Venezuela Shipping Report Q4 2011
Includes 3 FREE quarterly updates
Our outlook for growth in the Venezuelan port sector and shipping industry in 2011 remains distinctly underwhelming. This is because the Venezuelan economy will experience very modest expansion (GDP growth of 1.9% after two years of recession), mainly linked to higher prices for oil exports, while serious economic imbalances will remain firmly in place. We expect chronic inflation to continue, oil production to be stagnant, and investors to remain nervous as further nationalisations remain probable. With foreign trade growth also modest, we see cargo throughput at the country's main ports remaining virtually flat this year. Tonnage and container volumes will therefore remain well below their prerecession levels.
Headline Industry Data
Loans-for-Crude Trend Continues As PdVSA Seals Deal With Japan - BMI has noted a growing trend of Venezuelan loan-for-crude agreements, a worrying development for a country that is already heavily dependent on oil revenues. Most recently Venezuela has signed a loan-for-crude deal with Japan, one year after a similar agreement with China. We believe more of these agreements are likely as Venezuela seeks to secure cash in the short term and build relations with energy-hungry Asia. Under the latest deal Japan is to lend US$1.5bn to Venezuelan oil giant PdVSA in return for 3bn barrels of crude per year over five years.
Venezuelan Ports Face Soaring Tariffs, Consumers Likely To Take Hit - BMI believes Venezuela's beleaguered port sector has further difficulties ahead, with the announcement that the government is to substantially increase the country's port tariffs as of June 24, according to a decree published in the government's official gazette. The increased costs place further downside pressure on our forecasts for Venezuela's ports, and risk of exacerbating the country's soaring inflation. President Hugo Chavez's administration says it is setting a single rate for services in all ports in order to improve and promote port activity. The tariff increase, which is the first since the government nationalised the country's ports 2009, will see prices at Puerto Cabello, the country's largest port, rise by an average of 250%, according to the port's chamber of commerce.
Key Risks To Outlook
In BMI's view there is a small and short-term upside risk to our industry projections, coupled with rather more serious and medium term downside risks. On the upside, higher-than-expected oil prices in 2011 and beyond could provide a significant boost to the state's coffers, increase the supply of dollars in the economy and stimulating private consumption, which would lead to a rise in demand for shipping and port services.
The downside risks are largely connected with the volatile political situation as President Hugo Chavez prepares for elections in 2012. Increased political strife - a new turn in the ongoing cycle of pro- and anti- Chavez standoffs - could push Venezuela back into recession at any point over the next two years.
Our outlook for growth in the Venezuelan port sector and shipping industry in 2011 remains distinctly underwhelming. This is because the Venezuelan economy will experience very modest expansion (GDP growth of 1.9% after two years of recession), mainly linked to higher prices for oil exports, while serious economic imbalances will remain firmly in place. We expect chronic inflation to continue, oil production to be stagnant, and investors to remain nervous as further nationalisations remain probable. With foreign trade growth also modest, we see cargo throughput at the country's main ports remaining virtually flat this year. Tonnage and container volumes will therefore remain well below their prerecession levels.
Headline Industry Data
- Puerto Cabello will see a largely flat year, with cargo volume up by only 0.24% to 3.609mn tonnes in 2011.
- Box traffic will register low growth in 2011: +0.9% to 403,560 20-foot equivalent units (TEUs) at Puerto Cabello, +0.6% to 335,870TEUs at La Guaira.
- Venezuelan trade value to increase 2.9% in real terms in 2011, with exports up by 6% and imports growing 4%.
Loans-for-Crude Trend Continues As PdVSA Seals Deal With Japan - BMI has noted a growing trend of Venezuelan loan-for-crude agreements, a worrying development for a country that is already heavily dependent on oil revenues. Most recently Venezuela has signed a loan-for-crude deal with Japan, one year after a similar agreement with China. We believe more of these agreements are likely as Venezuela seeks to secure cash in the short term and build relations with energy-hungry Asia. Under the latest deal Japan is to lend US$1.5bn to Venezuelan oil giant PdVSA in return for 3bn barrels of crude per year over five years.
Venezuelan Ports Face Soaring Tariffs, Consumers Likely To Take Hit - BMI believes Venezuela's beleaguered port sector has further difficulties ahead, with the announcement that the government is to substantially increase the country's port tariffs as of June 24, according to a decree published in the government's official gazette. The increased costs place further downside pressure on our forecasts for Venezuela's ports, and risk of exacerbating the country's soaring inflation. President Hugo Chavez's administration says it is setting a single rate for services in all ports in order to improve and promote port activity. The tariff increase, which is the first since the government nationalised the country's ports 2009, will see prices at Puerto Cabello, the country's largest port, rise by an average of 250%, according to the port's chamber of commerce.
Key Risks To Outlook
In BMI's view there is a small and short-term upside risk to our industry projections, coupled with rather more serious and medium term downside risks. On the upside, higher-than-expected oil prices in 2011 and beyond could provide a significant boost to the state's coffers, increase the supply of dollars in the economy and stimulating private consumption, which would lead to a rise in demand for shipping and port services.
The downside risks are largely connected with the volatile political situation as President Hugo Chavez prepares for elections in 2012. Increased political strife - a new turn in the ongoing cycle of pro- and anti- Chavez standoffs - could push Venezuela back into recession at any point over the next two years.
Contents
Executive SummaryHeadline Industry Data
Key Industry Trends
Key Risks To Outlook
SWOT Analysis
Venezuela Shipping SWOT
Venezuela Political SWOT
Venezuela Economic SWOT
Venezuela Business Environment SWOT
Global Overview
Container Shipping: Overcapacity Threat To Haunt In The Mid Term, Asia-Europe Most Exposed
Drivers
Bellwethers
Rates
Capacity
Table: Newbuilds Due Online In The Mid Term
Dry-Bulk: No Recovery On The Horizon For Dry Bulk As Overcapacity Cloud Hangs Low
Drivers
Capacity
Rates
Liquid Bulk Shipping: At the Start of a Brutal Down Cycle
Drivers
Capacity
Rates
Industry Trends and Development
Market Overview
Port of Puerto Cabello
Port Of La Guaira
Industry Forecast
Table: Major Port Data, 2008-2015
Table: Trade Overview, 2008-2015
Table: Key Trade Indicators, 2008-2015
Table: Main Import Partners , 2002-2009
Table: Main Export Partners, 2002-2009
Company Profile
Petroleos de Venezuela Marina
Maersk Line
Mediterranean Shipping Company (MSC)
CMA CGM
COSCO Container Lines Company Limited (COSCON)
Hapag-Lloyd
Evergreen Line
APL
CSAV
Hanjin Shipping (Container Operations)
China Shipping Container Line (CSCL) Skip to top