Exporter Guide

An Expert's View about Agriculture and Animal Husbandry in Venezuela

Last updated: 11 Jul 2011

Venezuela is a significant importer of agricultural products, totaling USD five billion in 2010 according to Bolivarian Republic of Venezuela (BRV) data. U.S. agricultural and food exports over the last five calendar years (2006-2010) have averaged USD 948 million per year.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 6/15/2011 GAIN Report Number: VE1150 Venezuela Exporter Guide Exporter Guide Approved By: Randall Hager Prepared By: Jonathan Martinez Report Highlights: Venezuela is a significant importer of agricultural products, totaling USD five billion in 2010 according to Bolivarian Republic of Venezuela (BRV) data. U.S. agricultural and food exports over the last five calendar years (2006-2010) have averaged USD 948 million per year. Additionally, demand for consumer-oriented products from the United States has been growing; total exports to Venezuela in this category grew from USD 84 million in 2006 to USD 125 million in 2010 Post: Caracas Author Defined: I. MARKET OVERVIEW Venezuela remains a significant importer of agricultural products, with total imports reaching USD five billion in 2010 according to BRV data. U.S. agricultural and food exports over the last five calendar years (2006-2010) have averaged USD 948 million. U.S. suppliers are seen by local importers, distributors and food processors as a reliable source, in terms of volume, standards, prestige, and quality. Additionally, many locally produced ingredients/products are either unavailable or insufficient. Demand for intermediate agricultural products from the U.S. has increased. Total exports were USD 124 million in 2006 compared to USD 445 million in 2010. Additionally, demand for consumer-oriented products from the United States has been growing; total exports of this category to Venezuela in 2006 were USD 84 million compared to USD 125 million in 2010. Among the intermediate and consumer-oriented products that have experienced strong growth are: snack foods, breakfast cereals, pancake mixes, dairy products, fresh fruits, processed fruits and vegetables, food ingredients, fruits and vegetables juices, confectionary, and tree nuts. There is also strong competition from Argentina, Brazil and Chile. The main reason for this is importers can take advantage of ALADI (Latin America Integration Association) regulations to import without foreign exchange restrictions. Additionally, Argentina and Chile have been very aggressively selling products (especially fresh fruits) to Venezuela and they benefit from duty-free preferential access. Demand for food and beverages is driven by a population of 29 million. With two-thirds of the population under the age of 30, Venezuela is a youth-oriented food market. This is an excellent opportunity for U.S. market share to increase in the future. II. EXPORTER BUSINESS TIPS Import Procedures: The BRV has implemented the United Nations Custom Computerized System (SIDUNEA) in the majority of Venezuelan ports of entry. With this system, clearing customs takes approximately five to eight working days. By law, only nationals and private custom agencies with Venezuelan local staff are entitled to conduct customs procedures. A custom agent assesses customs, port charges, and taxes, and fills out required paperwork. Generally, the custom agent?s fee is one percent of the CIF value, plus any other charges accrued during offloading. All imported goods presented at the ports of entry must be officially declared to SENIAT authorities within five days of arrival. Fines may be levied and applied to any shipment when the customs entry is made later than five days after the date of arrival. When an importer either delays or refuses to claim a product arriving in Venezuelan ports, SENIAT will impound the goods not claimed, and, if steep fines and storage fees are not promptly paid, sell the goods at auction. All shipments must be made on a direct consignment basis. Customs regulations stipulate that the consignee is the owner of the shipment and is responsible for all customs payments. Importers must register all of their products with the Ministry of Health?s Food Comptroller Division prior to