17%,' says Director Diana Allmendinger. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2110859&CategoryId=10717)

Politics

Poll shows 79.5% think Venezuela is doing badly

Eight out of 10 Venezuelans believe the country's situation is negative, according to a nationwide poll conducted by research firm DATANÁLISIS. Based on a poll taken between March 31 to April 20, 79.5% believe the country's situation is bad, 18.5% said it is good, and 2% made no comments. Half of those identified as Government supporters described the situation as bad. The figure goes up among dissenters and those who do not take any sides: 96.9% and 89.6%, respectively. (El Universal, http://www.eluniversal.com/nacional-y-politica/140505/a-total-of-795-thinks-venezuela-is-doing-bad)

"If Maduro wants to quit the talks, then he should just say so"

Just as a signature collection process for a proposed amnesty law was launched nationwide, Ramón Guillermo Aveledo, Secretary General of the Democratic Unity Conference (MUD) replied to a comment by President Nicolás Maduro accusing the opposition coalition of "blackmailing" the government by demanding concrete results from bilateral meetings started on April 10. "We‘ve been granted short-term credit by the people; that's what I refer to when I talk about showing results. That's no blackmail, it's a practical thing. In the presence of results, the promissory note will be extended by the holder, i.e. the people. Signs of credibility will be most needed along the long road ahead," Aveledo says. (El Universal, http://www.eluniversal.com/nacional-y-politica/140503/if-maduro-wants-to-quit-the-talks-then-he-should-just-say-so)

Maduro bodyguard shot dead

29 year-old Lieutenant Marco Cortez, a member of President Maduro's bodyguard unit was shot dead from another running vehicle while he was driving on a Caracas freeway, with his wife - who was unharmed. He was pronounced dead on arrival at the Military Hospital. He also worked on the security detail for the late President Chavez. One week ago the bullet riddled body of former Director of Intelligence, Eliécer Otaiza, was found in a little travelled road near Caracas. Maduro claimed he was the victim of former politicians now living in Miami. More in Spanish: (Infolatam)

Regime says 58 foreigners among unrest detainees

Interior Minister General Miguel Rodriguez Torres told a news conference that 58 foreigners had been arrested on suspicion of inciting anti-government protests and violence that have rocked the nation for the last three months. He said Colombians, an American, a Spaniard and an Arab were among the scores of "mercenaries" rounded up before and during demonstrations against the socialist government. He showed reporters numerous flow-charts and photos of alleged meetings, phone calls and plotting. (Reuters, http://www.reuters.com/article/2014/05/02/us-venezuela-protests-idUSBREA410TN20140502)

US Senate to explore human rights abuses in Venezuela

The US House Committee on Foreign Affairs has scheduled a hearing for Thursday, May 8, on allegations of human right abuses taking place during the street protests that have taken a death toll of 41 in Venezuela. The session will be attended by Roberta S. Jacobson, the United States Assistant Secretary of State for Western Hemisphere Affairs; Moisés Naím, an expert with the Carnegie Endowment for International Peace; José Miguel Vivanco, the director of the division for the Americas of NGO Human Rights Watch, and ex US Ambassador to Venezuela, Patrick Duddy. (El Universal, http://www.eluniversal.com/nacional-y-politica/140502/us-senate-to-explore-human-rights-abuses-in-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.

February 07, 2014

Economics & Finance

Central Bank cancels U.S. dollar auction, Maduro says next round will double amount to be offered

Venezuela's Central Bank said on Tuesday it had canceled this week's auction of U$D 220 million in U.S. currency after discovering anomalies among requests filed by private companies wanting to take part. The bank did not disclose what irregularities had taken place, but said in a statement it canceled the auction due to "a combination of anomalies and lack of compliance with the rules." In a later speech, President Nicolás Maduro promised there will be another auction called next Monday, this time for U$D 440 million, which is double the amount programmed in the cancelled event. (Bloomberg, http://www.bloomberg.com/news/2014-02-05/venezuela-s-central-bank-cancels-dollar-auction.htmlReuters: http://www.reuters.com/article/2014/02/05/venezuela-currency-auction-idUSL2N0LA02R20140205; http://www.reuters.com/article/2014/02/05/venezuela-currency-auction-idUSL2N0LA02R20140205; and more in Spanish: AVN; http://www.avn.info.ve/contenido/pr%C3%B3xima-subasta-del-sicad-ser%C3%A1-440-millones-d%C3%B3lares; http://www.avn.info.ve/contenido/ejecutivo-liquid%C3%B3-1300000-d%C3%B3lares-enero-para-importaciones-sectores-prioritarios; http://www.avn.info.ve/contenido/pr%C3%B3xima-subasta-del-sicad-ser%C3%A1-440-millones-d%C3%B3lares; El Universal, http://www.eluniversal.com/economia/140207/subastas-del-sicad-se-activan-el-lunes-con-oferta-de-440-millones; http://www.eluniversal.com/economia/140207/subastas-del-sicad-se-activan-el-lunes-con-oferta-de-440-millones: El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/-1-300-millones-se-cancelaron-a-sectores-productiv.aspx)

