Nicaragua Venezuela Sugar Deal (45,000 tons on State-owned vessels)

[Catherina]

Nicaragua sends its first shipment of 15,000 tons of sugar to Venezuela

(EFE) – hace 18 horas

Managua, 26 may (EFE).- Nicaragua sends its first shipment of 15,000 tons of sugar to Venezuela today, out of a total of 45,000 tons. This as part of the bilateral ALBA accords, stated an official source, Virgilio Silva, chief executive of Nicaragua’s National Port Authority, told the media.

The sugar was loaded onboard the vessel "Manuel Gual" of the state-owned Venezuelan shipping company Venevega), in the port of Corinto, Nicaragua's main port on the Pacific...

He added that two Venezuelan ships are scheduled to dock at the same port on May 29 and June 5 to load another 15,000 tons of sugar each.

Silva said last Friday they loaded another 980 heads of cattle on a Venezuelan ship in port Sandino, also in the Pacific, bound for Caracas, in the framework of the ALBA, to which both countries belong.
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http://www.google.com/hostednews/epa/article/ALeqM5j5YQbdTabw5BFm975yP5xYDIYCIg?docId=2047556

"ALBA agreements involve a series of gears, economic development, social action and these issues are framed in sub-gears which in turn are generating development in different regions of Nicaragua," Silva said.

He pointed out that this is not the first time Nicaragua exports sugar to Venezuela but the difference nos is that it's being done on Venezuela's state-owned vessels and not through multinational corporations. "This gives us great satisfaction because it's the first time that Venezuela, with its own ships, is handling the export products," he said.

Silva announced that that Nicaraguan National Port Company (EPN) authorities are evaluating the possibility of forming an alliance between Venevega and Nicaraguan ships to coordinate the movement of exports and, if necessary, also imports.

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Since the creation of the ALBA, Venezuela became the second major market for beef, beans, cattle and other Nicaraguan products according to the Report Center of Export Processing (CETREX).

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http://www.prensa-latina.cu/index.php?option=com_content&task=view&idioma=1&id=1451181&Itemid=1

[Judi Lynn]

1. Super cool! This is a giant occassion. Big firsts, REALLY BIG steps forward.

You know it would have delighted Hugo Chavez to see this, too!

It's going to be meaningful to people of both countries, mutually useful, beneficial.

[Catherina]

2. I was thinking the same thing

Super cool!

[Socialistlemur]

3. Another sign of Dutch Disease

This is another sign of the Dutch Disease which has infected Venezuela and seems to be worsening over time. A country with land, water, the temperature range and people to work the land should not be importing sugar. Furthermore, the use of state owned vessels is quite inefficient...Venezuela is deeply in debt and it can't afford such grandstanding.

[naaman fletcher]

4. I'm not sure I agree with your attitude here:

Maduro inherited a mess, and I am very pleasantly surprised to see his quick and decisive action in a number of areas. Although as a civil libertarian the thoughts of Army's patrolling the streets is problematic, Maduro quickly moved to solve the crime issue that Chavez ignored for so long and as someone else posted there were I believe three straight nights of no murders in Caracas.

He has moved quickly on the toilet paper and the sugar issues (for the short term).

Now, that still leaves outstanding the two major issues, the price controls and the currency controls.

However, Maduro met with Polar and agreed Polar was producing as much as possible. Maduro did the raid on the rinky-dink grocery store as red meat for the Chavistas and their American sympathizers, but it is logically impossible to blame hoarding for the issues while saying Polar is ok since Polar is like 50% of distribution.

That Means that Maduro knows what the real problem is and is going to act.

I am not a fan of the Chavistas since, i dont know, after the first four years, but we should applaud and recognize sound policy moves when they happen.

[Socialistlemur]

5. Venezuela is in terrible shape because Chavez' policies were wrongheaded

I believe this tread is about the shipment of sugar from Nicaragua to Vehezuela in state owned ships. We can discuss whether Maduro's use of the military in a few areas is a wise move or not later.

Regarding the sugar shipment, we need to consider two items. One, the use of state owned ships. I think this is irrelevant. I suspect this is part of a move to allow triangulation and movement of goods back and forth between Venezuela, Cuba, and Nicaragua. But it's not meaningful news. Evidently a ship isn't a used vehicle, those ships were already state owned and crewed a while back. The other and more important point is whether Venezuela should pay Nicaraguans to grow sugar cane, grind it and make sugar when Venezuelans can do it.

