International
Trade
Cargo that has arrived at Puerto Cabello:
- Over 2200 tons of powdered whole milk from SANCOR
Argentina to the CASA government agency.
- Over 1,000 tons of scotch whisky, in 56
containers from Diageo in the United Kingdom to the Venezuelan Foreign
Trade Corporation (CORPOVEX)
- Over 612 tons of margarine from Bunge Brazil, for
CASA.
- Over 184 tons of milk in 10 containers from
NESTLE Argentina to NESTLE Venezuela.
More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Mas-de-mil-toneladas-de-whisky-llegaron-al-puerto-local-2285802/2014/11/17/393869/)
Oil &
Energy
Venezuela oil price tumbles to 4 year low
Venezuela's Ministry of
Energy and Petroleum reports that the average price of Venezuelan crude sold by
Petroleos de Venezuela S.A. (PDVSA) during the week ending November 14 fell to
its lowest price since 2010. According to
figures released by the Ministry, the average price of Venezuelan crude sold by
Petroleos de Venezuela S.A. (PDVSA) during the week ending November 15 was US$ 70.83,
down US$ 1.97 from the previous week's US$ 72.80. (Latin American Herald
Tribune, http://www.laht.com/article.asp?ArticleId=2360977&CategoryId=10717;
Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41887&idc=4;
El Universal, http://www.eluniversal.com/economia/141114/venezuelan-oil-basket-down-to-usd-7083-per-barrel)
Iran, Venezuela urge oil price support ahead of OPEC
meeting
OPEC hawks Iran and Venezuela have called on fellow
crude producers to shore up prices that have plunged more than 30% to
four-years low ahead of an OPEC meeting later this month. Oil prices have
fallen to below US$ 79 on abundant and weak demand from US$ 115 a barrel in
June. Skepticism that OPEC will cut supply when it meets on Nov. 27 have also
weighed on the prices. So far, only Kuwait and Iran have said a reduction is
unlikely, while a Libyan OPEC official, Venezuela and Ecuador have called for
OPEC to cut output. (Reuters, http://www.reuters.com/article/2014/11/15/us-iran-venezuela-oil-idUSKCN0IZ0N420141115)
OPEC to
'increase coordination' in face of oil price fall, says Ramírez
Foreign Minister Rafael Ramirez said the Organization
of the Petroleum Exporting Countries will increase coordination in the face of
the fall in oil prices, without elaborating. The oil market is waiting to see
whether OPEC will agree a cut in production at its Nov. 27 meeting to stem the
roughly 30% drops in oil prices since June. "We will be united in terms of putting forth a common policy,"
said Ramirez, who until September was both oil minister and head of state oil
company PDVSA. (Reuters,
http://www.reuters.com/article/2014/11/17/venezuela-opec-idUSL2N0T71SC20141117; El
Universal, http://www.eluniversal.com/economia/141117/ramirez-the-fall-in-oil-prices-also-has-political-considerations)
Foreign Minister Ramírez to discuss oil decline with
Russia, says US$ 100 per barrel is desirable price
Foreign Minister Rafael Ramírez will arrive on
Saturday in Moscow in the context of a tour across member countries of the
Organization of Petroleum Exporting Countries (OPEC) that has taken him to
Algeria and Qatar.
