November 06th, 2012

Economics & Finance

Chávez says Venezuela's foreign indebtedness is only 25% of GDP, and points out that US foreign indebtedness is 300%. More in Spanish: (AVN, 11-06-2012; http://www.avn.info.ve/contenido/chávez-deuda-externa-venezuela-apenas-llega-al-25-sobre-producto-interno-bruto)

"Public and private enterprises working jointly are one way to build socialism", according to President Chavez, who added: "Venezuelan socialism includes all: professionals, media, businessmen. Do not listen to those crying wolf, I call upon all to work with us as many already are." More in Spanish: (AVN, 11-06-2012; http://www.avn.info.ve/contenido/quottrabajo-conjunto-entre-empresa-pública-y-privada-es-una-vía-para-construcción-del-soci)

SITME transactions rose by 56%, as CADIVI operations remain stagnant

According to the Síntesis Financiera publication, CADIVI approved U$D 22.9 in foreign exchange operations, only 4.6% above the same time frame in 2011; wile SITME approved U$D 6.8 billion, rising by 56%. This trend indicates imports are moving toward the SITME system, which uses VEB 5.30 to the U$D as a reference. More in Spanish: (El Universal, 11-06-2012; http://www.eluniversal.com/economia/121106/56-subieron-aprobaciones-de-divisas-por-medio-del-sitme)

Formal employment slowing down in Venezuela, according to the Labor Situation Report for Latin America and the Caribbean, prepared jointly by the UN Commission for Latin America and the International Labor Organization. The report shows a slight drop in formal employment during the first half of 2012. More in Spanish: (El Universal, 11-06-2012; http://www.eluniversal.com/economia/121106/reportan-desaceleracion-de-empleos-formales-en-el-pais)

Commodities

Gasoline imports from the US jump to 34,000 bpd in August

Data released by the US Department of Energy shows that Venezuela purchased gasoline made in the US consistently from December 2011 through August 2012. March was the only exception. Most recent information from August this year, indicates that the US dispatched 34,000 gasoline barrels per day to Venezuela in that month. It was the highest figure since February 2003, when Venezuela imported 36,000 barrels of gasoline from the US amid a temporary halt in the operations of the oil industry caused by a national civic strike. (El Universal, 11-05-2012; http://www.eluniversal.com/economia/121105/venezuelas-gasoline-imports-from-the-us-jumps-to-34000-bpd-in-august)

Fuel imports from Colombia rose by 91% this year, according to Colombia's National Statistics Department (DANE), which indicates Venezuela imported U$D 402.5 million in fuel this year, and are the top trade item between both countries.  Venezuela also imported U$D 214 million in animal stock and related products, and U$D 199 million in chemicals. More in Spanish: (El Universal, 11-06-2012; http://www.eluniversal.com/economia/121106/aumento-91-compra-de-combustibles-a-colombia)

PDVSA also comes up empty off Cuba

A well drilled by state oil giant PDVSA in Cuban waters of the Gulf of Mexico also has turned up dry, the Communist-ruled island’s official media reported Friday. This latest well, drilled with the Chinese-built Scarabeo 9 rig, “offers no possibility for commercial development,” the press reported Friday, citing a statement by Cuban state oil firm CUBAPETROLEO. (Latin American Herald Tribune, 11-02-2012; http://www.laht.com/article.asp?ArticleId=626006&CategoryId=10717;

Veneconomy, 11-04-2012; http://www.veneconomy.com/site/index.asp?ids=44&idt=32656&idc=4)

TNK-BP production up in Venezuela

Russian energy company TNK-BP said oil production from its joint venture in Venezuela increased 18% during the first nine months of the year. PETROMONAGAS, a joint venture between TNK-BP and Venezuelan state energy company Petroleos de Venezuela, or PDVSA, was 35.5 million barrels through September, an 18% increase from the same time last year. Boris Zilbermints, a vice president for international projects at TNK-BP, said Venezuela is key to the company's overseas portfolio. (UPI, 11-01-2012; http://www.upi.com/Business_News/Energy-Resources/2012/11/01/TNK-BP-production-up-in-Venezuela/UPI-48151351768587/)

Aluminum industry operates at 29% capacity

Primary aluminum output in Guayana, south Venezuela, continues to dwindle. Aluminum makers Venalum and CVG Alcasa comprise 1,301 cells, yet only 387 cells are operative. Both companies are running at 29% of their installed capacity. Operating problems are due to unsolved shortages of spare parts and raw material. Moreover, nearly 40% of personnel is absent amid poor transportation. In CVG Alcasa, low availability of cranes is accountable for production decline. (El Universal, 11-05-2012; http://www.eluniversal.com/economia/121105/venezuelas-aluminum-industry-operates-at-29-of-capacity)

