May 12, 2015

International Trade

 

Cargo that has arrived at Puerto Cabello:

• Over 3,000 tons of milk and beef from Centrolac S.A., Productos Lácteos La Perfecta, Industria Comercial San Martín, Eskimo S.A. and Nova Terra for state agency Corporación de Abastecimiento y Servicios Agrícolas (CASA)
• Over 1,500 tons of personal care items such as diapers, sanitary towels and shampoo from Procter & Gamble for its subsidiary in Venezuela
• 73 tons of auto parts from Ford Motor for its subsidiary in Venezuela

There are 8 vessels offloading at port, one carrying 30,000 tons of yellow corn for CASA. More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Mas-de-3-mil-toneladas-de-leche-y-carne-llegaron-para-la-estatal-Casa-2412480/2015/05/10/510686/)

 

Bilateral Venezuela-Colombia trade is reported down 36% in Q1 2015

Trade between Venezuela and Colombia shrank 36% during the first quarter of 2015, compared to the same period in 2014. According to the Venezuelan-Colombian Economic Integration Chamber (CAVECOL) binational trade was US$ 343 million, compared to US$ 538 million in 2014, a 36%-decline. The report is based on figures provided by Colombia's Administrative Department of Statistics (Dane) and Venezuela's National Statistics Institute (INE). (El Universal, http://www.eluniversal.com/economia/150511/venezuela-colombia-trade-down-in-the-first-quarter)

 

Trade with the US also down 36% in Q1 2015

The US Department of Commerce also reports a 36% drop in bilateral trade with Venezuela during the first quarter of 2015. Imports and exports were US$ 6.259 billion as compared to US$ 9.893 billion the year before. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/intercambio-comercial-con-eeuu-cae-36-en-el-primer.aspx#ixzz3Zp86GLcC; El Mundo; http://www.elmundo.com.ve/noticias/economia/politicas-publicas/intercambio-comercial-con-eeuu-cae-36--en-el-prime.aspx)

 

 

Oil & Energy

 

Venezuela oil price rises for 7th straight week

Venezuela's weekly oil basket price continued to rise for a seventh week in a row as oil prices around the world went up as Saudi Arabia continued fighting against Iranian-backed rebels in neighboring Yemen at the mouth of the Persian Gulf, problems in Libya continued disrupting supply from that country, and U.S. stocks were unexpectedly drawn down.

According to figures released by the Venezuela Ministry of Energy and Petroleum, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending May 8 was US$ 56.74, up US$ 2.53 from the previous week's US$ 54.21. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2386899&CategoryId=10717)

 

 

Commodities

 

Ford to sell Venezuelan cars in greenbacks in dollarization

Ford Motor Co. will sell some of its cars in Venezuela in dollars to alleviate a shortage of greenbacks that has slashed its imports and paralyzed its plant, according to a labor union official. “Car sales will be in dollars,” Gilberto Troya, head of the Ford Motors de Venezuela union, said by telephone from Valencia, Venezuela. He said the company informed the union of the deal with the government April 28. “This could lead to a complete dollarization of the sector.” Under the deal, customers will give dealerships dollars, which will be used to import car parts to be assembled at the Valencia plant, Troya said. Customers could still buy some of the cheaper models such as the Fiesta in bolivars, he said. Dearborn, Michigan-based Ford spokeswoman Susan Krusel confirmed a deal has been reached with the Venezuelan government to restart production in an e-mailed response to questions, without providing further details. (Bloomberg: http://www.bloomberg.com/news/articles/2015-05-08/ford-to-sell-venezuelan-cars-in-greenbacks-in-slow-dollarization)

 

Health Minister confirms state control over medicines

Health Minister Henry Ventura has confirmed government control over the sale of medicines and refuted a report by the President of Venezuela's Medical Federation of 13,000 medical doctors migrating. He claims added state controls will make it possible to compare FOREX provided to importers and the quantity of medicine sold at each pharmacy. The system encourages patients to enroll at pharmacies in order to guarantee access to medicines. He said "anything Douglas Leon Natera (President of the Federation) lacks credibility because he does not go to hospitals", and claimed only 320 doctors have left in six years. (More in Spanish: Infolatam, http://www.infolatam.com/2015/05/11/venezuela-confirma-control-estatal-en-medicinas-y-niega-fuga-13-000-medicos/)

 

 