Ramírez will meet with the President of Russian oil giant ROSNEFT, Igor Sechin. "A hundred dollars per barrel is the desirable price for Venezuela," and it stood at US$ 115 in June, said Ramírez during his visit in Iran on Saturday. (El Universal, http://www.eluniversal.com/economia/141114/venezuelan-fm-ramirez-to-discuss-in-russia-oil-decline)
Ramírez will meet with the President of Russian oil giant ROSNEFT, Igor Sechin. "A hundred dollars per barrel is the desirable price for Venezuela," and it stood at US$ 115 in June, said Ramírez during his visit in Iran on Saturday. (El Universal, http://www.eluniversal.com/economia/141114/venezuelan-fm-ramirez-to-discuss-in-russia-oil-decline)
PDVSA signs oil supply contract with Russia's ROSNEFT
Russian oil giant ROSNEFT says it has signed a new oil
and byproducts supply agreement with Venezuelan state-run oil company Petróleos
de Venezuela (PDVSA). Pursuant to the agreement, PDVSA would provide more than
1.6 million tons of oil and nine million tons of byproducts to ROSNEFT for five
years. (El
Universal, http://www.eluniversal.com/economia/141117/venezuelas-pdvsa-signs-oil-supply-contract-with-russias-rosneft)
Paraguaná refining center restarts operations
State-run oil company Petróleos de Venezuela (PDVSA)
issued a press release reporting that the main crude oil processing units, and
production of blends for gasoline and diesel in the Paraguaná Refining Center
(CRP), Falcón, northwest Venezuela, are fully operational, following the power
failures registered over the last few days. (El Universal, http://www.eluniversal.com/economia/141114/paraguana-refining-center-restarts-operations)
Commodities
Government expects 18% increase in food production in
2015
José Luis Berroterán, Minister for Agriculture and
Land, expects Venezuela to produce 25 million tons of food from agriculture
next year, an increase of 18% over 2014. He adds that this will depend on
climate conditions and particularly "not
having a drought like this year".
More in Spanish: (Infolatam, http://www.infolatam.com/2014/11/17/venezuela-preve-aumentar-en-un-18-su-produccion-de-alimentos-en-2015/)
Economy
& Finance
Venezuela faces ‘revised
view’ from Fitch as oil prices sink
Venezuela faces a
“revised view” from Fitch Ratings in
coming months on concern President Nicolas Maduro isn’t moving fast enough to
bolster the nation’s finances amid an oil plunge. Fitch lowered Venezuela’s
rating in March to B, or five steps below investment grade, with a negative
outlook as accelerating inflation and slowing growth spurred street protests.
At the time, oil prices were high and the government could still find funding
at low levels, said Erich Arispe,
director of sovereign ratings for Latin America at Fitch. (Bloomberg, http://www.bloomberg.com/news/2014-11-14/venezuela-faces-revised-view-from-fitch-as-crude-oil-prices-sink.html)
Business warns that inflation will reach 120% unless
steps are taken
Jorge Roig, President of Venezuela's main business
association, FEDECÁMARAS, warns that 2015 inflation could reach 120% if the
government does not take steps including fiscal adjustments. Roig was
pessimistic about the economic forecast for next year: "I am amazed that anyone thinks 2015 can be
good", he said, and called for "economic rationality". Roig says this was the year for
economic decisions since there have been special powers in the hands of
President Maduro. "Are you going to
take them next year, with a political cost, facing elections?", he
said addressing Maduro. More in Spanish:
(Infolatam, http://www.infolatam.com/2014/11/18/patronal-venezolana-advierte-que-si-toman-medidas-inflacion-llegara-120)
Maduro approves proposal to adjust gasoline prices
President Nicolás Maduro has
"accepted" a proposal by a
pro-government workers congress to increase gasoline prices, but warns his
government is in no rush to make the adjustment. More in Spanish: (El Mundo,
http://www.elmundo.com.ve/noticias/petroleo/industria/maduro-da-luz-verde-para--sincerar--precio-de-la-g.aspx#ixzz3JPkSWV9f;
El Universal, http://www.eluniversal.com/economia/141118/maduro-acepta-la-propuesta-de-sincerar-precio-de-la-gasolina;
2001, http://www.2001.com.ve/en-la-agenda/maduro-firmo-propuesta-para-ajuste-del-precio-de-la-gasolina.html;
Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/maduro-dijo-que-sinceraran-precio-de-la-gasolina-n.aspx)
PDVSA has announced it is now paying out interest on
bond maturity, on
PETROBONOS due 2021, 2035, 2026 y 2024, for the
semester ending November 2014. More in
Spanish: (2001,
http://www.2001.com.ve/en-la-agenda/pdvsa-anuncio-el-pago-por-vencimiento-de-los-intereses-de-bonos.html;
PDVSA, http://www.pdvsa.com/;
AVN; http://www.avn.info.ve/contenido/pdvsa-canceló-intereses-tenedores-bonos-2021-2035-2026-y-2024;