Steel and cement to be imported by "socialist" builders, says Gerson Hernández, head of the Bolivarian Construction Chamber, who indicated housing projects for next year require additional inputs. He indicated negotiations are under way to import 180 thousand metric tons of steel and 100 thousand metric tons of cement from countries such as Argentina, Perú and Italy. More in Spanish: (El Universal, 11-06-2012; http://www.eluniversal.com/economia/121106/las-constructoras-socialistas-importaran-acero-y-cemento; El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/camara-bolivariana-de-constructores-preve-edificar.aspx)

Agricultural imports rose 99.6% in one year, according to the National Statistics Institute (INE), which indicated purchases abroad in these items rose to U$D 2.533 billion during the first semester this year, up from U$D 1.269 billion during the first semester 2011. More in Spanish: (El Universal, 11-06-2012; http://www.eluniversal.com/economia/121106/importaciones-del-sector-agricola-crecieron-996-en-un-ano; El Nacional; http://www.el-nacional.com/)

International Trade

"MERCOSUR is a way to increase trade with Northern Brazil", according to President Chavez, who says the area has a population above 60 million, and "of incalculable potential for trade and the development of Venezuela and Brazil". More in Spanish: (AVN, 11-06-2012; http://www.avn.info.ve/contenido/misión-mercosur-amplía-perspectivas-crecimiento-países-región)

Imports from Colombia up 70% in January-August

Venezuela-Colombia bilateral trade has been reactivated, clearly benefiting Colombian entrepreneurs in view of the rapid rise of sales to Venezuela. Data handled by the National Administrative Statistics Department of Colombia (DANE) shows that from January through August this year, Venezuela purchased U$D 1.77 billion in goods from Colombia, that is, 70% above the figure recorded during the same period in 2011 (U$D 1.04 billion). Meanwhile, Venezuelan exports to Colombia are growing at a much slower pace, reporting only a 12.3% increase from January through August 2012. (El Universal, 11-05-2012; http://www.eluniversal.com/economia/121105/venezuelan-imports-from-colombia-up-70-in-january-august)

Logistics & Transport

Incoming cargo processing can take 20 to 30 days due to excessive controls, according to Cipriana Ramos, president of Fedecámaras in Vargas state. She said controls applied by CADIVI, SENIAT, sanitary authorities, the National Guard, Customs and the Agriculture Health Institute also bring on added cost. She says that at La Guaira Port the waiting period can go up to around 30 days. More in Spanish: (Notitarde, 11-06-2012; http://www.notitarde.com/La-Costa/Excesivos-controles-portuarios/2012/11/05/143854; El Carabobeño, http://www.el-carabobeno.com/impreso/articulo/37990/arribo-masivo-de-cargas-graneleras--a-puerto-cabello-agudiza-retrasos)

Politics

A victory by Obama or Romney will not bring change in bilateral relations, says President Chavez who also saluted the Sandinista victory in municipal elections in Nicaragua. More in Spanish: (El Universal, 11-06-2012; http://www.eluniversal.com/internacional/121106/para-chavez-victoria-de-obama-o-romney-no-traera-cambios)

September 21th, 2012

Economics & Finance

Reserves fall to five-year low before vote

Venezuela’s international reserves fell to near their lowest level in five years as the government boosts spending ahead of next month’s presidential election.  The central bank said reserves fell U$D 300 million between Sept. 13 and Sept. 14 to U$D 25.2 billion, nearing the lowest since July 30, 2007, according to figures released today by the central bank. Reserves dipped to U$D 25 billion on May 31, and were below U$D 25.2 billion two days in June. (Bloomberg, 09-20-2012; http://www.bloomberg.com/news/2012-09-17/venezuela-s-currency-reserves-fall-to-five-year-low-before-vote.html; El Universal; http://www.eluniversal.com/economia/120920/venezuelas-international-reserves-fall-usd-26-billion-in-two-months)

2012 budget exceeds its U$D 93 billion cap

Venezuela's 2012 budget initially was set at U$D 69.2 billion, yet new liabilities and government demands have forced the government to approve additional funding, increasing the budget by 36% (to U$D 94.4 billion). Since January, the National Assembly has approved AN additional U$D 25.1 billion, and last Tuesday it authorized yet another U$D 1.9 billion. (El Universal, 09-20-2012; http://www.eluniversal.com/economia/120919/venezuelas-2012-budget-surpasses-the-usd-93-billion-cap)

Elections ignite investor enthusiasm

Interest has risen in Venezuelan sovereign debt bonds as Presidential elections draw closer and several polls show opposition candidate Henrique Capriles gaining. Capriles has pledged to correct fiscal imbalances and carry out reforms. Brian Coulton, an investment strategy official at Legal & General Investment Management in London says "Venezuela is being watched very closely. Investors have become enthusiastic with signs that the opposition is gaining ground". More in Spanish: (El Nacional, 09-21-2012; http://www.el-nacional.com/)

