Venezuelan Daily Brief

Published in association with The DVA Group and The Selinger Group, the Venezuelan Daily Brief provides bi-weekly summaries of key news items affecting bulk commodities and the general business environment in Venezuela.

Wednesday, July 23, 2014

July 22, 2014

International Trade

Incoming cargo at Puerto Cabello:
  • 26, 698 tons of food have arrived for state agency CASA, including powdered whole milk, tuna, semola noodles, soy oil, green peas, margarine, chicken and frozen beef.
  • 753 of air  conditioning units in 50 vans from Lilly Associates Intl to their local affiliate
  • 144 tons of tires from Ecuador for Logística Multimodal (Logimodal)
  • 626 tons of whole and skim milk from Ecuador for Lechera Andina. 

CENCOEX allocating FOREX to priority areas
FOREX allocation for pending import debt has improved for priority pharmaceutical and food areas over the past weeks. Food industry sources indicate payments are around 30% of the total overdue debt, and even higher in some cases. POLAR Foods, the nation's largest food producer, reports a slight lowering of outstanding FOREX obligations. More in Spanish: (El Universal, http://www.eluniversal.com/economia/140722/cencoex-liquida-parte-de-la-deuda-a-sectores-prioritarios)


Logistics & Transport

LATAM Airlines says agreed deal with Venezuela to repatriate funds
LATAM Airlines, Latin America's biggest airline, has agreed to a deal with Venezuela for the repatriation of funds owed to the company. The total debt of around U$D 148 million for fiscal 2013 would be repaid according to a payment plan proposed by the government and accepted by LATAM. A number of airlines have reduced flights to Venezuela over a dispute over ticket sales revenue. (Reuters, http://www.reuters.com/article/2014/07/20/venezuela-airlines-latam-idUSL6N0PV15K20140720; Bloomberg, http://www.bloomberg.com/news/2014-07-20/latam-airlines-accepts-payment-offer-from-venezuelan-government.html; El Universal, http://www.eluniversal.com/economia/140721/latam-airlines-group-accepts-venezuelas-payment-plan)

International airlines cut 4,528 seats from and to Venezuela
A group of international airlines flying to different destinations has decided to lower flight frequency and seat supply as of August, the very month’s children are on their school break. The group includes AEROLÍNEAS ARGENTINAS, Caracas-Buenos Aires; Spain's AIR EUROPA, to Madrid; Panama's COPA Airlines, which diversifies connections from Caracas, Valencia, and Maracaibo to Panama and from Caracas to Bogotá; DELTA Air Lines, in flights to Atlanta; and Germany's LUFTANSA, which offers connections to several European countries. The companies' move follows after the adoption of cuts by other airlines. (El Universal, http://www.eluniversal.com/economia/140721/international-airlines-cut-4528-seats-from-and-to-venezuela)

CONVIASA provides aircrafts for passengers stranded in Madrid
State-run airline CONVIASA says that it has taken action to assist passengers in Madrid and Buenos Aires left stranded after the airline experienced operating difficulties. (El Universal, http://www.eluniversal.com/economia/140721/conviasa-provides-aircrafts-for-passengers-stranded-in-madrid)


Oil & Energy

Venezuela plans to ship one million barrels a day to China in 2016, according to PDVSA CEO, Mining and Oil Minister and Vice President for the Economic Area Rafael Ramírez. He said 524,000 bpd is currently dispatched to China. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=40294&idc=4)

China and Venezuela agreed to exploit gold in the Sifontes Sur area says Mining and Oil Minister Rafael Ramírez. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=40289&idc=3)


Commodities

Venezuela and China going in to joint ventures to manufacture chemicals for agriculture, cement Joint ventures are also planned in cement production and building new housing. More in Spanish: (AVN; http://www.avn.info.ve/contenido/venezuela-y-china-acuerdan-creaci%C3%B3n-empresa-mixta-para-producir-agroqu%C3%ADmicos; http://www.avn.info.ve/contenido/venezuela-y-china-instalar%C3%A1n-planta-cemento-para-producir-12-millones-toneladas-al-a%C3%B1o)


Economy & Finance

China to provide Venezuela with an additional U$D 4 billion in exchange for oil
China will provide Venezuela with a new U$D 4 billion credit line, with funds to be repaid through oil shipments. The deal was inked during a 24-hour visit to Venezuela by Chinese President Xi Jinping, and will go into the Joint Chinese-Venezuela Fund, which focuses on infrastructure and economic development here. President Nicolas Maduro says the Venezuelan government will also put U$D 1 billion into the fund, but officials later said that amount was in fact U$D 2 billion. (Reuters, http://www.reuters.com/article/2014/07/21/venezuela-china-idUSL2N0PW1BE20140721; More in Spanish: CNN, http://cnnespanol.cnn.com/2014/07/21/cual-es-el-efecto-de-los-prestamos-de-china-a-venezuela-y-otros-paises-de-la-region/?iref=allsearch)