Economy & Finance

 

Already at a 12 Year Low, Venezuela Central Bank reserves fall another half-a-billion in one day

Venezuela's international reserves fell US$ 507 million dollars on Thursday, pushing toward crashing through the US$ 18 billion level and marking a new low since 2003. With heavy foreign debt burdens, falling crude production, falling crude production, increased domestic usage -- gasoline sells for less than a penny a gallon at the black market dollar rate -- Venezuela's foreign reserves have fallen to US$ 18.211 billion as of May 7. That is the lowest level since 2003. Reserves have now fallen US$ 4.101 billion since the beginning of the year. Not adding confidence to the accuracy of its numbers, on May 4, the Central Bank reported that reserves were US$ 19.799 billion but then erased that number and changed it to a full US$ 1 billion lower at US$ 18.799 a day later with no explanation. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2386906&CategoryId=10717)

 

Venezuela: A worthy investment for China?

As the future of Venezuela's economy continues to spiral downwards into chaos, its leaders have relied heavily upon China's financial support and mercy to stave off complete collapse. Until now, China has extended over US$ 50 billion dollars in loans to Venezuela, permitting the Venezuelan government to repay the loans through guaranteed deliveries of oil. Of the 600,000 barrels of oil the Venezuelan government exports to China daily, over half are exported in order to repay loans to various Chinese banks, not to generate new revenue. However the global drop in oil prices has gravely damaged the Venezuelan economy and thereby the country's ability to repay loans; unfortunately for Venezuela, China has other partnerships to uphold as well. Despite past financial leniency with Venezuela, Beijing feels reluctant to lend large sums of money to economically weak states, especially when dealing with so many foreign projects at once. Most foreign policy experts doubt China will attempt to become economically close with - let alone continue to lend to - Venezuela in the near future. Rather than simply loaning money, Chinese banks may instead provide funds for developmental projects in hopes of generating profit. But most bankers want to increase revenue, not spread a particular ideology. Nevertheless, in the event that China's government decides to increase its support of Maduro's government, such a decision would not end Venezuela's economic troubles. If anything, increased Chinese support may come to hurt Venezuela in the long run, encouraging Maduro and future Venezuelan leaders to look abroad for help rather than implement the painful economic reforms needed to turn the country around. If Venezuela's economy is to truly recover, change must come from within its borders. (The Huffington Post, http://www.huffingtonpost.com/china-hands/venezuela-a-worthy-invest_b_7250192.html)

 

Central Bank stops issuing domestic debt bonds

The Finance Ministry has stopped issuing domestic debt bonds planned for the second quarter this year until further notice. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/bcv-suspende-emision-de-bonos-de-la-deuda-publica-.aspx#ixzz3ZusA1Y3s; El Mundo, http://www.elmundo.com.ve/noticias/economia/mercados/bcv-suspende-emision-de-bonos-de-la-deuda-publica-.aspx)

 

Venezuelan sovereign debt and PDVSA’s bonds were up on Friday, compared to their closing rates the day before. In average, the sovereign bonds posted a 1 point weekly increase. Securities such as the Venz 2018, 7% coupon and the Venz 2025 and 2027 received the most demand, with increases over 0.50 points. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=43813&idc=2)

 

 

Politics and International Affairs

 

Venezuela parliamentary elections to be held in fourth quarter

Venezuela will hold parliamentary elections in the last quarter of this year and the exact date will be announced soon, according to the head of the National Electoral Council (CNE). President Nicolas Maduro is under growing pressure over the 2015 elections, especially after leftist ally and regional heavyweight Brazil on Thursday urged its neighbor to set a date. "We can say that in the last quarter of this year we'll have the elections. We're going to announce it very soon," Tibisay Lucena said in an interview with state television. Luis Emilio Rondon, a CNE official, said on Friday the elections will be held at the end of November or the beginning of December. (Reuters, http://www.reuters.com/article/2015/05/10/us-venezuela-election-idUSKBN0NV0TE20150510; Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=43814&idc=1; El Universal, http://www.eluniversal.com/nacional-y-politica/150511/parliament-vote-to-be-held-in-the-last-quarter-in-venezuela)

 