El Mundo, http://www.elmundo.com.ve/noticias/petroleo/pdvsa/pdvsa-cancelo-intereses-a-tenedores-de-sus-bonos.aspx;
Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/pdvsa-cancelo-intereses-a-tenedores-de-sus-bonos.aspx)
Underemployment stands at 40.5%
The employment rate in the informal sector of economy here
has grown this year than in the formal sector, according to the September labor
force report prepared by the National Statistics Institute (INE). According to
the figures, in September, 13,924,988 million people were employed in
Venezuela, with 7,934,988 people working in the formal sector versus 5,384,599
underemployed. The share of the formal sector in the labor market dropped from
60.7% to 59.5% in a year time since September 2013. For its part, the informal
sector grew from 39.3% to 40.5%, according to the INE. (El
Universal, http://www.eluniversal.com/economia/141117/underemployment-stands-at-405-in-venezuela)
Politics and
International Affairs
SPECIAL REPORT: Falling oil prices put Nicolás Maduro
in a vice
Venezuelan oil, the lifeblood of the leftist
revolution entrusted to Maduro by the late Hugo Chávez, was worth US$ 97 a
barrel then. Now it’s middling around US$ 70, and with every dollar it dips,
Venezuela’s export-dependent, popularity-challenged government loses US$ 700
million a year. With the money pot shrinking, Maduro’s approval rating has
slumped to 30%, according to recent surveys, down from 55% in April 2013. The
supermarket scarcities and unchecked crime that fueled the protests earlier
this year are as bad as ever. Loath to adopt austerity measures that would hit
his softening support base, Maduro has been borrowing money from Wall Street at
usurious rates, with the country’s plunging benchmark bonds hitting a six-year
low last week. All of this has left friends and enemies alike wondering how
long the government can go on until something snaps, especially if oil prices
slip further. Venezuela’s desperate attempts to get fellow OPEC states to cut
production have failed to sway the mighty Saudis. The cliff seems closer than
ever. “It’s as if Maduro is playing one
of those zombie video games,” said analyst Luis Vicente Leon, director of
the leading polling firm DATANALISIS. “As
the zombies come at him, he shoots one here, another there, but more and more
keep arriving until they’re on top of him.” Stalking Maduro are Venezuela’s
long-festering core problems — collapsing productivity and Chávez-era currency
controls that have pushed inflation to 63%, one of the world’s highest rates. New
lines of credit from the world’s other big lender, Beijing, aren’t likely, with
China growing frustrated with Venezuelan mismanagement, said Francisco Monaldi,
a Venezuelan economist who is a visiting professor at Harvard’s Kennedy School
of Government. Maduro can still keep fiscal calamity at bay, analysts say, but
he’s shown little appetite for the unpalatable political moves that it will
require. His government could sell off valuable assets, particularly the U.S.
gasoline retailer CITGO and its affiliated network of refineries and pipelines.
He could also further cut subsidized oil shipments to key allies such as Cuba
and Nicaragua. The most obvious measures for Maduro to take, and those likely
to have the most meaningful fiscal impact, would fall hardest on the poor
Venezuelans who revered Chávez but have grown skeptical of his understudy. Maduro
has refused to devalue Venezuela’s currency, the bolivar, instead setting up a
complex exchange system with three separate rates for U.S. dollars. The base
rate is 6.3 to the dollar. The tourist rate is 12. Then there’s a third rate
meant for importers and other businesses that trades at 50 bolivars to the
dollar. But on the black market, where most of the money moves, a dollar is now
worth 120 bolivars, double its value from earlier this year. When Venezuela’s
finance minister said last week that the government had no plans to devalue the
bolivar, the currency dropped 20% almost overnight. There’s no painless fix.
Adjusting Venezuela’s currency controls to bring the bolivar in line with the
black market value of the U.S. dollar could be politically disastrous for
Maduro, since it would further slash the wages of Venezuelans who don’t have
their savings stockpiled in U.S. bank notes. A more palatable move may be a
long-deferred hike of the world’s lowest gas prices — equivalent to less than a
penny per gallon. The giveaway costs the government approximately US$ 7 billion
a year, and amounts to a huge subsidy for the wealthier Venezuelans who favor
gas-gulping SUVs. Yet Maduro has shown little inclination to ask his supporters
for sacrifices. “With Chávez they were willing to do it because they thought
the future would be better,” said Leon, the DATANALISIS president. “With Maduro, it’s not clear that’s the case.”
