International Trade
New
Housing Minister announces building material has arrived from China
General Manuel
Quevedo, appointed this same week as the new Minister for Housing, has
announced that steel rods, bathroom equipment, doors, electric scaffolding,
window frames and other building materials have arrived at Puerto Cabello from
China for government housing programs. More in Spanish: (Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=26694)
Maduro closes Colombia
border crossing for 3 days
President Nicolas Maduro has ordered the
closure of a major border crossing with Colombia after three soldiers were
attacked while looking for smugglers. He the normally busy border in western
Tachira state would remain closed for 72 hours. He also vowed to mount a
special mission to boost protection for Venezuelans living along the 1,400 mile
(2,200-kilometer) border, an area long plagued by violence stemming from
Colombia's long-running conflict and the presence of drug-trafficking gangs. Maduro's
announcement came hours after the attack of three army officers while they were
carrying out patrols in the border town of San Antonio. Maduro said that the
assailants, who haven't been identified, shot the officers — two lieutenants
and a captain — from behind before fleeing on motorcycles. Maduro regularly
blames smugglers and paramilitaries allegedly linked to former Colombian
President Alvaro Uribe for violence that has spilled over the border in recent
years. As part of a government crackdown against the flow of contraband, the
government this year has closed the border in Tachira at night, deployed more
troops and toughened jail sentences for anyone caught smuggling. It's also
rolled a fingerprint-scanning system to restrict the amount of any single
product shoppers can buy. In total, the government says more than 6,000 people
have been arrested for smuggling in the past year and more than 28,000 tons of
food seized last year in anti-smuggling operations. Opponents say the
restrictions are futile and blame price and currency controls for much of the
criminality as goods purchased at ultra-low prices in Venezuela are resold for
huge profits in Colombia. (New York Times, http://www.nytimes.com/aponline/2015/08/20/world/americas/ap-lt-venezuela-colombia-border.html; More in
Spanish: Diario 2001, http://www.2001.com.ve/en-la-agenda/107143/presidente-maduro-ordena-cierre-de-la-frontera-con-colombia-en-tachira.html; AVN; http://www.avn.info.ve/contenido/presidente-maduro-orden%C3%B3-cierre-frontera-del-estado-t%C3%A1chira-colombia-72-horas; El Universal, http://www.eluniversal.com/nacional-y-politica/150820/ordenan-cierre-de-frontera-en-tachira-por-72-horas)
Oil &
Energy
Oil prices continue dropping further, WTI at
US$ 40.71
Analysts expected US
crude oil inventories to drop by 770,000 barrels, but instead they have grown.
WTI oil prices are now at US$ 40.71 per barrel, a 4.48% drop since Tuesday.
Brent, US$ 46.94, down 3.83%. More in Spanish: (El Universal; http://www.eluniversal.com/economia/150820/que-esta-pasando)
India expects
cash-strapped Venezuela to pay dues in oil
India’s Oil and Natural Gas Corp. is in
discussions to take US$ 535 million worth of crude in lieu of cash for its
share of sales from a Venezuelan oilfield. The company’s overseas unit, ONGC
Videsh Ltd., owns 40% of the San Cristobal field and invested about US$ 190
million in the project in 2008. State-run Petroleos de Venezuela S.A., or
PDVSA, holds the remaining stake. A deal to pay the Indian producer its share
of revenue from the field in crude should be reached by March, according to
Narendra Kumar Verma, the company’s managing director. Venezuela is already
repaying loans outstanding to China with crude. Shipments to China will reach
390,000 barrels a day at an estimated average price of US$ 51 a barrel this
year, up from 227,800 barrels at an average price of US$ 88.40 last year, according
to Barclays analysts. (Bloomberg: http://www.bloomberg.com/news/articles/2015-08-20/india-expect-cash-strapped-venezuela-to-pay-dues-in-oil)
Venezuela gets new oil
minister