Venezuela-US dialogue continues through embassies

The government of the United States is holding talks with the Venezuelan Ministry of Foreign Affairs to solve the impasse that started more than two months ago, on March 8, when President Nicolás Maduro ordered a cut in the US embassy staff in Caracas within 15 days. Venezuela started demanding visas for US tourists entering the country. "We are holding talks on this matter (of the US embassy staff cut) with the Venezuelan government through diplomatic means," a spokesperson of the US State Department told El Universal. (El Universal, http://www.eluniversal.com/nacional-y-politica/150511/venezuela-us-dialogue-about-embassies-continues)

 

Venezuela among the countries with the highest rate of violent deaths

Based on rates of violent murders recorded in 2012 in Honduras (90.2 violent deaths per every 100,000 inhabitants) and Venezuela (72.2), these two countries are listed behind Syria where a civil war started in 2011 among the most violent countries in the world. The rate of violent deaths in those two Latin American countries are over 10 times higher than the global average, which is 7.4 murders per every 100,000 people. The United Nations has revealed that one fourth of violent deaths in the world occur in countries that are home to only 4% of world population; among those countries, Syria, Honduras, and Venezuela, which experience the worst situation. (El Universal, http://www.eluniversal.com/nacional-y-politica/150509/venezuela-among-the-countries-with-the-highest-rates-of-violent-deaths)

 

 

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.

 

May 08, 2015

International Trade

 

Cargo that has arrived at Puerto Cabello:

• Over 13,369 tons of beef and chicken from Brazil for state agency Corporación de Abastecimiento y Servicios Agrícolas (CASA)
• Over 2,969 tons of milk powder and margarine from JBS S/A for state agency Corporación Venezolana de Comercio Exterior (CORPOVEX).

There are 6 vessels offloading at port, one carrying 6,000 tons of rice from Guyana for CASA. More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Mas-de-16-mil-toneladas-de-alimentos-llegaron-al-puerto-local-2410150/2015/05/06/510077/)

 

 

Oil & Energy

 

EXXON MOBIL reports oil find in disputed territory

EXXON MOBIL and Guyana have reported that oil has been found in that nation's Stabroek coastal area involved in a territorial dispute with Venezuela. The news could inflame the long standing confrontation. More in Spanish: (El Universal; http://www.eluniversal.com/nacional-y-politica/150508/guyana-descubre-petroleo-en-zona-del-esequibo-venezolano; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/exxon-descubre-petroleo-en-aguas-disputadas-por-ve.aspx; El Nacional; http://www.el-nacional.com/)

 

The OPEC is likely to keep its production output unchanged in its June 5 meeting in Vienna despite renewed efforts of some of its members to cut the amount of crude pumped. On Tuesday, unexpectedly the London Brent rallied to $68.23/bbl., its highest this year, driven by tensions in the Middle East and signs oil surplus will diminish. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=43767&idc=4)

 

Venezuelan investors say they raised Pacific Rubiales stake: A group of Venezuelan investors raised its stake in Pacific Rubiales Energy Corp. at a time Alfa SAB and energy-investment firm Harbour Energy Ltd. prepare a takeover offer for Latin America’s largest non-state oil producer. The group of at least five private Venezuelan businessmen bought more Pacific Rubiales shares, says Orlando Alvarado, one of the investors, without providing further information. Through O’Hara Administration Co. and affiliates, the Venezuelan group was the third largest shareholder as of Wednesday with 11% of the shares. Pacific Rubiales said this week it was in exclusive talks with Mexico’s Alfa and Harbour Energy. The C$6.50 a share bid is 18% more than Tuesday’s closing price in Toronto. The stock jumped 12% to C$6.16 on Wednesday after surging 18% Tuesday when people familiar with the deal told Bloomberg News that Alfa and Harbour had made a bid. (Bloomberg, http://www.bloomberg.com/news/articles/2015-05-07/venezuelan-investors-say-they-raised-pacific-rubiales-stake-i9el04ix)

 

 

Economy & Finance

 

International reserves tumble through US$ 19 billion to new 12 year low

Venezuela's international reserves have fallen below US$ 19 billion for the second time in a week, marking a new low since 2003. With heavy foreign debt burdens, falling crude production, falling crude production, increased domestic usage -- gasoline sells for less than a penny a gallon at the black market dollar rate -- Venezuela's foreign reserves have fallen to US$ 18.794 billion as of May 5. That is the lowest level of foreign reserves for the nation since 2003. The reserves have fallen over US$ 2 billion since the beginning of April. Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2386556&CategoryId=10717)

 