Only U$D 90 million sold by FOREX Board so far this year, as reserves rise by U$D 776 million

Sales of US dollars by the Ancillary Foreign Currency Administration System (SICAD) to the private sector stand at U$D 90 million so far this year, that is, U$D 3.2 million per day on average. While the allocation of US dollars has dropped, the country's international reserves have increased by U$D 776 million to U$D 21.23 billion. (El Universal, 02-06-2014; http://www.eluniversal.com/economia/140206/usd-90-million-sold-by-venezuelas-forex-board-so-far-this-year)

Private sector is paralyzed due to uncertain FOREX policy

The private sector, which is two thirds of GDP is paralyzed due to clear official guidelines on how to import supplies needed to maintain production. A month has passed and companies do not yet know which companies will be able to import at the VEB 6.3 rate, and which must enter SICAD auctions where the rate is between VEB 11-12/U$D. Stephen Robb, Finance Director at CLOROX, says the companies is losing money in Venezuela due to price controls and because of uncertainty as to "what will happen with currency?". More in Spanish: (El Universal, http://www.eluniversal.com/economia/140207/indefinicion-cambiaria-paraliza-al-sector-privado-de-la-economia)

Performance bond now mandatory for FOREX requests

The National Center for Foreign Trade (CENCOEX) has now published a "performance bond for exchange operations in the Bolivarian Republic of Venezuela." The bond requires business to produce a performance bond "for 100% of the total amount of the import in US dollars." (El Universal, 02-06-2014; http://www.eluniversal.com/economia/140206/performance-bond-made-official-for-forex-application-in-venezuela; and more in Spanish: AVN; http://www.avn.info.ve/contenido/cencoex-publica-modelo-contrato-fiel-cumplimiento-para-operaciones-cambiarias; El Universal, http://www.eluniversal.com/economia/140207/empresas-deberan-depositar-fianza-para-solicitar-divisas)

Venezuela's economy on the brink of recession

Cuts in foreign currency sales to the private sector for importing commodities, supplies, and finished products are pushing Venezuela's economy into recession. The economy has already slowed down, as growth declined from 5.6% in 2012 to 1.6% in 2013, and negative growth could be recorded in the first quarter. The automotive industry reported production at only 296 units in January, down 84% from January 2013. Similarly, businesses' stocks are falling, retailers have little to sell, and airlines are offering fewer flights. (El Universal, 02-06-2014; http://www.eluniversal.com/economia/140206/venezuelas-economy-on-the-brink-of-recession)

Fitch: Performance Deterioration Expected for Venezuelan Banks in 2014

Some performance deterioration in 2014 is expected for Venezuelan banks due to severe macroeconomic imbalances, which will contribute to operating environment risks, according to a Fitch Ratings report. 'A seasoning of credit portfolios, following high nominal loan growth that has exceeded more than 40% on average over the past three years could also result in a deterioration of Venezuelan banks' credit metrics,' said Theresa Paiz Fredel, Senior Director, Financial Institutions. 'Further government regulations and intervention could create additional challenges.' Nevertheless, absent a material increase in government intervention or a severe macroeconomic adjustment, bank financial metrics should remain well within the norm of similarly rated peers. Venezuelan banks have a large, negative mismatch between short-term assets and liabilities, while funding greater than one year is limited. However, this position is manageable under Venezuela's current scheme of foreign exchange controls. (Reuters, 02-06-2014; http://www.reuters.com/article/2014/02/06/fitch-performance-deterioration-expected-idUSFit68769320140206)

