June 09, 2015

Logistics & Transport

 

Airlines still have US$ 3.7 billion in ticket sales cash trapped in Venezuela -IATA

Airlines have US$ 3.7 billion of cash from ticket sales trapped in Venezuela because of currency controls here, says the International Air Transport Association. "It's the airlines' money," IATA Director General Tony Tyler told journalists. "We recognize the country is in a difficult situation and doesn't have a lot of money to spare, but we do want the government to sit down with the industry," and address the long-running issue, Tyler said. (Reuters, http://www.reuters.com/article/2015/06/08/airlines-iata-venezuela-idUSL5N0YU4BW20150608; El Universal, http://www.eluniversal.com/economia/150608/iata-urges-venezuela-to-address-debt-to-airlines)

 

Guyana’s Civil Aeronautics Authority cancelled CONVIASA’s permit to operate at its airports due to lack of payment of the Venezuelan State air carrier of a fee used as a guarantee to compensate passengers in case air carriers stop flying all of a sudden. CONVIASA was not allowed to land in Guyana’s international airport since Saturday. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44196&idc=3; El Universal, http://www.eluniversal.com/nacional-y-politica/150608/guyana-suspends-entry-of-venezuelan-conviasa-planes)

 

20% of transportation units in Caracas are paralyzed due to high cost of spare parts

Drivers in Metropolitan Caracas are highly concerned about the scarcity and cost of spare parts, which has around 20% of vehicles out of commission; and members of the 71 organizations that operate public transportation in the suburban Tuy Valley area and other parts of the nation went on a five hour protest strike to protest the situation. Tires are one of the items that have had sharp cost increases. More in Spanish: (El Universal, http://www.eluniversal.com/caracas/150609/por-alto-costo-de-repuestos-se-paraliza-20-de-unidades)

 

 

Oil & Energy

 

Oil prices lower due to drop in Chinese crude oil imports

The average West Texas oil price dropped 1.67% to US$ 58.14 per barrel amid reports of import reductions by China, which have dropped 11% this year to date. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/petroleo-cae-por-descenso-de-importaciones-de-crud.aspx#ixzz3cYcPyTaU; El Mundo, http://www.elmundo.com.ve/noticias/petroleo/industria/petroleo-cae-por-descenso-de-importaciones-de-crud.aspx)

 

The OPEC decided to keep its 30 million barrels per day production quota unchanged, as anticipated by the market. Minutes before the meeting began in Vienna, Saudi Minister Ali al Naimi had told the press demand had been increasing lately and supplies had been dropping. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44195&idc=4)

 

 

Commodities

 

Minister claims that the government has distributed 128,000 tons of food in 2015 to date

General Carlos Osorio, Vice President for Nutrition Security and Sovereignty, says that to date this year over 128,000 tons of food have been distributed to over 5 million people through state food distribution centers such as MERCAL, PDVAL and Abastos Bicentenarios. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/agro/osorio--hemos-distribuido-mas-de-128-mil-toneladas.aspx#ixzz3cSqv38Tl; Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/m%C3%A1s-mill%C3%B3n-600-mil-toneladas-alimentos-se-han-distribuido-este-a%C3%B1o)

 

...and announces state quotas for cleaning and personal care products

General Osorio also announced that the regime will authorize distribution of personal care and cleaning products on a state by state weekly basis. He said "we now control distribution of 6 products, such as diapers, soap, and detergents, among others." More in Spanish:  (El Mundo, http://www.elmundo.com.ve/noticias/economia/mercados/cada-estado-del-pais-tendra-una-cuota-de-productos.aspx#ixzz3cYeCfuIT)

 

 

Economy & Finance

 

Barron's: Venezuela Reserves hit new low, gold not helping

Venezuela’s central bank has reported foreign reserves fell to a new 12-year low. The data show reserves fell to US $16.897 billion for the week ended June 3, from a prior-week figure of US$ 17.526 billion. Venezuela held approximately 11.6 million ounces of gold at the end of 2014. It was valued at US$ 14.6 billion, calculated at an average price near US$ 1,258 per ounce. But gold prices are down nearly 10% from their settle high of near US$ 1,301 in late January. Still, a Venezuelan debt default may not be in the offing. Venezuela borrowed roughly US$ 385 million from its the International Monetary Fund in April – albeit the first such loan in more than a decade. LATINVEST Editor Russ Dallen reiterates his sentiment that “Venezuela is running on fumes,” writing: "Venezuela’s situation continues to unravel at increasing speed as the bolivar tumbled 30% over just the last week, while the country’s international reserves simultaneously hit a new 12 year low …Venezuela’s reserves have now fallen 21% since the beginning of the year, but more importantly US$ 6.7 billion from their high just 2 months ago – a high that not only included US$ 2.8 billion from mortgaging CITGO, US$ 1.9 billion from the selling of US$ 4 billion of oil receivables from the Dominican Republic, and the transfer of previously unreported China FONDEN funds into the reserves." (Barrons, http://blogs.barrons.com/emergingmarketsdaily/2015/06/05/venezuela-reserves-hit-new-low-gold-not-helping/)

 