CADIVI allocates less FOREX to business

A study by the Venezuelan American Chamber of Commerce shows that currency allocated to major firms has slowed down over the past weeks, particularly in food, personal care, home products and the automotive industry. VENAMCHAM General Manager Carlos Tejera reports that 68% of firms in consumer products from all sectors report fewer approvals by the currency board. More in Spanish: (El Nacional, 09-21-2012; http://www.el-nacional.com/)

Cheap credit fails to drive industry

The government is forcing the banking system to grant low interest credits to industry, agriculture, tourism and small business, but according to a study by ECOANALITICA results are beneath expectations. More in Spanish: (El Universal, 09-21-2012; http://www.eluniversal.com/economia/120921/fracasa-el-credito-barato-como-impulso-a-la-industria)

Government claims unemployment down from 8.3% to 7.9% since last year, in a report by the National Statistics Institute. More in Spanish: (AVN, 09-21-2012; http://www.avn.info.ve/contenido/desempleo-bajó-83-79-entre-agosto-2011-2012; El Universal, http://www.eluniversal.com/economia/120921/disminuye-tasa-de-desempleo-y-cierra-en-79-en-agosto)

Debt repayment will impact public finances

In 2013, Venezuela must to pay U$D 9 billion in foreign currency bond maturities, according to Angel García Banchs, President of the ECONOMETRICA consulting firm. Although international market conditions may allow Venezuela to issue new bonds in order to pay maturities, García says that when the US monetary policy changes, maturities will be increasingly difficult for the next five years. (El Universal, 09-20-2012; http://www.eluniversal.com/economia/120920/payment-of-debts-to-hit-venezuelas-public-finances)

Commodities

Government sees refinery fire out soon

A fire caused by lightning at Venezuela's 146,000-barrel-per-day El Palito refinery ignited two naphtha storage tanks.

The incident revived painful memories of last month's disaster at the 645,000-bpd Amuay plant, the country's biggest oil refinery, when a gas leak caused an explosion that killed 42 people, injured dozens and damaged 1,600 homes. Asdrúbal Chavez, Vice-President of Refining, Trade and Supply of state oil company PDVSA (and a cousin of President Chavez), says the fire, is currently affecting one naphtha storage tank only, adding that the situation is "completely under control." He also said other refinery facilities are operating normally. President Chavez says the fire will be extinguished shortly and ruled out sabotage. (Reuters, 09-20-2012; http://www.reuters.com/article/2012/09/20/venezuela-refinery-idUSL1E8KK5EJ20120920; El Universal, 09-20-2012; http://www.eluniversal.com/economia/120920/pdvsa-daily-operations-continue-despite-fire-in-refinery; Bloomberg, http://www.bloomberg.com/news/2012-09-20/pdvsa-working-to-extinguish-fire-at-el-palito-naphtha-tank.html; The Washington Post, http://www.washingtonpost.com/business/fire-at-venezuelan-oil-refinery-likely-sparked-by-lightning-officials-say/2012/09/20/0310c0a2-032f-11e2-9132-f2750cd65f97_story.html; El Universal, 09-20-2012; http://www.eluniversal.com/economia/120920/authorities-fire-at-el-palito-refinery-may-be-put-out-in-the-next-hour; and more in Spanish: El Universal, 09-21-2012; http://www.eluniversal.com/economia/120921/pdvsa-espera-controlar-hoy-incendio-en-refineria-el-palito)

Venezuela and China agree to increase cement production

The Government and the Catic Beijing Chinese firm have signed an agreement to increase production at the Cementos Andino plant in Trujillo state, from 750,000 to 1.2 million tons per year. The plant is expected to double production over 16 months after a U$D 239.76 million investment. More in Spanish: (AVN, 09-21-2012; http://www.avn.info.ve/contenido/venezuela-y-china-suscriben-acuerdo-para-aumentar-producción-cementos-andino; El Universal, http://www.eluniversal.com/economia/120921/empresa-china-ampliara-produccion-de-cemento-andino)

International Trade

Colombian trade with Venezuela is expected to reach U$D 3 billion this year, according to Colombian Trade, Industry and Tourism Minister Sergio Díaz Granados, who foresees  20% growth over 2011. More in Spanish: (El Mundo, 09-21-2012; http://www.elmundo.com.ve/noticias/economia/internacional/diaz-granados---comercio-con-venezuela-alcanzara-$.aspx)

Logistics & Transport

Nine cargo food ships waiting at anchor in bay

There are 25 ships waiting at anchor in areas A and B of the bay of Puerto Cabello for entry into the local docks. The number increased since last Monday. Nine freighters: Day Dream Believer, Bassic Ocean, Marataha Promise, Emely Balket, Ijsselborg, Basic Brave, Pamir, Tampa and Tao UBC Brave are bearing food in bulk loads as yellow corn, paddy rice, malt and sugar. More in Spanish: (El Carabobeño, 09-20-2012; http://www.el-carabobeno.com/impreso/articulo/32338/-nueve-buques-con-cargas-alimenticias-esperan-fondeados-en-baha)