DATANALISIS sees 2015 inflation around 120-140%, scarcity level at 57% , hyperinflation in 2016

A recent presentation by DATANALISIS polling firm director Luis Vicente León shows inflation this year around 120-140% and scarcity levels around 57%. They also predict a 4% GDP drop and a 5% drop in consumption. He said: "Inflation is not being measured by Venezuela's Central Bank but it is still inflation and must be measured". Food inflation - including black market surcharges - is estimated around 200%. More in Spanish: (El Universal, http://www.eluniversal.com/economia/150505/datanalisis-preve-caida-de-5-en-el-consumo-y-de-4-en-el-pib)

 

BOFA reports subsidies here are around 10.4% of GDP, believes pragmatists gain ground

A recent report by Bank of America Merrill Lynch notes that the lack of specific announcements by President Nicolás Maduro on May 1st is a sign that pragmatists have finally "recovered enough strength to block strong radical forces within the regime".  In a report named "The Maduro paradox" the bank reports total cost of subsidies here is around 10.4% of GDP, and indicates the regime uses the private sector to distribute them. More in Spanish:  (El Mundo, http://www.elmundo.com.ve/noticias/economia/banca/subsidios-en-venezuela-alcanzan-10-4--del-pib.aspx#ixzz3ZXVezOQ5; El Nacional, http://www.el-nacional.com/economia/Pragmaticos-fuerza-bloquean-radicales-gobierno_0_623937762.html)

 

Minimum salary deceases 41.3% in reality

The economic "turnaround" of Nicolás Maduro with his announcement of a 30% increase in the minimum salary payable in two installments does nothing but hit the pockets of the Venezuelan population harder than ever before. It turns out that the bad news of an increase in the minimum salary to Bs.7,421.67 (US$ 1,178 at a fictional official rate of Bs.6.30 per dollar and US$ 27 if calculated at a black market rate of about Bs.275 per dollar), is not that it comes with a deficit of Bs.27,703 (78.9%) with respect to the cost of the basic food basket in March of this year. Nor is it that the minimum wage increase between May 2014 and May 2015 was only 58.7% in real terms, well below inflation. In other words, the minimum salary in Venezuela has actually decreased by 41.3%. Opposition leader Henrique Capriles Radonski says that Venezuela now has the lowest minimum wage in the region, after Cuba, (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2386543&CategoryId=10717; and more in Spanish: El Universal, http://www.eluniversal.com/nacional-y-politica/150505/capriles-venezuela-paga-el-salario-minimo-mas-bajo-despues-de-cuba)

 

Venezuela’s economy suffers as import schemes siphon billions

The government’s complex currency system has led to exorbitant schemes by importers, who wildly inflate the value of goods brought into the country to grab American dollars at rock-bottom exchange rates. Sometimes, they fake the shipments altogether and import nothing at all. Then they just pocket the dollars that the government provides, or sell some of the money for a gargantuan profit on the soaring black market here for American currency. Estimates of the import fraud vary, but a former president of Venezuela’s central bank, Edmée Betancourt, has said that up to US$ 20 billion of the US$ 59 billion that went to product imports in 2012 disappeared through fraudulent transactions. One economic consulting firm, ECOANALÍTICA, estimated that about US$ 69.5 billion was stolen through import fraud from 2003 to 2012. It said that 20% of the importing done by private companies had been bogus, while 40% of the imports carried out by government agencies and government-run companies had been fraudulent. An importer can buy United States currency from the government for as little as 6.3 bolívares to the dollar, then turn around and get as many as 280 bolívares to the dollar on the black market. Venezuelans call the churning of bolívares and dollars “the bicycle” because the process can go around and around indefinitely, generating exorbitant profits in both currencies along the way. After paying bribes and other costs, an importer could wind up with about 60% of the dollars originally bought from the government. The scale is mind-boggling, creating distortions in the economy. (The New York Times, http://www.nytimes.com/2015/05/06/world/americas/venezuelas-economy-suffers-as-import-schemes-siphon-billions.html?_r=1)

 