The reason why Venezuela can't do it is called Dutch Disease. Their currency is overvalued. This renders local producers unable to compete. If this fact doesn't sink in somebody's head in Caracas they are going to go broke. The disparity is incredible, right now the parallel market is selling bolivars at 26 to 28. The official rate, 6.3 means this sugar is being sold in Venezuela at ridiculous prices. Sugar used to rot people's teeth and worsen their diabetes.,.get it? These guys have really irrational policies, they give away gasoline to the public, give away appliances like air conditioners when they lack the electric power grid to feed them, and do all sorts of shenanigans which allow corruption to flourish. From a fiscal, environmental and social development standpoint they are mad hatters. Why do you think they had to borrow $2 billion from Chevron? Do you think Chevron is a charity? Those bastards put steel claws on PDVSA. And PDVSA had to make the deal precisely because in spite of all the oil they have they just can't carry 30 million Venezuelans plus aid to Cuba, Nicaragua and others. PDVSA is in bad shape and will break if they don't open SICAD at 12 bolivars to the USD ASAP.

[naaman fletcher]

7. I agree with you 100%

All I am saying is that whereas Chavez just ignored certain problems (like crime), Maduro actually seems to be aggressively moving to create some obvious faults. The two big elephants in the room are the price and currency controls, and by saying that Polar isn't hoarding Maduro is implicitly recognizing that. I bet that within 90 days we see reform of both.

[Socialistlemur]

8. Evidently Maduro isn't Chavez

I do see Maduro reacting to fix problems. But look at the numbers. Chavez won the election in October 2012 by a landslide. He was sick with cancer and couldn't campaign effectively, but he won without much effort. Then he keels over and goes off the grid...Maduro as Vicepresident has to start making decisions and he's not prepared (this was evident by what he said at the time). The currency devaluation was needed urgently, but it was postponed. I'm convinced they knew Chavez was dying...and Maduro's lack of political savvy showed...because the best move was to devalue ASAP and say it was done as ordered by Chavez. Hell, Chavez should have given a speech telling everybody to buckle up because they had to devalue. Instead they allowed the bolivar to stay up and this really bled them. I read the transcript of the Mario Silva tape, and Silva said Cabello was laundering money, taking advantage of the super strong currency and his connections. It doesn't really matter who took the money, but it's gone. And now it's very clear Maduro has empty bank accounts and no way to cover the subsidies he needs to put in place when he devalues. It was a trap as far as I can see. It's as if they had set up boulders to run downhill on the guy's head. And this is why we see the deal with Chevron, Rosneft and the Chinese. They had been sitting around waiting like vultures. I keep an eye on their moves and it was evident. So where does Maduro go now? I think he needs to open up SICAD wide open and let that market reach equilibrium. This destroys the black market speculation. And he needs to use something like food stamps - which is going to cause endless hassles because they'll say it's a Cuban rationing system. He also needs to raise gasoline prices and stop corruption. Jesus those guys must have been getting advice from CIA agents disguised as financial advisors, because over the last 6 months they sure screwed up. Regarding crime I'm not impressed by using the military. What they need is to transfer those soldiers to the National Guard - break them up and put them with units used to dealing with civilians. And the stupid talk about handing more weapons to the population sure is wrong. That's a country in need of serious gun control and they're putting machine guns out on the street? Give me a break.

[Bacchus4.0]

6. It is symptom of the failure of the agricultural system though

I mean sugar cane in the tropics is as common as sun in the tropics, with the exception of Venezuela apparently.

[Socialistlemur]

9. Jesus couldn't raise sugar cane in the face of a strong currency

The problem isn't the weather. The problem Venezuela faces is its oil. Oil producing countries all share a similar problem, the oil income drives up the currency and this makes local production a non starter...it needs subsidies. But if the government starts screwing around and takes the import route, then it looks good for a while, and eventually there's hell to pay. Inflation takes off and they enter an endless spiral which kills off national production. If the government dumps subsidized food people start eating a lot better...but unless they have Saudi Arabia type oil fields it hits a wall. And Venezuela doesn't have Saudi type fields, it has huge amounts of heavy oil. And this heavy oil is really hard to produce and takes a lot of investment. I got a hunch Rafael Ramirez, PDVSA's president, oversold himself to Chavez and made believe he could get the oil out by magic. But that's not the way it works. Either he needed billions Chavez was using in subsidies or he needed foreign multinationals to loan money...which they'll gladly do if the deal is just right. I keep warning you guys, Chevron isn't Cinderella, those guys really hard ball and are sneaky. Of all the big oil companies they and BP have a lousy environmental record. And this is the one we see getting more active in Venezuela? Guess what they are asking in exchange for that $2 billion loan?