placing the product on the Venezuelan market. Import Duties Import duties are calculated using the WTO Harmonized Scheduled Tariff classification system on the CIF value of the products (using the commercial invoice as basis). Import duties are assessed, due and payable at time of arrival. Import duties and fees are assessed in local currency, despite the currency listed on the commercial invoice. The value added (IVA) rate of twelve percent is calculated on the basis of the CIF value. Exchange Rate Policy Since early 2003, strict control policies govern and limit foreign exchange transactions. Currently, Venezuela?s currency, the Bolivar is set at 4.3 bolivars per US dollar since January 2011. Exchange trading is illegal and all import transactions must be approved by the government?s foreign exchange administration commission (CADIVI). Importers must register with CADIVI for formal applications for foreign currency transactions. When approved, the transactions are then liquidated through the Central Bank and finally through commercial banks. A complete list of imported agricultural products that can be imported at the official foreign exchange rate can be found at: http://www.cadivi.gob.ve. The list should be checked periodically as products are added or removed by CADIVI without previous notice. For more information about food products included in CADIVI?s priority list, visit: http://www.cadivi.gob.ve/normativa/pdf/minal1.pdf Price Controls Since January 2003, the BRV imposed a price control policy on basic food and processed food products. The Ministries of Agriculture, Finance, Food, and Commerce are responsible for recommending changes to the controlled-price list. Changes to the list of food products under price controls include: a) adding or removing products from the list, and b) increasing or lowering prices of certain food products. It is important for exporters to check the list of products under price controls and their current prices, as it changes periodically. III. MARKET SECTOR STRUCTURE AND TRENDS Food Service (HRI sector) Restaurant food sales, especially franchises, have been increasing in the last year. Venezuela is a good market for franchising investments as demonstrated by the amount and variety of new brands penetrating the Venezuelan market. Profranquicia is a private company chamber that has been working to accomplish franchisers' goals, lead by a proactive team of young executives with 420 members. This franchising chamber, founded in 1998, reports that there are 332 franchises currently operating in the country with a total of over 8,500 outlets/stores. Profanquicia reports that 32 percent of all franchises are food related. About 20 percent of the franchises are of U.S. origin. Most HRIs in Venezuela buy their food products at the lowest available price and prefer fresh foods to canned, precooked, or frozen. The HRI establishments buy products at many different points in the distribution chain, reflecting each product?s particular nature. Fresh foods are bought at wholesalers, and nonperishable products at hypermarkets whenever possible. Regarding refrigerated or frozen foods, the HRIs prefer to deal directly with the manufacturer, given that most distribution centers have limited cold storage capacity. Imported liquors are purchased from specialized distributors/importers. Food Retail sector Most of the supermarkets in Venezuela are owned by descendants of Portuguese immigrants who came to Venezuela in the 1950?s. The sector was characterized by many disparate, small groups of outlets called ?bodegas? or ?abastos? that did not have sophisticated import mechanisms and customer service in place. However, the supermarket sector has changed significantly in the last 20 years, and today most of the supermarkets have modern stores that offer quick and professional service to customers. One of the reasons for this change is that the new generation of supermarket owners has attended trade shows like the Food Marketing Institute Show (FMI), where they have learned the latest trends in the sector including technology. And, of course, some have been educated in the U.S. and/or visit frequently. Most of the major supermarket and hypermarket chains in Venezuela belong to the National