Politics

Henrique Capriles met with Colombian President Juan Manuel Santos

Colombian President Juan Manuel Santos met with Presidential candidate Henrique Capriles Radonski, in his office at the Bogotá Presidential Palace. At the meeting, President Santos reaffirmed Colombia's neutrality toward the Venezuelan elections, hoped for a massive and peaceful participation of the Venezuelan people, and addressed the need to continue harmonious efforts to foster Colombia-Venezuela relations. (El Universal, 09-20-2012; http://www.eluniversal.com/nacional-y-politica/120920/president-santos-remains-neutral-in-venezuelan-presidential-election)

Chavez cites telephone tracking poll showing him 14.7% points above Capriles

According to the alleged DATANALISIS telephone tracking poll, President Chavez now has a 43.8% vote intention, against 29.1% for Capriles. The report is said to show that on the basis of 1200 telephone calls to people somewhat certain and very sure they will vote, 8.8% did not answer and 14.4% said they "didn´t know", which amounts to 23.2% potential swing votes. The President reported these results on national television but did not clarify how he obtained them. More in Spanish: (El Universal, 09-21-2012; http://www.eluniversal.com/nacional-y-politica/120921/segun-sondeo-chavez-esta-147-puntos-sobre-capriles)

Cardinal Urosa calls on Venezuelans to vote "bravely" on October 7th, and

Caracas Archbishop Jorge Cardinal Urosa also called voting a "serious moral obligation", and called on Venezuelans to vote massively on October 7th, "according to their own conscience".  He added: "Only God will know for whom we vote. Reject improper threats."  More in Spanish: (El Universal, 09-21-2012; http://www.eluniversal.com/nacional-y-politica/120921/urosa-llama-a-los-venezolanos-a-votar-con-valentia-el-7-0)

Cancer? What cancer? Chavez's health off radar as vote nears

Just months ago, it was the issue dominating Venezuela and its presidential campaign. Now Hugo Chavez's bout with cancer is barely mentioned as his Oct. 7 re-election bid approaches. Once-frenetic rumors about Chavez's health have cooled to almost nothing while voters prepare to decide who will lead Venezuela - and control its vast oil reserves - for the next six years. Chavez, a socialist firebrand known for lambasting the U.S. "empire," faces market-friendly challenger Henrique Capriles, a 40-year-old lawyer and state governor who has vowed to end the seizure of private businesses and create jobs by attracting private investment. (Reuters, 09-19-2012; http://www.reuters.com/article/2012/09/19/venezuela-election-cancer-idUSL1E8KHDI020120919)

Some 40 Latin American and international organizations on Human Rights said Wednesday Venezuela’s departure from the Inter American Court will have “serious repercussions” for Venezuelans. They asked the Venezuelan State to reconsider its decision and called on the OAS member countries to “urge Venezuela not to deprive its citizens from access to the highest court of the regional system of human rights protection.” (Veneconomy, 09-19-2012; http://www.veneconomy.com/site/index.asp?ids=44&idt=32131&idc=1)

July 10th, 2012

Economics & Finance

56% of reported foreign investment is non repatriated dividends

According to an UNCTAD (UN Commission for Trade and Development) report on foreign investment in 2012, Venezuela received foreign investments of U$D 5.3 billion. However, more than half the amount - some 56% is due to repressed earnings by multinational corporations that have not been able to repatriate dividends because they have not been authorized by the local currency board. Eduardo Porcarelli, executive director of the National Investment Promotion Council says "Venezuela has exchange controls and part of the earnings must be reinvested locally as they cannot be repatriated. It is difficult to ascertain which companies have an investment policy and which do so as they have no other choice." More in Spanish: (El Nacional, 07-10-2012; http://www.el-nacional.com/)

Price adjustments frozen in order to contain inflation

Executive Vice President Elias Jaua has conceded that the slowdown in inflation this year is the result of "a correct policy of regulation and subsidies" on the part of the government. Official anti-inflation strategy has been to freeze price adjustments, not only on regulated items, but also on other products that impact the National Consumer Price Index. More in Spanish: (El Universal, 07-10-2012; http://www.eluniversal.com/economia/120710/gobierno-contiene-la-inflacion-al-evitar-ajustes-de-precios)

Government spending is up  by 24% in real terms, according to information supplied by the Ministry of Finance for the first half of 2012. (El Universal, 07-09-2012; http://www.eluniversal.com/economia/120709/central-government-spending-leaps-24)

International reserves rose 12% in four days, from U$D 25.238 billion to U$D 28.393 billion, which increases the amount of currency disposable for imports and FONDEN programs in advance of October elections. More in Spanish: (El Universal, 07-10-2012; http://www.eluniversal.com/economia/120710/reservas-internacionales-suben-12-en-cuatro-dias)