Don’t blame it on the oil

Venezuela has more proven oil reserves than Saudi Arabia, and exports most of the oil that it produces. Between 2004 and mid-2014 Venezuela enjoyed one of the largest revenue windfalls in the world. Now it is experiencing one of the most severe recessions. Venezuela’s economy has essentially collapsed, ravaged by what we might call RIDDS: recession, inflation, dwindling foreign reserves, debt, and shortages. According to the government, Venezuela’s woes are the fault of foreign actors and local capitalists. Saudi Arabia’s refusal to cut oil production, the United States’ reckless fracking, rumor-mongering by Wall Street speculators, hoarding of products by Venezuela’s own “parasitic bourgeoisie” — this is all president Nicolás Maduro talks about these days. Despite Maduro’s claims, Venezuela’s RIDDS is not the result of external shocks, or even the local bourgeoisie’s “economic warfare.” It’s not the result of oil dependence, either. Neither does it have much to do with the economic incompetence of the country’s leaders, conspicuous as that factor may be. The blame must be laid on the nature of the country’s regime, which disincentivized its leaders from competently managing the oil boom, and is now crippling the government’s ability to respond to the downturn. In the early 2000s, Venezuela’s regime under Hugo Chávez became semi-authoritarian and hyper-populist. Such regimes have four inherent characteristics, all of which affect how they manage their economies. First, the ruling party engages in frequent elections, but constantly breaks the rules to ensure acceptable outcomes. Second, the executive branch erodes or eliminates institutions that can check its power. Third, the ruling party spends in a partisan fashion: it grants huge resources, typically unaccountably, to its followers, while denying them to its enemies. Fourth is the regime’s hostility to the private sector. These features help explain the country’s descent into economic hell. (Foreign Policy, http://foreignpolicy.com/2015/05/07/dont-blame-it-on-the-oil-venezuela-caracas-maduro/)

 

U.S. companies can avoid slow torture of Venezuela devaluations by taking one big hit

American companies tired of seeing their earnings badly hurt by Venezuela’s crumbling bolivar currency system can get rid of much of the problem by writing down the value of their Venezuelan businesses to nothing or next to nothing. A big one-time accounting change can isolate Venezuelan operations so that they would no longer flow through to the parent company’s financial results by taking advantage of a rarely used U.S. accounting rule under which subsidiaries' assets are marked to market value and reported on the balance sheet as an investment instead of under core assets and liabilities. The move is very rare but the situation in Venezuela could fall under a narrow exception, allowing deconsolidation when government-imposed uncertainties are so severe that the parent's ability to control the subsidiary is in doubt, said Robert Willens, an independent corporate tax and accounting adviser. "It's not something that's mainstream, but the situation in Venezuela is really a morass," said Jack Ciesielski, president of investment research firm R.G. Associates. (Reuters, http://mobile.reuters.com/article/idUSKBN0LL0A920150217?irpc=932)

 

 

Politics and International Affairs

 

Spain: Vetoing Felipe González could have repercussions for Venezuela

In a new episode in the diplomatic impasse between Spain and Venezuela, the Spanish Foreign Affairs Minister, José Manuel García-Margallo, warned that banning the entry of former Spanish President Felipe González in Venezuela could have international "repercussions" for the Latin American country. The minister remarked that González notified him that he intended to advise the defense team for jailed dissenters Leopoldo López and Caracas' Mayor Antonio Ledezma. For his part, President Nicolás Maduro says political, diplomatic, economic, and energy relations between Spain and Venezuela are at risk. "I do not want to get involved in conflicts or troubles. Whoever messes with Venezuela is messing with Latin America and the Caribbean," he said at a recent event, stressing that Venezuela would reply to all the "lies, affronts, and insults from the Spanish press against Venezuela." (El Universal, http://www.eluniversal.com/nacional-y-politica/150506/spain-vetoing-felipe-gonzalez-could-have-repercussions-for-venezuela; http://www.eluniversal.com/nacional-y-politica/150507/maduro-relations-between-spain-and-venezuela-are-at-risk)

 

IACHR blacklists Venezuela and Cuba in HR special report: The Inter-American Commission on Human Rights (IACHR) once again blacklisted Cuba and Venezuela for several human rights violations, in its annual report. In its 2014 report, the Commission, an autonomous body of the Organization of American States (OAS), kept the two countries in the chapter including the countries where there are "massive, serious, and systematic human rights violations". (El Universal, http://www.eluniversal.com/nacional-y-politica/150507/iachr-blacklists-venezuela-and-cuba-in-hr-special-report)

 