Supermarket Association (ANSA). On the other hand, the Government of Venezuela is increasing expenditures on social food programs and price controlled foods are sold in government-owned MERCAL stores, or other outlets. The Government Food Distribution Network MERCAL or "Mercado de Alimentos C.A.", created in April 2003, markets food products at very low prices, usually even lower than the controlled-priced products sold by supermarkets. The program is focused on a basic basket of products which includes: dry milk, precooked corn flour, black beans, rice, vegetable oil, sardines, pasta, sugar, bologna, margarine, deviled ham, eggs, mayonnaise and sauces. MERCAL?s food distribution web has expanded to 15,743 points of sales that includes mostly small stores and 35 supermarkets. Food purchases are carried out directly by a government entity called CASA or ?Corporacion de Abastecimiento y Servicios Agricolas?, which was originally created in August 1989. CASA is in charge of purchasing domestic and imported food and agricultural products. Domestic purchases are made through several local suppliers including private companies. Imported goods come from different countries including Argentina, Bolivia, Brazil, Colombia, and China, among others. On January 2008, after several months of shortages of basic food products, the Government, throughout the Venezuelan state oil company PDVSA, created PDVAL, a subsidiary to produce and distribute food in Venezuela. On December 2009, a new network was created, Corporación de Mercados Socialistas (COMERSO), in charge of coordinating the programs on commercial distribution driven by the Bolivarian Government. The Government announced that PDVAL would administer and supply the COMERSO chain. Most recently, on January 2010 the Bolivarian Government announced the expropriation of the supermarket chain, ?Supermercados Exito? after several months of negotiations with majority holders French group Casino, and the Colombian ?Almacenes Exito,? Later on November 2010, the Government bought 81 percent of the shares of the CATIVEN Supermarket Chain owned also by the Casino Group. With the acquisition of this network the Venezuelan State became the owner of 35 stores that were renamed Abastos Bicentenario (formerly Supermercado CADA), six stores of Gran Bicentenario (former Hipermercado Exito), eight distribution centers and a transport system. Direct Marketing Marketing, through TV commercials, newspaper inserts, house visits or street vendors, is common. Mail orders are not an option because of the unreliability of the postal system. Supermarkets and hypermarkets like MAKRO, EXCELSIOR GAMA, PLAZA?S and CENTRAL MADEIRENSE have been successful by placing their catalogs in newspapers as weekend-issue inserts. Almost all businesses now use e-mail in their day-to-day business. E-commerce could be a promising area for growth with major supermarkets now allowing consumers to order on-line or by e-mail for home delivery. IV. BEST PRODUCT PROSPECTS Table 1. Best Prospects Listing Top 10 Venezuelan Agricultural Product Imports from the United States (Millions of U.S. Dollars) Product Description 2010 Wheat 166.58 Corn 193.21 Rice 127.88 Animal Fats 79.60 Soybean Meal 216.61 Vegetable Oils (Excluding Soybean Oil) 24.26 Fresh Fruits 19.45 Processed Fruit & Vegetables 14.08 Snack Foods (Excluding nuts) 15.45 Dairy Products 17.50 Source: Department of Commerce, U.S. Census Bureau, Foreign Trade Statistics V. KEY CONTACTS AND FURTHER INFORMATION Ministerio de Agricultura y Tierras (Ministry of Agriculture, MAT) Av.Urdaneta, Edificio ?MAT? Esquina de Platanal a Candilito La Candelaria, Caracas Tel: (58-212) 509-0347/ 0348/ 0359/ 0360/ 0361 http://www.mat.gob.ve Ministerio del Poder Popular para la Salud (Ministry of Health, MH) Av. Baralt, Centro Simón Bolívar, Edificio Sur El Silencio, Caracas Tel: (58-212) 408-0000 http://www.mpps.gob.ve División Higiene de los Alimentos (food registration) Av. Baralt, Centro Simón Bolívar, Edificio Sur, piso 3 El Silencio, Caracas Tel: (58-212) 408-1533/ 484-3066 Fax: (58-212) 483-1533 http://www.mpps.gob.ve www.msds.gob.ve Instituto Nacional de Salud Agrícola Integral-INSAI Av. Francisco Solano López cruce con calle Pascual Navarro Edificio Torre