Instead, Maduro is channeling Santa. He announced a new “Happy Holidays” campaign this month, ordering retailers to sell
Barbie dolls at huge discounts and set up a military-run appliance sale where
shoppers line up for 80 percent markdowns on microwaves, computer tablets and
other big-ticket items. Such fire sales have become a magnet for “re-sellers”
who can easily flip the goods on the black market. The government’s fiscal
profligacy is compounded by a kind of paralysis at the top levels, where
internal battles are said to rage between those urging greater discipline and
more radical Chávez followers who want the government and the military to take
over more of the economy. “The top
leaders of the government are more like a collective,” said Dimitris
Pantoulas, a Caracas-based political analyst who is close to current and former
government insiders.“It’s not like before
when it was only Chávez.” At the top with Maduro is National Assembly
President Diosdado Cabello, a powerful figure with closer ties to the military.
With a Jacobean touch, the dour Cabello and other top government figures this
month have taken to the airwaves to denounce anti-Chávez “infiltrators” within the ruling United Socialist party. “The enemy who most harms us is the enemy
within our ranks,” said Francisco Ameliach, a high-ranking socialist party
member and state governor. He tweeted a hotline number and a Gmail address for
reporting any traitorous activity. (The Washington Post, http://www.washingtonpost.com/world/falling-oil-prices-put-venezuelas-nicolas-maduro-in-a-vice/2014/11/16/5c157066-6602-11e4-ab86-46000e1d0035_story.html)
Occupied businesses to be placed under one authority,
militias in companies to be expanded
President Nicolás Maduro has
approved a proposal by a pro-government workers congress, to put all occupied
and nationalized companies under a single system directed by economist Juan
Arias. He also approved the creation of a "workers militia" as a part
of the Bolivarian Militia, and orders an expansion of militias in companies. More
in Spanish:
(El Mundo, http://www.elmundo.com.ve/noticias/economia/laboral/claves---las-propuestas-aprobadas-por-maduro-en-el.aspx#ixzz3JPiDmicY, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/gobierno-anuncia-medidas-economicas-de-cara-al-210.aspx, http://www.elmundo.com.ve/noticias/economia/banca/gobierno-crea-el-banco-bicentenario-del-pueblo.aspx; AVN; http://www.avn.info.ve/contenido/crean-banco-bicentenario-clase-obrera-mujer-y-comunas)
(El Mundo, http://www.elmundo.com.ve/noticias/economia/laboral/claves---las-propuestas-aprobadas-por-maduro-en-el.aspx#ixzz3JPiDmicY, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/gobierno-anuncia-medidas-economicas-de-cara-al-210.aspx, http://www.elmundo.com.ve/noticias/economia/banca/gobierno-crea-el-banco-bicentenario-del-pueblo.aspx; AVN; http://www.avn.info.ve/contenido/crean-banco-bicentenario-clase-obrera-mujer-y-comunas)
Spain's PODEMOS leader Pablo Iglesias says López case
may harm the party
Pablo Iglesias, leader of Spanish political party PODEMOS,
believes that the request for his help made by Lilian Tintori, wife of imprisoned
Venezuelan opposition leader Leopoldo López, could be a political maneuver to
harm the new Spanish leftist political organization. "I believe the aim of that request is to harm PODEMOS,"
Iglesias said, and also commented that Tintori could have been manipulated, DPA
reported. (El
Universal, http://www.eluniversal.com/nacional-y-politica/141117/podemos-leader-pablo-iglesias-lopezs-case-may-harm-the-party)
Venezuelan migration is constrained in MERCOSUR
The Venezuelan government has not endorsed the "Agreement on residence for nationals of the
Member States of the Common Market of the South – Mercosur, Bolivia and Chile."
As a result, Venezuelans cannot benefit from the special migration regulations within
the regional bloc, which provide for provisional residence of up to two years,
or permanent residence, upon presentment of the passport and a confirmation of
the lack of criminal records. (El Universal, http://www.eluniversal.com/nacional-y-politica/141115/venezuelan-migration-is-constrained-in-mercosur)
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.