Risk perception grows as Venezuela's bonds hit new low

As investors see Nicolás Maduro's government fails to take effective actions to prevent the economy from slowing down, the risk perception of Venezuela's bonds increases. Both sovereign and oil giant Pdvsa's bonds maturing in 2027 and 2022 have dropped 1.44 and 1.55 points, respectively. Investment funds are requiring higher yields to keep Venezuelan bonds in their portfolios - and the insurance premium to cover any defaults by the Venezuelan state soared 33% in January, according to investment firm Kapital. (El Universal, 02-06-2014; http://www.eluniversal.com/economia/140206/risk-perception-grows-as-venezuelas-bonds-hit-new-low)

Oil & Energy

Venezuelans fume as government signals end to 'free' petrol

In the Socialist state that is home to the world’s largest oil and gas reserves, petrol is cheaper than water. But not for much longer. As global oil prices slump, President Nicolas Maduro has horrified Venezuelans by becoming the first politician in a decade to broach a rise in petrol prices. Keen to play down the country’s economic difficulties, Maduro insists that the government does not need the extra income, but says “it seems reasonable that production costs should be covered”. In December, Rafael Ramírez, the chairman of PDVSA and vice-president for economic affairs, said that a break-even cost of petrol would be between 2.4 and 2.7 Bolivars per liter, at least 34 times the current price. “We have to have a national discussion about whether or not the moment has arrived to charge for petrol,” he said. “In this country you don’t pay for petrol, because PDVSA pays for you to fill up with petrol". (The Daily Telegraph, http://www.telegraph.co.uk/news/10617632/Venezuelans-fume-as-government-signals-end-to-free-petrol.html)

Commodities

Glass containers: 20 day stock remaining

Francisco Anselmi, President of the Glass and Ceramics Industry Association says the industry's inventories of glass containers for food and medicine are down to 20 days.  He says companies are at 60% capacity due to lack of supplies, and adds that purveyors will not dispatch additional supplies until past due obligations are paid for. More in Spanish: (El Nacional; http://www.el-nacional.com/)

GENERAL MOTORS sees "no resolution" for operations in Venezuela

General Motors CFO Chuck Stevens says "we see no resolution to business operations in Venezuela on the horizon". He added that their results in South America for the 1Q 2013 will be "weaker, mainly because of lower production in Venezuela". More in Spanish: (El Universal, http://www.eluniversal.com/economia/140207/general-motors-no-ve-resolucion-a-sus-operaciones-en-el-pais; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/gm-dice-no-ver-horizonte-a-sus-negocios-en-venezue.aspx)

2013 was the worst year ever for the country’s basic industries, which produced only at 25%- 30% capacity, says Deputy Andrés Velásquez. He also charged funds from MINERVEN were used for reelection campaign of Bolívar state Governor General Francisco Rangel Gómez. (Veneconomy, 02-06-2014; http://www.veneconomy.com/site/index.asp?ids=44&idt=37968&idc=3)

International Trade

Trade with the US dropped 10,9% in 2013

Data from the Venezuelan American Chamber (VENAMCHAM) shows bilateral US-Venezuela trade was U$D 18.777 billion, which is 10.99% less than in 2012. Non-petroleum related exports were a mere 3.5% of the total amount. More in Spanish: (El Universal, http://www.eluniversal.com/economia/140207/intercambio-comercial-con-eeuu-cayo-109-en-2013)

Venezuela, Colombia to create joint plan to fight border smuggling

Venezuela and Colombia will draft an operational plan against border smuggling, says Venezuela's foreign minister Elias Jaua, speaking after a meeting with his Colombian counterpart Maria Angela Holguin, in Maracaibo, in the border state of Zulia. (AVN, 02-06-2014; http://www.avn.info.ve/contenido/venezuela-colombia-create-plan-fight-border-smuggling; El Universal, http://www.eluniversal.com/economia/140206/venezuela-colombia-foreign-ministers-ponder-actions-against-smuggling)

Logistics & Transport

Imports at Puerto Cabello could drop 32-36% this year

Sources within the Puerto Cabello port system believe imports there could drop 32%-36% due to stored cargo penalties that are unsustainable for the private sector. They say 60% of unclaimed cargo is government imports, and that half of the 12,543 unclaimed containers nationwide are in Puerto Cabello. More in Spanish: (El Nacional: http://www.el-nacional.com/)