Brazil's Rousseff says her nation seeks solution to "crisis" in Venezuela

In a letter to the wives of jailed Venezuelan opposition leaders Leopoldo López and Antonio Ledezma, signed by her Cabinet chief Álvaro Henrique Baggio, Brazilian President Dilma Rousseff indicates that the "is grateful for their initiatives in Brazil" on behalf of political prisoners here; and adds that Brazil "tirelessly seeks a solution to the crisis" in Venezuela. The full Brazilian Senate has just passed a motion to censure Venezuela for the "arbitrary detention" of opponents, and former Brazilian President José Sarney reportedly expressed his full support for the visiting spouses. Brazilian Vice President Michel Temer, had previously said it is "inadmisible" for any Latin American nation to keep political prisoners. For his part, Venezuela's Public Defender Tarek William Saab, after meeting with Brazilian Foreign Minister Mauro Vieira, claimed he was told Brazil will not meddle in Venezuelan affairs. (El Universal, http://www.eluniversal.com/nacional-y-politica/150507/former-brazilian-president-sarney-supports-mayor-ledezmas-wife; and more in Spanish: Infolatam: http://www.infolatam.com/2015/05/07/dilma-rousseff-contesta-por-carta-a-esposas-de-opositores-de-venezuela/; El Nacional; http://www.el-nacional.com/; El Universal, http://www.eluniversal.com/nacional-y-politica/150508/saab-brasil-no-se-inmiscuira-en-asuntos-de-venezuela)

 

Maduro in Moscow to celebrate Russia's victory over Germany: President Nicolás Maduro travelled to Moscow to take part in the events commemorating the 70th anniversary of Russia's victory over Germany in World War II. (El Universal, http://www.eluniversal.com/nacional-y-politica/150506/maduro-travels-to-moscow-to-celebrate-russias-victory-over-germany)

 

A Venezuela’s military court has sentenced nine Armed Force officials to five to almost nine years in prison for incitement to rebellion. The nine officers include Air Force Captain Laided Salazar. The trial barely lasted two months. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=43777&idc=1; El Universal, http://www.eluniversal.com/nacional-y-politica/150506/military-court-sentences-nine-officials-to-seven-years-of-prison)

 

Colombia to extradite Robert Serra murder suspect to Venezuela: The Colombian president, Juan Manuel Santos, has authorized the extradition of a man wanted in Venezuela over the murder of a Caracas politician, Robert Serra, last October. (BBC, http://www.bbc.com/news/world-latin-america-32619793?utm_source=Sailthru&utm_medium=email&utm_term=%2AMorning%20Brief&utm_campaign=New%20Campaign)

 

Venezuelan arrested in Miami, accused of laundering up to US$ 100 million: Venezuelan-Austrian Martin Lustgarden Acherman, a resident of South Florida, has been accused along with Salomon Bendayan and Indian-Venezuelan Rama Krishna Kuchibhotla (who pled guilty to money laundering in 2013) of acting as alleged financiers to cover up illegal transfers of money from drug trafficking operations. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=43776&idc=2)

 

 

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.

May 05, 2015

International Trade

 

Cargo that has arrived at Puerto Cabello:

• Over 2,949 tons of resin for manufacturing packing, in 131 containers from AMCOR in the US for PEPSI COLA.
• Over 1,852 tons of metal doors and sanitary equipment for housing from China for CORPOVEX.
• Over 668 tons of steel formwork from China for state company BARIVEN
• Over 261 tons of corn meal for animal consumption from Delong for Avícola La Guásima
• Over 250 tons of corn seed in 13 vans for Mexico for state agency CORPOVEX.
• Over 209 tons of housing construction material from Wodson Int. for state agency Servicio Fondo Nacional del Poder Popular (SAFONAPP)
• Over 62 tons of sanitary napkins in 7 containers from Procter & Gamble in Mexico for their local affiliate.

