Venezuela sends first exports to Mercosur trade bloc, 23th August 2012
By Marianna Parraga.- CARACAS, Aug 23 (Reuters) - Venezuela sent a first shipment of aluminum, fertilizer and glass to its new partners in the Mercosur regional trade bloc on Thursday despite the country's growing imports and shortages in the domestic market. Venezuela's socialist President Hugo Chavez has hailed its admission to Mercosur, which includes Brazil, Argentina, Uruguay and Paraguay, as heralding an important new era of economic cooperation across South America. The launch of the Jose Leonardo Chirinos container ship, owned by a subsidiary of state oil company PDVSA, was broadcast live on state TV from Venezuela's main port, Puerto Cabello. It will make deliveries in Brazil and then Uruguay. Thursday's shipment was Venezuela's first under the new partnership, although officials say several issues within the bloc, including tariffs, still need to be agreed upon. Mercosur accounts for more than $3 trillion in combined gross domestic product, and its leaders say it would be the world's fifth-largest economy if it were a single nation. The Jose Leonardo Chirinos ship is one of three bought by Citgo, PDVSA's U.S. refining unit, to help drive Venezuela's imports and exports. The ships have been anchored for more than a year while waiting for Chavez's government to set up a new state company to manage their operations, said a source involved in the process. Venezuela imports most of what it consumes, including commodities, food, equipment and services, while domestic production has been declining alongside high inflation, heavy state subsidies and strict currency controls. Total imports during the first half of this year rose 27 percent to around $27 billion compared with the same period in 2011, which has contributed to overcrowding at Venezuelan ports and delays at the dockside. State-owned Pequiven, which produces petrochemicals and fertilizers, took a hit of around $170 million last year due to government subsidies that make local prices very low. That slashed its 2011 net income to less than a tenth of its revenue the year before - down to $30 million from $385 million in 2010 - during a time when the cost of most petrochemical products increased in the international market. Pequiven is forced to import fertilizers to meet domestic demand, which is being pushed higher by government plans to strengthen local agricultural and reduce imports. (Editing by Daniel Wallis and Kenneth Barry)