Government seeks to streamline cargo handling, VENAVEGA to transport for government agencies

The government has issued a new resolution aimed at establishing a simplified procedure for imports, indicating that government entities can only request "strictly necessary" paperwork. The private sector has charged that importers face delays that start as soon as vessels arrive at port until the time cargo is delivered to them due to a lack of coordination among official agencies. General Hebert García Plaza, Minister for Aquatic and Air Transport, has charged that companies leave cargo unclaimed at port because "we have here a boycott and destabilization of the economy". A new resolution also designated the state owned Venezuelan Navigation Corporation (VENAVEGA) as the "principal means of maritime cargo transport" for all agencies and corporations in the public sector. Over the past few years the volume of imported food has turned the government into one of the main clients of several private shipping lines, but relations have tensed as state companies delay returning containers and companies such as PDVSA pile up debts with carriers. More in Spanish: (El Universal; http://www.eluniversal.com/economia/140207/ejecutivo-busca-simplificar-nacionalizacion-de-cargas; El Carabobeño, http://www.el-carabobeno.com/impreso/articulo/93319/-nacionalizacin-de-mercanca-debe-ejecutarse-en-cinco-das-hbiles; and AVN; http://www.avn.info.ve/contenido/corporaci%C3%B3n-venavega-responsable-del-transporte-carga-mar%C3%ADtima-estatal)

Cost dispute halts work on Panama Canal expansion

The project to expand the Panama Canal is in doubt after talks between the canal administrator and a Spanish-led building consortium fell apart and work ground to a halt. Group United for the Canal, a consortium led by Spanish builder SACYR, says the government's canal authority had broken off talks on who will pay some U$D 1.6 billion needed to complete the ambitious project. The Panama Canal Authority's head, Jorge Quijano, says the canal has held general talks with other companies about work still pending on the expansion, but was open to more talks with the consortium. He said the canal authority has demanded that the consortium resume work on the expansion. Quijano told a news conference the consortium had been "inflexible" and that the project would be completed in 2015 "with or without" it. He said talks had been complicated because another consortium member, Italy's SALINI IMPREGILO, had taken over the lead from SACYR. He said the canal was evaluating its next steps, but a deal was still possible. (Reuters)

Politics

Maduro threatens main business organizations after FEDECAMARAS announces suit over Fair Prices Law

President Nicolás Maduro warned the nation's main business organizations that their final day will come. He said 2014 will bring economic growth despite "traps" by Venezuela's principal business organizations. During a Cabinet meeting he said the top business group, FEDECÁMARAS, the National Trade Council (CONSECOMERCIO) and the Venezuelan-American Chamber (VENAMCHAM) have planned to destroy the nation's economy in order to overthrow his government. He called them "the trilogy of evil" and threatened that "their final hour will come". This week FEDECÁMARAS President Jorge Roig announced the group will bring suit to nullify the new Law on Fair Prices, which declares all business of public interest. More in Spanish: (Infolatam)

Opposition rift over street protests

Opposition standard bearer Henrique Capriles, who is also governor of Miranda state, distanced himself from the group of opposition leaders who have called for street action to debate the end of the Maduro regime, and said he does not support violent solutions or coups d' etat. He said that sector of the opposition "have no proposals...there is nothing", and pointed to his own focus on social issues. Street activity was called by Leopoldo Lopez, President of Voluntad Popular Party, and Maria Corina Machado, a legislator in the National Assembly. They were joined in a rally last Sunday by Metropolitan Caracas Mayor Antonio Ledezma. Capriles complained that despite Maduro's call for dialogue and joint efforts against crime, he has "again resorted to insults". He asked Maduro to "start working, you have destroyed the country". More in Spanish: (Infolatam)


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.