Commodities

Chavez sees oil stabilizing at U$D100 per barrel

President Hugo Chavez says that "The price of oil is going to stabilize around U$D100 per barrel. Everything seems to indicate that," he told a news conference. International reserves were dropping, Chavez said, except in a few countries like Venezuela, Iran and Saudi Arabia. "And the needs are going to keep growing," he said. (Reuters, 07-09-2012; http://www.reuters.com/article/2012/07/09/us-venezuela-oil-idUSBRE8681CC20120709)

Venezuela’s export barrel recovered significantly, gaining U$D 6.70/bbl. or 7.77% to U$D 92.87/bbl., during the week that concludes today, informed the Oil and Mining Ministry in its Twitter account. The Venezuelan oil has thus put an end to eight consecutive weeks of losses during which it lost over 20% of its price. (Veneconomy, 07-09-2012; http://www.veneconomy.com/site/index.asp?ids=44&idt=31206&idc=4)

TOTAL aims to triple output at Venezuelan gas field

French oil major TOTAL said on Monday it would boost capacity later this year at the Yucal Placer gas field in Venezuela as part of a plan to triple its output by the end of 2014. The Yucal Placer field, a project whose owners also include Spanish energy company REPSOL YPF and Venezuela's INEPETROL and OTEPI, came on stream in 2004. Work on the new development phase of the field will start later this year to increase production to around 300 million cubic feet per day, or approximately 55,000 barrels of oil equivalent, by the end of 2014, TOTAL said. That is three times its current production. (Reuters, 07-09-2012; http://www.reuters.com/article/2012/07/09/total-venezuela-idUSL6E8I97L720120709)

Cement production dropping

Spokesmen for the National Cement Workers Union are warning that cement production - in an industry taken over by the government in 2008 - has dropped from 10,000 metric tons per year to 7.9 million tons, which is 20% less than production capacity. More in Spanish: (Ultimas Noticias, 07-10-2012; http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/alertan-sobre-caida-de-la-produccion-de-cemento.aspx)

International Trade

Paraguay sues to prevent Venezuela's entry into MERCOSUR

Paraguay has presented the MERCOSUR Permanent Tribunal with a suit against its suspension as a member of the trading group, as well as against Venezuela's incorporation without the approval of the Paraguayan Senate. A spokesman for the legal team says "Our action points to the violation of treaties such as the Asunción Agreement, the Ouro Preto and Ushuaia Protocols, as well as international law tenets on equal justice and non intervention." More in Spanish: (El Nacional, 07-10-2012; http://www.el-nacional.com/)

Uruguay's Vice President says MERCOSUR is "seriously wounded" by Venezuela's entry

Uruguayan Vice President Danilo Astori, who is responsible for his government's economic team, considers Venezuela's entry into MERCOSUR negative for the region, and says it was "agreed to at a summit held in Mendoza by the Presidents of Argentina, Brazil and Uruguay, without regard for current institutions". He calls the event the most serious institutional wound suffered by MERCOSUR in all its history. More in Spanish: (El Universal, 07-10-2012; http://www.eluniversal.com/nacional-y-politica/120710/dicen-que-ingreso-de-venezuela-a-mercosur-deja-grave-herida)

Venezuela in conflict with MERCOSUR doctrine

If Venezuela enters MERCOSUR as full member next July 31 it will have to change into a free-market economy instead of one controlled by the government. This is opposite of what Venezuela has been doing, but the Asunción Treaty  which establishes a Common Market between Argentina, Brazil, Paraguay and Uruguay requires "the free movement of goods, services and factors of production between countries through, inter alia, the elimination of customs duties and non-tariff restrictions on the movement of goods, and any other equivalent measures." (El Universal, 07-09-2012; http://www.eluniversal.com/economia/120709/venezuela-clashes-with-mercosur-doctrine; http://www.eluniversal.com/economia/120707/venezuela-four-years-to-adopt-mercosur-rules)

Chavez will travel to Brazil for MERCOSUR entry

President Hugo Chavez confirms he will travel to Río de Janeiro on July 31st for his country's incorporation into MERCOSUR. More in Spanish: (Últimas Noticias, 07-10-2012; http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/chavez-estara-en-brasil-para-ingreso-al-mercosur.aspx)

Logistics & Transport

Shippers report "widespread congestion" at local ports, apply surcharges

Shipping companies have notified Venezuelan clients of a surcharge for bringing cargo into the country due to "widespread congestion". A local client has received a message from a shipping company which says "We must advise you that due to the general situation at Venezuelan ports we will a Congestion Surcharge/Destination starting July 1st, 2012". The surcharge will be U$D 50 on 20 foot containers; U$D 100 on 40 containers and an equal amount for "high-cube" equipment. This is not an isolated case as there is "great concern among worldwide shippers due to enormous delays on vessels when they come to Venezuela", says a source close to maritime transportation. The increase in incoming vessels bearing imported food is one of the key causes for delays. "We have had ships waiting up to 30 days in order to dock. The government has become the main importer and does so without any planning", says another source. The situation has become further aggravated at Guanta, where - according to sources close to the terminal - a group of "pirates" assaulted cargo at a one of the ships at dock. More in Spanish: (El Universal, 07-08-2012; http://www.eluniversal.com/economia/120708/navieras-reportan-congestion-generalizada-en-puertos-locales)