Maduro claims Chinese financing does not create a heavy debt burden

Venezuela´s debt to China is higher than international reserves
Venezuela and China have put U$D 56 billion into several joint funds, U$D 45 billion of which are f China Development Bank financing for 245 projects in industry, oil, mining, housing, and air, among others. U$D 13.7 billion in the so-called Great Volume Fund remain outstanding. The Binational Fund was originally U$D 20 billion and has not been renewed, Venezuela has repaid U$D 8 billion through oil shipments and still owes China U$D 12 billion from that fund. ECOANALÍTICA says both debts add up to U$D 25.7 billion, and total Venezuelan international reserves are around U$D 20.7 billion, according to this nation's Central Bank. More in Spanish: (El Nacional; http://www.el-nacional.com/)

China Development Bank opens branch in Venezuela
As part of the meetings leading up to the arrival today of China President Xi Jinping, the China Development Bank opened an office in Caracas – only its second office in Latin America. "Our office in Caracas is the second financial institution we have established in Latin America after Rio de Janeiro," says Hu Huaibang, President of the China Development Bank. Trade between the two nations exceeded U$D 20 billion in 2012 and China is the second largest buyer of Venezuelan oil after the U.S.A. Venezuela has signed loans-for-oil deals valued at more than U$D 50 billion, making it the biggest recipient of Chinese financing in the region. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2344615&CategoryId=10717)

Venezuela, China signed 38 bilateral cooperation agreements
Venezuela and China signed 38 bilateral cooperation agreements during the visit of Chinese President Xi Jinping in Caracas. The agreements are related to exploitation of oil blocks; supplementary binational projects; agricultural exchange and cooperation, promotion of industrial and technological investments, as well as cultural and social exchanges. Since the beginning of the Bolivarian Revolution in 1999, Venezuela and China have strengthened their trade relations gradually by evolving from 20 agreements between 1974 and 1998, to 450 from 1999 to date, says National Assembly President, Captain Diosdado Cabello. (El Universal, http://www.eluniversal.com/economia/140721/venezuela-china-sign-38-bilateral-cooperation-agreements; AVN, http://www.avn.info.ve/contenido/jinping-proposes-upgrade-relations-venezuela-strategic-partnership; http://www.avn.info.ve/contenido/over-450-agreements-have-been-signed-china%E2%80%93venezuela-1999)

China-Venezuela economic relations at a glance
- U$D 41 billion in loans from the China Fund, plus U$D 4 billion just signed for.
- 524.000 BPD are being sent to China.
- U$D 254 million in Venezuelan non-oil exports sent to China in 2013.
- U$D 7.6 billion in imports from China during 2013.
- Venezuela has invested U$D 580 million to build and launch 2 satellites with China.
- China has 5 joint ventures with Petróleos de Venezuela (PDVSA) for exploring and extracting crude oil here. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/claves---las-cifras-de-la-relacion-venezuela---chi.aspx#ixzz386KWopXs)

Deutsche Bank doubts the economy will improve
A report by Deutsche Bank indicates potential conflicts within "chavista" ranks create doubt about the sustainability of policies, and warns that "the complexity of the current economic situation also impacts any expectation of a quick improvement in performance". It also indicates that risk perception has improved slightly, based on the behavior of sovereign bonds. More in Spanish: (El Nacional; http://www.el-nacional.com/)


Politics

Opposition mayor murdered in his home
Enrique Franceschi, mayor of Río Caribe and the only opposition mayor in Sucre state in Eastern Venezuela, was found stabbed to death at his home. Opposition leader and Miranda State governor Henrique Capriles Radonski made the announcement. César Rincones, a legislator in the National Assembly for Sucre state, said Franceschi's body was found approximately at 5:00 a.m. by a maintenance worker. The mayor lived there together with his wife, grandmother and five-year-old son. All of them were in Caracas at the time of the killing. (El Universal, http://www.eluniversal.com/nacional-y-politica/140721/venezuelan-opposition-major-is-killed; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2344705&CategoryId=10717; More in Spanish: CNN, http://cnnespanol.cnn.com/2014/07/20/asesinan-al-alcalde-de-rio-caribe-venezuela/?iref=allsearch)

Amid low voter turnout in government party voting Maduro seeks a single vision
The pro-government United Socialist Party has elected 537 delegates to its upcoming 3rd Congress and - despite claims of 7.6 million members - a very low turnout has been reported, some as low as 12%. A prominent "chavista" intellectual, Nicmer Evans accused the party of "lying" about its number of members enrolled, and National Assembly President and Party vice president Diosdado Cabello reported that it would be very difficult to count the votes, but announced the elected delegates. The party has been racked with dissent after former Chavez ministers published letters highly critical of Maduro and he retorted there is no excuse to "betray" the revolutionary project, and criticized "big egos" in some "comrades". Maduro says the 3rd Congress will seek to "unify us around a single vision"...for the next 20-30 years". More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/140721/presidente-dice-que-se-busca-unificar-en-una-sola-vision-al-partido; NTN24, http://www.ntn24ve.com/node/140150; and Infolatam)

Lopez is taken out of isolation
Attorneys for Leopoldo López report he now enjoys the same rights as other prisoners and can receive third party visits, interact with other prisoners and visit the prison patio, as well as send and receive uncensored correspondence. More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/140722/autoridades-le-levantan-a-lopez-el-aislamiento)


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.

No comments:

Post a Comment