December 30th, 2011

Economics & Finance

BOFA-MERRILL LYNCH says Venezuela issues most debt in Latin America

The Chavez Administration has resorted to borrowing abroad to increase the government's cash flow to boost the economy. In its latest report on Venezuela, Bank of America Merrill Lynch states that this year the country issued US dollar denominated bonds for U$D 7.2 billion, which is 46% of all debt placed by the major economies of Latin America.  The financial institution forecasts that in 20012 Venezuela will continue to be Latin America’s largest issuer of foreign debt to cover its fiscal deficit, due to the policy of increased spending in the midst of an election year. (El Universal, 12-29-2011; http://www.eluniversal.com/economia/111229/venezuela-is-the-country-that-issues-most-debt-in-latin-america)

FITCH projects expanded credit and liquidity in the Venezuelan banking system

In a report analyzing tendencies within the Andean region’s banking system FITCH says Venezuela will continue increasing credit. “FITCH expects that the overall portfolio will continue to expand in real terms during 2012 as the expansive fiscal policy supports economic growth". More in Spanish: (El Universal; 12-29-2011; http://www.eluniversal.com/economia/111229/fitch-proyecta-expansion-del-credito-y-amplia-liquidez-en-la-banca)

Government held banks increase financing to Government up to 106%

The Finance Ministry is relying more on state controlled banks as a source for public spending. The Ministry sells bonds and Treasury bills on a weekly basis to these banks in order to increase cash availability. The Bank Superintendent reports that bond and bill portfolios increased by 106% from November 2010 to November 2011, from VB 24.388 billion to VB 50.255 billion. The main activity of government held banks is to purchase financial instruments from the Ministry. More in Spanish: (El Universal, 12-30-2011; http://www.eluniversal.com/economia/111230/banca-publica-eleva-106-financiamiento-al-gobierno)

Chavez creates Advisory Council on arbitration, expropriations

President Hugo Chavez created councils to advise the government on international arbitration cases and the expropriation of assets here. Chavez, who has seized assets from 1,045 companies since coming to power in 1999 according to Venezuelan manufacturing association CONINDUSTRIA, will receive a monthly report from the boards, according to two decrees published in the Official Gazette. (Bloomberg, 12-27-2911; http://www.bloomberg.com/news/2011-12-27/chavez-creates-advisory-councils-on-arbitration-expropriations.html)

Chavez claims 2011 GDP will be close to U$D 300 billion

According to President Chavez, 2011 GDP will be close to U$D 300 billion, up from less than U$D 100 billion a decade ago. He also claims per capita GDP is over U$D 10,000, up from U$D 4,000 during the same period. More in Spanish: (AVN, 12-29-2011; http://www.avn.info.ve/contenido/pib-cerrará-este-año-cerca-300-mil-millones and http://www.avn.info.ve/contenido/chávez-pib-cápita-supera-10000-dólares-al-cierre-2011)

Commodities

PDVSA's accounts receivable mount to U$D 10.7 billion

Energy agreements are hitting the finances of the Venezuelan oil industry. Financial statements from the state-run oil company Petróleos de Venezuela, S.A. (PDVSA) for the first half of 2011 show that the accounts receivable stood at U$D 10.7 billion. The report underlines that such accounts are related to PDVSA's oil supply agreements with other nations. But these obligations have soared up from U$D 7.4 billion at the end of the second half of 2010. (El Universal, 12-28-2011; http://www.eluniversal.com/economia/111228/pdvsas-accounts-receivable-amount-to-usd-107-billion)

Chavez: Venezuela will be world’s top oil exporter

Venezuela, which has the world’s largest certified reserves of petroleum, will become the top oil exporter within the next 10 years, says President Hugo Chavez. He has recently said: “We will reach (exports of) around 10 million barrels (per day) in the next decade”. The Andean nation was the globe’s No. 1 oil exporter from 1925 to “nearly 1970” and remains among the leaders, “but the Arabs – Saudi Arabia, Iraq, Iran (sic) – surpassed us,” Chavez said. (Latin American Herald Tribune, 12-28-2011; http://www.laht.com/article.asp?ArticleId=456802&CategoryId=10717)

Shortages of basic food items hits consumption in 2011

Poor food supply hit Venezuela throughout 2011. AS in previous years, Venezuelans had to spend more time and money to buy the basic basket of foodstuffs. Products with controlled prices were the most seriously affected. Essential food items such as powdered milk, edible oil and beef were hard to find during most of the year. Other items such as coffee, precooked corn flour and margarine were scarce during the second half of 2011. According to economic research firm DATANÁLISIS, the shortage index ended this year at 24.8%, according to their latest survey, compared to 8% in January this year. (El Universal, 12-28-2011; http://www.eluniversal.com/economia/111228/shortage-of-basic-food-items-hits-consumption-in-2011)