Politics

Chavez will not debate Capriles or sign pre-election game rules

In his first campaign press conference President Chavez called any pre-election rules agreement "illegal", and refused to debate Henrique Capriles. He has announced he will start touring the country in his reelection bid. "That proposal for not co-opting all mass media, not using public resources, and respecting election results, would be a part of  a destabilizing strategy", he said. More in Spanish: (El Nacional, ; http://www.el-nacional.com/)

Chavez again claims he is "totally free" of cancer

This Monday President Hugo Chavez again declared himself fully recovered from cancer and ready to return to the streets for his re-election campaign ahead of an October vote. "Free, free, totally free," an ebullient Chavez told reporters when asked if he was free of the disease that struck a year ago. (Reuters, 07-09-2012; http://www.reuters.com/article/2012/07/10/us-venezuela-election-chavez-idUSBRE8681CQ20120710; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=535359&CategoryId=10718; The Washington Post, http://www.washingtonpost.com/world/the_americas/venezuelas-chavez-says-hes-beaten-cancer-recuperation-wont-affect-re-election-bid/2012/07/09/gJQA72Y6YW_story.html; Fox News, http://www.foxnews.com/world/2012/07/09/chavez-says-been-completely-cancer-free/)

DATANALISIS: Pro Chavez voting intention at 57.22%

The latest survey by polling firm DATANALISIS, carried out between May 29 and June 28, 2012, shows voting intention in favor of Hugo Chavez Frias at 57.22%. A pro government television analyst has said that -according to the survey- if elections took place on Sunday, Chavez would have 47% and his nearest contender Henrique Capriles Randonski 30%, with undecided voters at 23%. (AVN, 07-09-2012; http://www.avn.info.ve/node/121454)

Chavez congratulates Mexico’s Peña Nieto on election victory

President Hugo Chavez has congratulated Mexico’s president-elect on his victory in the July 1 balloting and expressed his willingness to deepen bilateral ties, according to a statement by the Venezuelan Foreign Ministry. (Latin American Herald Tribune, 07-07-2012; http://www.laht.com/article.asp?ArticleId=534261&CategoryId=10717)

March 09, 2012

Economics & Finance

Central Bank says there will be no devaluation this year, increases foreign currency flow to public

Nelson Merentes, President of the Central Bank has said there will be no devaluation this year, but added that this is something that depends on “economic dynamics”, adding that the Government is trying to “closet he gap between the official exchange rate and the unofficial ones”. Merentes made his statements during a CNN interview. At the same time and in order to stem inflation, it has increased the supply of foreign currency supply through the System for Transactions in Foreign-Currency Denominated Securities (SITME) to expedite imports and to steady the supply of goods. SITME provides State or Pdvsa-issued US dollar-denominated bonds in bolivars in order to resell them abroad and obtain US dollars at an exchange rate of VEB 5.30. From January 1 to March 6h, companies purchased bonds on the order of U$D 1.72 billion from SITME, an amount 31% higher than in the same period of 2011. When the bonds are sold abroad, companies must absorb a discount on price of these securities. (El Universal, 03-08-2012; http://www.eluniversal.com/economia/120308/central-bank-of-venezuela-boosts-foreign-currency-supply; and more in Spanish: El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/merentes-descarta-devaluacion-este-ano.aspx)

Frozen corporate dividend repatriation mounts to around U$D 9.436 billion

The ECOANALITICA economic analysis firm reports that international companies operating in Venezuela have a dividend repatriation backlog of some U$D 9.436 billion due to processing delays at Venezuela’s Currency Board (CADIVI). The figure includes both official requests pending with CADIVI and those that have not yet been registered because the exchange authority will not accept additional requests until previous ones have been adjudicated. More in Spanish: (El Universal, 03-09-2012; http://www.eluniversal.com/economia/120309/crece-deuda-de-cadivi-por-repatriacion-de-dividendos)

Investment climate is seriously deteriorated

Carlos Tejera, general manager of the Venezuelan-American Chamber of Commerce and Industry (VENAMCHAM), says that investment climate has seriously deteriorated in Venezuela."It is obvious that foreign investor perception about Venezuela's country risk is high. It is evident that according to academic and objective criteria there is a bad assessment about our country's risk and the rule of law in Venezuela," Tejera noted. (El Universal, 03-06-2012; http://www.eluniversal.com/economia/120306/venamcham-venezuelas-investment-climate-has-seriously-deteriorated)