President Nicolas Maduro has announced the
current head of state oil giant PDVSA will take over as minister of oil and mining
as well. Del Pino, a civilian who has led PDVSA since September 2014, is not
the first to take on the dual ministerial role in the oil-dependent OPEC member
state. Rafael Ramirez led the same two state oil bodies for a decade until he
was named foreign minister and later UN ambassador. Maduro voiced concern about
the continuing slide in crude prices, which have shed 27% since early June. Del
Pino will take over the ministry from
Asdrubal Chavez to allow the latter to run for parliament in December's key
election. The outgoing Chavez, a cousin of the late ruler, was not a
heavyweight in the oil sector and was generally seen as having more of a
political role. Del Pino, however, is seen as a technocrat vying to turn around
the socialist country's troubled oil sector. (Reuters, http://www.reuters.com/article/2015/08/19/venezuela-oil-idUSL1N10U02X20150819;
Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2394718&CategoryId=10717;
El Universal, http://www.eluniversal.com/nacional-y-politica/150819/president-maduro-appoints-new-petroleum-and-housing-ministers;
Agence France Press: https://en-maktoob.news.yahoo.com/venezuela-gets-oil-minister-152136267--finance.html)
Commodities
Domestic detergent production is grinding to a
halt
Detergent production
for domestic use is grinding to a halt. One week after COLGATE PALMOLIVE
announced it was stopping production for lack of packing materials, the POLAR
powdered soap plant (Las Llaves) had to follow suit for want of sodium sulfate,
which is an indispensable ingredient. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/se-detuvo-produccion-de-jabon-las-llaves.aspx#ixzz3jLYHLab7;
El Mundo, http://www.elmundo.com.ve/noticias/economia/empresas/polar-paralizo-produccion-de-jabon-en-polvo.aspx;
El Nacional; http://www.el-nacional.com/)
2,600 General Motors Venezuela’s workers were
sent home on forced
vacations as its inventories of raw material for car assembly got to zero. In
its Valencia plant, GM Venezuela has barely manufactured 4,400 units January
through Friday, August 14, i.e. 15.71% of its 4,000 units a month installed
capacity. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45124&idc=3)
Bread prices in Caracas went up 40% (Bs.10) in one week in the case of
the baguettes while other presentations went up Bs.10 to Bs.15. The daily 2001
explained the wheat flour imported by the government is being sold at US$ 800/ton,
almost twice what it would have cost if the dollars had been authorized to the
private sector when needed (US$ 450). (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45114&idc=3)
Workers at PEPSICOLA, POLAR, CARGILL and CLOVER
warehouses located
in La Yaguara asked the central government to repeal the expropriation and
eviction measure on the properties. They rallied outside their places of work
to ask the Housing and Habitat Ministry to find other vacant lots for housing
building in the city. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45115&idc=3)
Economy
& Finance
Cash-strapped Venezuela may sell gold reserves,
drive prices down further
Countries facing cash shortages may be tempted
to sell part of their gold reserves to raise funds, according to CITIGROUP
Inc., which cited Venezuela as a potential example amid concern it may default. Gold retreated to a five-year low in July as
the dollar rallied on prospects of higher U.S. interest rates. Should Venezuela
sell part of its gold, prices could see lows maintained, says the report. Venezuela
had 11.607 million ounces of gold as of September, according to data from the
International Monetary Fund. About 68% of the country’s reserves are in bullion
as of August, according to the CITIGROUP report. Venezuela “appears poised for a near-term crisis”
amid protests and shortages of basic goods as the country heads for parliamentary
elections in December, according to RBC Capital Markets Ltd. The cost of
insuring the government’s five-year bonds has rebounded to near a 12-year high.