There are 14 vessels offloading at port, seven of them bearing bulk cargo and five carrying containers. More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Llegaron-mas-de-200-toneladas-de-materiales-de-construccion-a-Puerto-Cabello/2015/05/03/509448/; http://www.notitarde.com/La-Costa/Mas-de-dos-mil-toneladas-de-resinas-para-envases-llegaron-al-puerto-local-2407421/2015/05/04/509640/)

 

 

Oil & Energy

 

Venezuelan oil basket rises to US$ 55 per barrel

The Venezuelan oil basket rose to USD 55 per barrel last week, a US$ 2.39 increase from the previous week, when it was US$ 52.61, according to Asdrubal Chavez, Minister of Petroleum and Mining. The Ministry of Petroleum reports crude oil price has averaged US$ 45.53 per barrel to date in 2015. (El Universal, http://www.eluniversal.com/economia/150504/venezuelan-oil-basket-climbs-to-usd-55-per-barrel)

 

PDVSA reports paying interest to bond holders

State run oil holding Petróleos de Venezuela, S.A. (PDVSA) notified all the holders of Pdvsa bonds maturing in 2017 that interest for the six-month term ending May 2015 would be paid on Monday. (El Universal, http://www.eluniversal.com/economia/150504/pdvsa-reports-payment-of-interest-to-bond-holders)

 

 

Commodities

 

Ford Venezuela will halt production from May 4 to May 18, due to the lack of materials and there are no guarantees it will resume activities again. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=43732&idc=3; and more in Spanish: (Diario 2001, http://www.2001.com.ve/en-la-agenda/96393/ford-motors-paralizado-por-segunda-vez-en-el-ano.html; El Nacional; http://www.el-nacional.com/)

 

 

Economy & Finance

 

Maduro raises salaries, says nothing about announced "economic shakeup"

President Nicolas Maduro has decreed a 30% increase in minimum wages across the board for Venezuelans, but failed to speak of the "economic shakeup" he had vowed to announce on May 1st. He called upon the working class to further organize to "undertake managing the nation's economy, build socialism and defeat bigwigs in economic war". Opposition leader Henrique Capriles retorted that this increase "does not solve the issue of the highest inflation on earth.".  FEDECAMARAS President Jorge Roig said that recurring minimum wage increases are proof that the government has been unable to control inflation and warned that many small and medium businesses will be unable to pass on the cost increase to consumers. More in Spanish: (Infolatam, http://www.infolatam.com/2015/05/04/maduro-decreta-aumento-del-salario-pero-posterga-revolcon-economico/; and El Mundo, http://www.elmundo.com.ve/noticias/economia/laboral/capriles--ese-aumento-de-salario-no-resuelve-la-in.aspx#ixzz3ZA62sIr3;  http://www.elmundo.com.ve/noticias/economia/gremios/fedecamaras--muchas-empresas-no-van-a-poder-pagar.aspx#ixzz3ZFsRUwRF; El Universal, http://www.eluniversal.com/economia/150505/opinan-que-alza-de-salarios-no-ataca-problema-de-fondo)

 

Venezuela's Benacerraf family buys Espirito Santo bank in the US

Venezuela's Benacerraf banking family has agreed to acquire the Miami arm of collapsed Portuguese lender Banco Espirito Santo for US$ 10 million. "The expertise of well-established banking families is a superb catalyst for our growth and rededication to serving our customers," a spokesperson for the Miami-based subsidiary, known as Espirito Santo Bank, said Friday. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2385903&CategoryId=10717)

 

Gold swap is considered logical

Francisco Rodríguez, director of the Bank of America Meryl Lynch, believes that swapping a portion of Venezuelan gold is a perfectly logical move, particularly in the context of a drop in terms of exchange at 50% or more. "There should be a process of adjustment to this new reality, but this process should be gradual," he said.

Rodríguez recommended that Venezuela use its savings and indebtedness capacity in the transition, together with a cut of imports, which fell 18% in January 2015. "This had to happen because revenues lowered and expenses should be curtailed. Such a drop of exchange should be at 20%, it does not have to be at 50%, even if prices have fallen 50%. It makes sense for the country to use its savings." (El Universal, http://www.eluniversal.com/economia/150504/gold-swap-regarded-as-logical)

 

 

Politics and International Affairs

 

Opposition parties agree on consensus candidates in over 80% of parliamentary constituencies

The groups and political parties that make up the opposition Democratic Unity Conference have by consensus agreed to nominate a single unity candidate for the upcoming elections in over 80% of Venezuela's parliamentary constituencies. In constituencies where there is no consensus candidates will be selected through primaries. More in Spanish: (El Nacional; http://www.el-nacional.com/)

 