The government’s debt with the private sector is almost equivalent to the totality of the international reserves at this moment. The government owes the automotive, pharmaceutical and aeronautics sectors, among others, some US$ 14 billion for non-liquidated dollars. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44198&idc=2)

 

Chinese cooperation fund reportedly grants new loans

Surface Transport Minister and Vice President for Territorial Socialism Haiman El Troudi who is in China for an international forum, has reported that, loan lines for US$ 30 billion were activated, under special conditions, for infrastructure projects. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44192&idc=2)

 

 

Politics and International Affairs

 

Saab says legislative elections are slated for the end of the year

Public Defender Tarek William Saab has announced that legislative elections will be held toward the end of the year, adding that Tibisay Lucena, President of the National Elections Board has said so publicly "and I can confirm it because we have discussed it on the telephone: The elections will be at the end of November or the first week of December. (El Universal, http://www.eluniversal.com/nacional-y-politica/150608/saab-a-final-de-ano-se-realizaran-las-parlamentarias)

 

Opposition says it will sign an elections pact, with conditions

Jesús Torrealba, Secretary General of the opposition Democratic Unity Conference (MUD) says they have agreed to sign an agreement to abide by results, as proposed by President Nicolás Maduro - but will insist on having international observers during the process. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/mud-condiciona-acuerdo-electoral-propuesto-por-mad.aspx#ixzz3cYdJxLC2)

 

UNASUR Secretary General expects UN and EU to do "their job" in elections here

UNASUR Secretary General Ernesto Samper has said he expects the Organization of American States (OAS) and the European Union (EU) to "do their job" in the upcoming legislative elections in Venezuela. He added that UNASUR will be present at the polling, at the invitation of National Elections Board Chairman Tibisay Lucena. (Globovision, http://globovision.com/samper-espera-que-oea-y-ue-cumple-su-tarea-en-elecciones-venezolanas/)

 

Spanish ex-premier Gonzalez in Venezuela to help defend jailed opposition leaders

Former Spanish prime minister Felipe González is in Venezuela to help lawyers defending imprisoned opposition leader Leopoldo Lopez. He was criticized by President Nicolas Maduro after announcing he would advise Lopez and showered with insults by his supporters. The Foreign Ministry has said that Gonzalez isn't welcome here. He has already visited Caracas mayor Antonio Ledezma who is currently under house arrest on charges of conspiring against Venezuelan President Nicolas Maduro’s government. “Finally, with authorization, we made the meeting possible, a very pleasant, very cordial one, and we spoke about the concerns we all have (...) we think Venezuela lacks dialogue to solve problems,” said Felipe Gonzalez in brief remarks. “One has to talk, rebuild, reconcile and reconstruct institutions,” he added. After the head of Venezuela's Supreme Court said he was not allowed to take part in court proceedings, González said he will simply advise the defense, adding "I did not come here to fight with the government; I am here to try to visit the political prisoners and am awaiting permission to do so." (Fox News, http://www.foxnews.com/world/2015/06/07/spanish-ex-premier-gonzalez-arrives-in-venezuela-to-help-defend-jailed/; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2389867&CategoryId=10717; El Universal, http://www.eluniversal.com/nacional-y-politica/150608/felipe-gonzalez-waits-for-authorization-to-visit-political-prisoners; Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44199&idc=1; and more in Spanish: El Universal, http://www.eluniversal.com/nacional-y-politica/150609/gonzalez-vine-a-asesorar-y-a-ver-a-los-presos-politicos; El Nacional; http://www.el-nacional.com/; and Infolatam, http://www.infolatam.com/2015/06/08/gonzalez-acata-decision-de-supremo-venezolano-sobre-defensa-de-opositores/)

 

Guyanese foreign minister to summon Venezuelan ambassador

Guyanese Foreign Minister Carl Greenidge said he was preparing to summon Venezuela's ambassador to ask her why Caracas has allegedly further extended its maritime boundary to include an offshore area precisely where US oil giant ExxonMobil, granted a concession by Guyana, recently found a huge oil deposit. "We shall be calling in the country's (Venezuela) ambassador to explain its (the decree on maritime boundaries) meaning, and to voice our concern about this escalation of a long-running attempt to achieve by questionable means, what Venezuela has so far failed to achieve by internationally accepted legal and diplomatic approaches," Greenidge said, without saying the date when the ambassador would be summoned. (El Universal, http://www.eluniversal.com/nacional-y-politica/150608/guyanese-foreign-minister-to-summon-venezuelan-ambassador; Reuters, http://www.reuters.com/article/2015/06/08/guyana-venezuela-idUSL1N0YU1L620150608; El Universal, http://www.eluniversal.com/nacional-y-politica/150608/guyana-terms-illegal-venezuelas-decree-on-maritime-boundaries)

 

Venezuelan Bishops’ Conference (CEV, in Spanish) rejected the government’s refusal to allow them to visit political prisoners in jail. Its head, Monsignor Diego Padrón emphasized they would insist on the need for a true dialogue and for the immediate release of Venezuela’s political prisoners, as well as respect for their human rights. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44200&idc=1)

 

Venezuelan Foreign Affairs Minister Delcy Rodríguez was also appointed PDVSA’s director and Vice President for International Affairs (June 3 Gaceta Oficial). (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44194&idc=4)

 

 

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.