In 2011 and 2012, Venezuela’s government repatriated most of bullion that it
had held in overseas banks. The move was ordered by then-President Hugo Chavez
as a safeguard against instability in financial markets. “The problem is most of the Venezuelan gold is located in Caracas,” said
one analyst, “No bank is going to take
collateral for gold that’s actually held in Caracas. (Bloomberg, http://www.bloomberg.com/news/articles/2015-08-19/cash-strapped-venezuela-may-sell-gold-reserves-citigroup-says)
Uruguay's Senate approves deal to buy back debt
with Venezuela at 38% discount
Uruguay's Senate has
unanimously approved a proposal to buy back that nation's US$ 434 million oil
debt with Venezuela's state oil company PDVSA for US$ 267 million, a 38%
reduction by US$ 167 million. More in Spanish: (El Universal, http://www.eluniversal.com/economia/150820/uruguay-adelantara-pago-de-deuda-por-267-millones; La Red 21, http://www.lr21.com.uy/economia/1249419-senado-sanciono-proyecto-ancap-saldar-deuda-pdvsa-compra-petroleo;
Entorno Inteligente, http://www.entornointeligente.com/articulo/6732163/Uruguay-le-pagara-$267-millones-a-Venezuela-;
http://www.entornointeligente.com/articulo/6732983/VENEZUELA-Senado-aproboacute;-proyecto-de-ley-para-saldar-deuda-con-Pdvsa-18082015;
Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/uruguay-le-pagara-a-venezuela-267-millones-de-dola.aspx;
El Nacional; http://www.el-nacional.com/)
Central Bank of
Venezuela publishes rules to centralize all official FOREX holdings
Venezuela has ordered all government banks and
institutions to centralize FOREX holdings at the Central Bank, and has
published the rules for the procedure. The financial service for special
accounts, required to pay the obligations in foreign currency abroad, should be
provided by the selected public agency and previously notified to the BCV. (El
Universal, http://www.eluniversal.com/economia/150819/central-bank-of-venezuela-publishes-rules-to-centralize-foreign-curren)
Venezuelan business federation
calls for economic consensus
The President of the Venezuelan Federation of
Chambers of Commerce and Industry (FEDECÁMARAS), Francisco Martínez, is calling
for urgent measures to oxygenate the economy; and alerts that those measures
must not depend on the upcoming parliamentary vote to be held in December. He
explained that if the government puts off actions aimed at improving the
economy over fears for a given electoral outcome, it would be a serious
mistake. Martínez commented that consensus was required among the public
sector, workers, and businessmen to take the necessary steps and actions to
recover the economy. (El Universal, http://www.eluniversal.com/economia/150819/venezuelan-business-sector-calls-for-economic-consensus)
Venezuelan bonds averaged a percent point loss
on Monday while the
PDVSA’s bonds dropped 2.21% in average. The ones which experienced the sharpest
drops were the PDVSA 2016 and the PDVSA 2021. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45116&idc=2)
Politics and
International Affairs
US again rejects Maduro accusations, Senator
Rubio calls him a "corrupt clown"
US State Department
spokesman John Kirby has said new charges by President Nicolás Maduro are
false. Maduro has claimed an alleged opposition member was involved in
murdering a women and pointed to a plot that would involve US legislators and a
former US diplomatic official. We have seen press reports and the video of this
criminal who made the charges and we say it is another baseless accusation
against US officials", he said. US Senator Marco Rubio said Venezuela's President is a "corrupt clown", and added "Maduro once said Chavez visited him
reincarnated as a bird, and it sounds as if he is having a similar episode".
More in Spanish: (El Nacional; http://www.el-nacional.com/)
Venezuela claims Guyana
has "hidden agenda"
Foreign Minister Delcy Rodríguez is warning
Caribbean countries of an alleged attempt by the Guyanese government to create
conflict among Latin American and Caribbean countries with the support of
foreign agents. Rodríguez is on a tour of the Caribbean started last week along
with Venezuelan Vice-President Jorge Arreaza, to lobby for the "peace diplomacy" advanced by
Venezuelan President Nicolás Maduro in an effort to recover the Essequibo. She
said: "We know Guyana has a hidden
agenda which it is not telling the Caribbean about". (El Universal, http://www.eluniversal.com/nacional-y-politica/150819/venezuela-warns-against-guyanas-conflictive-intention;
AVN, http://www.avn.info.ve/contenido/venezuela-raises-antigua-and-barbuda-banner-peace-diplomacy-defense-essequibo,
and more in Spanish: El Nacional; http://www.el-nacional.com/)
Political parties
fine-tune details
It’s only 80 days away from the parliamentary
elections on December 6, and all political actors in Venezuela are fine-tuning
the details for a vital election day that will help set the direction of the
country. On the one hand, there are parties that remain committed to democracy
all the way, as is the case of the Democratic Unity Roundtable (MUD). The MUD,
although suffering the full burden of illegal acts and arbitrariness by
Venezuela’s ruling elite over the past 15 years, is drawing the constitutional
path it will take from here until December 6, with the belief it has an
advantage of 20% in popular support over the ruling party, the United Socialist
Party of Venezuela (PSUV). (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2394705&CategoryId=10717)
Venezuelan opposition legislators
seek support of MERCOSUR parliament
A delegation of Venezuela's opposition umbrella
group United Democratic Round Table (MUD) legislators have presented their
PARLASUR counterparts (Parliament of the Common Market of the South -MERCOSUR),
with a copy of the draft bill for amnesty and political reconciliation in
Venezuela proposed by the coalition, and are requesting their support. (El
Universal, http://www.eluniversal.com/nacional-y-politica/150818/venezuelan-opposition-seeks-support-from-mercosur-parliament)
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.