López and Ledezma wives in Brazil to denounce HR violations

Lilian Tintori, wife of detained dissenter Leopoldo López, has landed in Brazil, along with the wife of Caracas Metropolitan Mayor Antonio Ledezma, to denounce irregularities committed by the Venezuelan regime against political prisoners, and human right violations against all Venezuelans. "We are in Brazil to denounce once again the regime's abuses: over 80 political prisoners, including opposition leaders, Venezuelan students, who are unfairly behind the bars by Nicolás Maduro for dissenting; kidnapped public powers, inflation, shortages, impunity. Venezuela is on the brink of a humanitarian crisis. Human rights are not respected, and the anxiety about finding food, medicines, and security on the streets, oppresses Venezuelan families each day," Tintori noted as she arrived in the airport. (El Universal, http://www.eluniversal.com/nacional-y-politica/150504/tintori-and-mitzy-de-ledezma-visit-brazil-to-denounce-hr-violations)

 

The five Cuban agents, accused of spying in the United States, will be welcomed as “heroes” in Venezuela by Nicolás Maduro’s regime. They will arrive to Caracas to pay tribute to Hugo Chávez and visit “places of historic and socio-economic interest” in Aragua, Barinas, Carabobo, Zulia, Anzoátegui and the Capital District, according to the Cuban Embassy in Venezuela. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=43737&idc=1; El Universal, http://www.eluniversal.com/nacional-y-politica/150504/five-cuban-spies-honored-with-the-keys-to-the-city-of-caracas)

 

Saab: Club de Madrid is an illegal cartel to discredit Venezuela

Venezuelan Ombudsman Tarek William Saab described Club de Madrid, a leadership alliance comprising 90 former heads of State, as an "illegal cartel" seeking to "discredit the country, to harm the country with clear objectives."

Saab said that Club de Madrid was somehow promoted by the President of the United States, Barack Obama. (El Universal, http://www.eluniversal.com/nacional-y-politica/150504/saab-club-de-madrid-is-an-illegal-cartel-to-discredit-venezuela)

 

Samper advocates normalization of Venezuela-Spain relations

The Secretary General of the Union of South American Nations (UNASUR), Ernesto Samper, has advocated normalization of diplomatic relations between Venezuela and Spain, based on "respect for the institutions" of Venezuela. Relations between Spain and Venezuela have had ups and downs over the last years, and tensions rose again in April as both governments recalled their ambassadors for consultations after Venezuelan President Nicolás Maduro lambasted the Spanish government. Samper, a former president of Colombia, rejected foreign meddling in Venezuela's affairs and criticized the stance of Spanish ex-president Felipe González on Venezuela's internal situation. (El Universal, http://www.eluniversal.com/nacional-y-politica/150504/samper-advocates-normalization-of-venezuela-spain-relations)

 

Preliminary investigation into Brazil ex-President Lula over construction deals in Venezuela

Brazilian prosecutors have opened a preliminary investigation into former President Luiz Inacio Lula da Silva over alleged influence peddling. The federal prosecutors' office has confirmed reports that Lula is being questioned over claims that he helped leading construction firm ODEBRECHT win contracts abroad between 2011 and 2014. They now have 90 days to decide whether to launch a full inquiry. Lula and ODEBRECHT have denied any wrongdoing. Brazil's EPOCA magazine reported on Friday that Lula had allegedly persuaded foreign leaders to give inflated contracts to ODEBRECHT. It also claimed that the former president had helped the company obtain low-interest loans from Brazilian state development bank BNDES. According to EPOCA, ODEBRECHT paid Lula to travel to countries including Cuba, Ghana, Venezuela and the Dominican Republic to help secure the deals. Paulo Okamotto, head of the Lula Institute, said in a statement that the former leader rejected all the allegations. ODEBRECHT has said that its relationship with the former president was "institutional" and that Lula had never acted in a lobbying role for the firm. (BBC News, http://www.bbc.com/news/world-latin-america-32587905)

 

Venezuela sends technical and humanitarian mission to Nepal

The government of Venezuela has sent a technical and humanitarian mission to Nepal to conduct an on-site assessment of the most urgent needs after the 7.8 Richter scale earthquakes that hit the country recently.

The mission includes a medical team, two forensic engineers, and tree unit technicians, who will assess the needs of the people of Nepal for 20 days, so the Venezuelan State can prepare a shipment of medical supplies and essential products, the Ministry of Information explained in a communiqué, according to Efe. (El Universal, http://www.eluniversal.com/nacional-y-politica/150504/venezuela-sends-technical-and-humanitarian-mission-to-nepal)

 

 

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.