FAO reports food inflation lower in region, persists in Venezuela

According to the UN’s FAO general inflation remained stable in Latin America for the fourth consecutive month in November, as foodstuffs slowed slightly from the previous month. Annual foodstuff inflation in Latin America fell from 8.4% in October to 8.2% in November. The same reports says the annual food prices inflation increased by a percentage point in Chile, Panamá, Perú, Uruguay and Venezuela. More in Spanish: (El Universal, 12-30-2011; http://www.eluniversal.com/economia/111230/inflacion-en-alimentos-baja-en-la-region-pero-persiste-en-venezuela)

International Trade

Venezuela buying more weapons from Russia

Russia has approved credit worth U$D 4 billion to Venezuela to reinforce its military mainly in weapons. "Without the Russian readiness it would have been impossible for us to reach the training level and equipment we have now," says President Hugo Chavez, and adds that Venezuela will continue receiving air, land and sea defense equipment from Russia next year. According to Ígor Korotchenko, director of the Center that analyzes international weapons traffic, (TsAMTO), Venezuela took first place as a buyer of Russian army weaponry during 2011. Russian press agency RIA NOVOSTI reports that this year Venezuela boughtT-72B1 combat vehicles, BMP-3M infantry combat vehicles, BTR-80ª armored vehicles, artillery, missile launchers, anti-aircraft systems and other equipment. (Bernama, 12-29-2011; http://www.bernama.com/bernama/v5/newsworld.php?id=637108 and more in Spanish: El Universal, 12-30-2011; http://www.eluniversal.com/nacional-y-politica/111230/en-2011-venezuela-encabezo-compras-de-armas-rusas)

Chavez says Chinese banks to extend U$D 8 billion in financing

President Hugo Chavez said that Chinese banks will provide U$D 8 billion worth of loans next month for development projects, adding to the more than U$D 30 billion in financing since 2007 that is being repaid in oil. The Industrial & Commercial Bank of China will lend Venezuela U$D 4 billion, while the China Development Bank Corp. will loan another U$D 4 billion, renewing a bilateral investment fund, Chavez said today on state television. Bilateral trade between China and Venezuela will be about U$D 17 billion in 2011 and may reach U$D 20 billion next year, and Venezuela has increased its imports of household appliances from Qingdao Haier Co. and heavy machinery from XCMG Construction Machinery Co. using the credit line. (Business Week, 12-27-2011; http://www.businessweek.com/news/2011-12-27/chavez-says-chinese-banks-to-extend-8-billion-in-financing.html)

Politics

Chavez muses on US Latin America cancer plot, US calls comments “horrific”

President Hugo Chavez has questioned whether the US has developed a secret technology to give cancer to left-wing leaders in Latin America. Treated for cancer this year, Chavez spoke a day after news that Argentina's president had the disease. Fernando Lugo of Paraguay, Dilma Rousseff of Brazil and her predecessor Lula have also had cancer. Chavez said this was "very strange" but stressed that he was thinking aloud rather than making "rash accusations". "Would it be strange if they had developed the technology to induce cancer and nobody knew about it?, Chavez asked in a televised speech to soldiers at an army base. He said the Central Intelligence Agency was behind chemical experiments in Guatemala in the 1940s and that it’s possible that in year to come a plot will be uncovered that shows the U.S. spread cancer as a political weapon against its critics. State Department spokeswoman Victoria Nuland called the comments "horrific and reprehensible", and said they were not worthy of further response. (BBC News, http://www.bbc.co.uk/news/world-latin-america-16349845; http://www.bbc.co.uk/news/world-latin-america-1635906; Bloomberg, 12-28-2911; http://www.bloomberg.com/news/2011-12-28/chavez-u-s-may-be-behind-s-america-leaders-cancer.html; and Reuters, http://www.reuters.com/article/2011/12/29/us-venezuela-usa-cancer-idUSTRE7BR14I20111229)

Iranian president to visit Venezuela, Cuba

Iranian President Mahmoud Ahmadinejad is to visit Venezuela and Cuba as part of a four-nation Latin America tour in the second week of January 2012, an official said Wednesday. Ahmadinejad will also visit Nicaragua and Ecuador on the trip, his international affairs director, Mohammad Reza Forghani, told the official news agency IRNA. (AFP, 12-28-2011; http://news.yahoo.com/iranian-president-visit-venezuela-cuba-131516559.html)

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.