Special funds managed by the Executive estimated around U$D 52 billion

Special – not budgeted - funds managed by the Government have continued to increase. According to the ECOANALITICA firm, by the close of January they were up to U$D 52 billion, an increase of 52.8% over last January year. More in Spanish: (El Nacional, 03-09-2012; http://www.el-nacional.com/)

Inflation decreased 1.1% in February

The National Consumer Price Index (CPI) registered an inter-monthly variation of 1.1%, according to the monthly report published jointly by the Venezuelan Central Bank (BCV) and the National Statistics Institute (INE). The monthly report highlights that it is a positive indicator, as it has been falling for three consecutive months and "it is the lowest value registered since January 2008." (AVN, 03-06-2012; http://www.avn.info.ve/node/102128; El Universal, http://www.eluniversal.com/economia/120306/inflation-hits-the-lowest-month-to-month-increase-since-january-2008)

Commodities

ECOANALITICA estimates PDVSA loses around U$D 6.8 billion a year in China operations

According to the ECOANALITICA firm around U$D 3.5-5 billion are discounted from the price of oil shipments in order to amortize loans from China, and also makes interest payments around U$D 1.8 on bonds issued, which hinders its ability to fund the special investment plan. More in Spanish: (El Nacional, 03-09-2012; http://www.el-nacional.com/)

PDVSA, Chevron ready U$D 2 bln oil project credit

State oil company PDVSA and U.S. oil major Chevron are readying a U$D 2 billion credit to expand oil production at the PETROBOSCAN joint project, sources close to the operation said on Tuesday. "The conditions for the credit have already been negotiated. The U$D2 billion will be loaned by Chevron's headquarters," said one of the sources who were not authorized to speak on the record about the deal. PETROBOSCAN, in western Venezuela, now produces 115,000 barrels per day of crude and is 60% controlled by PSVSA and 40% owned by Chevron. (Reuters, 03-06-2012; http://www.reuters.com/article/2012/03/06/venezuela-oil-idUSL2E8E6D5R20120306)

PDVSA to trade bonds in the Hong Kong Stock Exchange which would expand its markets says Oil and Mining Minister Rafael Ramírez. He also said State oil company is not planning to sell part of its shares. Ramírez did not detail amounts or the time in which PDVSA would concrete the registration in the market and he also discarded a short-term securities issuance. (Veneconomy, 03-08-2012; http://www.veneconomy.com/site/index.asp?ids=44&idt=29714&idc=4)

Government expects to produce 8.3 million tons of cement in 2012

Raúl Pacheco, Vice Minister of Productivity Management, predicts the Executive will to produce 8.3 million tons of cement in 2012 to further strengthen the country's infrastructure, as well as the housing construction program. He says that cement production was 7.77 million tons in 2011. (El Universal, 03-06-2012; http://www.eluniversal.com/economia/120306/venezuelan-govt-to-produce-83-million-tons-of-cement-in-2012)

Steelmaker stopped production of 14,000 tons of rebars

The production steel bars in state-run steelmaker Siderúrgica del Orinoco (SIDOR) was stopped for two weeks, which hit the manufacture of rebars essential to meet goals within the government’s housing program. Operations started up again Monday. (El Universal, 03-06-2012; http://www.eluniversal.com/economia/120306/venezuelan-steelmaker-stopped-producing-14000-tons-of-rebars)

Government regulates fuel sales in Venezuela's border states

The Ministry of Petroleum and Mining published rules for "setting up, operating and regulating" a system for fuel sales in Venezuela's border states. Users must register with the Control System for Fuel Supply (SISCCOMBF) in order to receive a tag or electronic identification, which is essential to buy fuel under government regulations.  Rules define five types of users, namely "end-users, residents, tourists, travelers, and emergency users." End-users who are not registered with SISCCOMBF will only be allowed to buy fuel up to three times. (El Universal, 03-06-2012; http://www.eluniversal.com/economia/120306/government-regulates-fuel-sales-in-venezuelas-border-states)

Harvest shares surge on Venezuela divestment plan

Harvest Natural Resources Inc. (HNR) climbed the most in four years after announcing it’s in exclusive talks to sell assets in Venezuela. Harvest rose 23% to U$D 7.70 at the close in New York, the biggest gain since June 18, 2007. The Houston-based oil producer is in exclusive talks to sell its 32% stake in the PETRODELTA joint venture in Venezuela, it said. “While no dollar amounts were provided, news of an imminent sale has nonetheless put a charge into shares today,” Chad Mabry, senior oil and gas analyst at Rodman & Renshaw LLC in Houston, said today in an e-mailed note to clients. (Bloomberg, 03-06-2012; http://www.bloomberg.com/news/2012-03-06/harvest-shares-surge-on-venezuela-divestment-plan-caracas-mover.html; El Universal, 03-06-2012; http://www.eluniversal.com/economia/120306/harvest-natural-seeks-to-sell-stake-in-petrodelta)