Banvenez, pisos12, 13 y 14 Sabana Grande - Caracas Tel: (58-212) 705-3416 http://www.insai.gob.ve/ Ministerio del Poder Popular para la Alimentación (Ministry of Food, MINAL) Av. Andrés Bello - Edificio ?Las Fundaciones? Municipio Libertador, Caracas Tel: (58-212) 577-0257 Fax: (58-212) 578-2647 http://www.minal.gob.ve Email address of Public Relations: oirp@minal.gob.ve Ministerio del Poder Popular para el Comercio (Ministry of Commerce, MC) Av. Lecuna, Torre Oeste de Parque Central Entrada Nivel Lecuna Caracas Tel. (58-212)-509-6861 http://www.mincomercio.gob.ve/ Exchange Control Administration Commission Comisión de Administración de Divisas (CADIVI) Av. Leonardo Da Vinci, Edificio PDVSA, Piso 3 Los Chaguaramos, Caracas Tel: (58-212) 606-3939 www.cadivi.gob.ve Servicio Nacional Integrado de Administración Aduanera y Tributaria-SENIAT Av. Blandín, C.C. Mata de Coco, Torre SENIAT La Castellana, Caracas Tel: (58-212) 274-4000/ 274-4026 http://www.seniat.gob.ve Fondonorma (COVENIN -Venezuelan Standards Agency) Director de Seguimineto y Control Servicio Autónomo Dirección de Normalización y Certificación de Calidad Avenida Andrés Bello, Edificio Torre Fondo Común, piso 11 Caracas, Venezuela Tel: 58-212-575-4111 Fax: 58-212-574-1312/576-3701 Instituto Nacional de Estadisticas (INE) (Nationall Statistics Office) Avenida Boyacá, Edificio Fundación La Salle Maripérez Caracas, Venezuela Tel: 58-212-781-1380 Telefax: 58-212-781-5412 782-1156 www.ine.gov.ve Bolsa de Productos e Insumos Agropecuarios de Venezuela, BOLPRIAVEN Parque Cristal, Ala Este, Piso 4, Of. 412 Los Palos Grandes, Caracas. Tel. 58-212-564.7446 - 564.9556 Fax 58-212-564.6894 www.bolpriaven.com Camara Venezolano-Americana de Comercio e Industria (VENAMCHAM) (Venezuelan-American Chamber of Commerce) 2da.Av. de Campo Alegre, Torre Credival, Piso 10, Ofic.A, Caracas 1060, Venezuela Apartado Postal 5181 (Caracas 1010-A) Tel.: 58-212-263-0833/267-20-76/64-81 Fax: 58-212-263-20-60 www.venamcham.org/ Federacion Venezolana de Camaras y Asociaciones de Comercio y Produccion (FEDECAMARAS) (Venezuelan Federation of Chambers and Associations) Edf. Fedecameras, PH 1 y 2, Av. El Empalme, Urb. El Bosque, Caracas 1050,Venezuela Apartado de Correos 2568 (Caracas 1010-A) Tel.: 58-212-731-17-11/17-13/18-45/19-32/19-67 Fax: 58-212- 730-2097 ? 731-1907 www.fedecamaras.org.ve/ Confederacion Nacional de Asociaciones de Productores Agropecuarios (FEDEAGRO) (National Confederation of Agricultural Producers) Edf. Casa de Italia, P.B., Av. La Industria, San Bernardino, Caracas, Venezuela Tel.: 58-212-571-40-35/573-44-01 Fax: 58-212-573-44-23 www.fedeagro.org/ Asociacion de Supermercados y Autoservicios (ANSA) / Supermarkets Ave. Principal de los Ruices Centro Empresarial Los Ruices Piso 1, Ofic. 116 Caracas 1071, Venezuela Tel: 58-212-234-4490/235-7558 Fax: 58-212-238-0308 www.ansa.org.ve Camara Venezolana de la Industria de Alimentos (CAVIDEA) / Food Chamber Av. Principal de Los Ruices Centro Empresarial Piso 5, Of. 510 Los Ruices Caracas, Venezuela Tel: 58-212-239-9818/0918 Fax: 58-212-238-3268 http://www.cavidea.org.ve/ Camara Venezolana de Franquicias (PROFRANQUICIA) Franchising 3ra. Transversal de Altamira con Avdas. Luis Roche y Juan Bosco, Oficentro Neur, Ofc. 4 Caracas, Venezuela Tlf. 58-212-266-8494/261-8613 Fax 58-212-261-9620 www.profranquicias.com Mercado de Alimentos MERCAL C.A. www.mercal.gob.ve/ Foreign Agricultural Service USDA/FAS American Embassy Calle F con Calle Suapure, Parcela B-2 Colinas de Valle Arriba Caracas 1061, Venezuela Phones: (58-212) 907-8333 Fax: (58-212) 975-8542 E-mail: Agcaracas@fas.usda.gov websites: www.fas.usda.gov http://caracas.usembassy.gov/usda (Caracas) Table A. KEY TRADE AND DEMOGRAPHIC INFORMATION Agricultural Imports From All Countries (2010) $5 billion U.S. Market Share 20 percent Total Population (Millions) 29 Number of Major Metropolitan Areas 6 Size of the Middle Class 20 percent Total Gross Domestic Product (2009) $326 billion Unemployment Rate 8.1 percent Exchange Rate US$1= 4.30 Bolivares Source: Department of Commerce, U.S. Census Bureau, Foreign Trade Statistics, World Bank, Local Newspapers, Venezuelan Official data.
Posted: 11 July 2011, last updated 11 July 2011

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