Power failure hits Andean region and Barinas

The Andean states of Trujillo and Mérida, and Barinas (plains) have been hit by power rationing due to an outage occurred last weekend at the José Antonio Páez hydroelectric power plant. As a result, generating units 3 and 4 and one of the transformers were left out of service. According to an unofficial report, a load of 70 megawatts has not been supplied during peak hours in several Andean and plains towns: Trujillo (30 MW), Mérida (10 MW) and Barinas (30 MW). (El Universal, 03-08-2012; http://www.eluniversal.com/economia/120308/power-failure-hits-andean-region-and-barinas)

Logistics & Transport

Venezuela’s tax authority (SENIAT) unifies criteria with customs agents in Vargas state to begin data transmission via the SIDUNEA World technological platform, scheduled for next month and which is expected to expedite operations. SENIAT is considering an expansion of this system customs operation at Guanta and Puerto La Cruz, in Anzoátegui, and Valencia, in Carabobo. (Veneconomy, 03-08-2012; http://www.veneconomy.com/site/index.asp?ids=44&idt=29721&idc=2)

Politics

Chávez tells Santos he will return home next week, approves trade agreement

Colombian President Juan Manuel Santos met Wednesday afternoon with his President Chávez in Havana, Cuba, and reports that the Venezuelan Head of State told him that he plans to return to Venezuela early next week, after he underwent a surgery to remove a cancerous tumor. "We found him in good health condition, happy and in good spirits. He told me his recovery is going well." Santos spoke at the end of a short visit to Cuba. Both presidents discussed issues related to the Colombia-Venezuela bilateral trade agreement. "We had not given a green light to the annexes that our ministers and experts discussed for the trade agreement with Venezuela to take effect. We have given the green light and all we have left is the signing of the annexes by the foreign ministers. In order to save time, we are going to draft the corresponding decrees and take the steps for the agreements to take full effect as soon as possible," the Colombian leader added. (El Universal, 03-08-2012; http://www.eluniversal.com/nacional-y-politica/120308/chavez-tells-santos-he-will-return-home-next-week)

Journalist in eye of Chavez cancer storm

Derided as a "liar" and "clown" by President Hugo Chavez's allies, a bespectacled 66-year-old journalist has defied the verbal barrage to become a must-read for anyone tracking the Venezuelan leader's cancer. Veteran reporter and columnist Nelson Bocaranda broke the stunning news in mid-2011 that Chavez, the country's all-dominant socialist leader, and has garnered more than 670,000 followers via his two Twitter accounts - @NelsonBocaranda and @RunRunesWeb. Bocaranda says he has sources around the region, from Cuba and Colombia to Brazil and the United States, and protects them with personal meetings, constant changes of phone chips and the use of Blackberry messenger chat among other techniques. That prominence has made him a hate figure for Chavez supporters, and he does have serious concerns for his safety. He warned in a column this week that the state would be responsible for anything that happens to him or his family. (Chicago Tribune, 03-08-2012; http://www.chicagotribune.com/news/sns-rt-us-venezuela-chavez-journalistbre8270td-20120308,0,777161.story)

Venezuela readies third diesel fuel shipment to Syria

Venezuela is readying a new shipment of diesel to Damascus as part of a supply agreement signed by both governments in 2010. The Chávez's administration plans to continue meet the agreement despite the troubled political situation in the Middle East country, according to a pro-government legislator.  State-run oil company Petroleos de Venezuela (PDVSA) delivered a cargo of low-sulfur diesel in February aboard the Negra Hipólita tanker, a Venezuelan vessel operated by a PDVSA subsidiary. According to sources, it was the second fuel cargo shipped from the Venezuelan refinery of Puerto La Cruz. (El Universal, 03-06-2012; http://www.eluniversal.com/economia/120306/venezuela-prepares-third-shipment-of-diesel-fuel-to-syria)

US Southern Command to remain vigilant

During a hearing before the Armed Forces Committee in the House of Representatives, Southern Command chief General Douglas Fraser said they were attentive to the “geopolitical turmoil” that may originate in Cuba, Venezuela, Bolivia and Haiti. As to Venezuela, General Fraser pointed out the country faces “uncertainty over President Chávez’ health,” a “persistent economic instability and growing violence levels that generate more demands from the government.” (Veneconomy, 03-07-2012; http://www.veneconomy.com/site/index.asp?ids=44&idt=29683&idc=1)

Caracas to host Sao Paulo Forum

PSUV party International Affairs coordinator Rodrigo Cabezas has announced that the 18th Sao Paulo Forum will be held in Caracas, with 40 countries in attendance from July 4 to July 6 and the formal opening would be on July 5 to celebrate Venezuelan Independence Day. (Veneconomy, 03-06-2012; http://www.veneconomy.com/site/index.asp?ids=44&idt=29681&idc=1)

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.