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Government bonds are likely to hit the capital market from January 1, 2005, officials concerned said.
   Securities and Exchange Commission has already got the central bank’s consent and the commission will go through some operational aspects including the mode of the bond distribution before the final go, they said.
   The official sources said that the commission will make the announcement ‘very soon’.
   The SEC chairman, Mirza Azizul Islam, told New Age, ‘We are hopeful of starting the trading of the bonds in early January, but we want to review the process before the final go.’
   The government earlier decided to float two of its treasury bonds - 5-year and 10-year – with price denomination of Tk 1 lakh each bond, fixing interest rate at 7.5 per cent for 5-year and 8.5 per cent for 10-year bonds.
   Both the Dhaka and Chittagong stock exchange have already informed the capital market regulatory body that the bourses are prepared to run the trading of the government bonds.
   Introduction of government bonds would help capital market mobilise funds as investments in such bonds, which accrue fixed returns, are risk free, Dhaka Stock Exchange officials said.
   The Bangladesh Bank would issue the bonds to primary dealers through auctioning. The bonds will be transacted through central depository system under dematerialised form.
   The primary dealers would sell these bonds in the capital market through any of the existing brokerage houses as eight of them do not have the membership with the stock exchanges, officials said.
   Of the nine primary dealers of the T-bond, only NCC bank has the membership with the DSE.
   In August, the commission requested the central bank to increase the number of dealership for the Treasury bond.
   Dhaka Bank, the Investment Corporation of Bangladesh, the Bangladesh Shilpa Rin Sangstha and the Bangladesh Shilpa Bank applied for the primary dealership of the government bonds, an SEC official said.
   At present, these bonds, which are issued from time-to-time to meet specific financial needs of the government, are being traded at the secondary bond market through nine primary dealers appointed by the Bangladesh Bank.

Price of coarse flour has reached Tk 19-20 per kilogram this week, marking a 24 per cent rise in a year.
   Traders attributed the abnormal increase of the essential’s price to rising price of wheat in international market.
   Price of a one-kilogram pack of Teer brand atta rose to Tk 19-20 against Tk 18 a week back and Tk 16 a month ago.
   The Consumers Association of Bangladesh said even price of bulk atta has increased to Tk 17.5-18, up from Tk 15 a month back and Tk 13-13.5 a year ago.
   ‘Government should do something to keep supply and price of the major commodity stable. It is possible as atta is an import-dependent commodity,’ said Emdad Hossain Malek, chief of the market monitoring cell of the consumer right group.
   In Pakistan, government fixes the retail price of flour and subsidises its import and transport to keep its supply smooth throughout the country, he cited.
   Price of atta increased by Tk 3.5 per kilogram over the year, the Trading Corporation of Bangladesh said in its routine market evaluation report sent to the commerce ministry last week.
   Though supply of the commodity remained normal, its price has been going up, said the almost-crippled trading arm of the government, which now limits its activities to mere monitoring of market price of essentials.
   Abu Taher, a shop-owner at the New Market, said wholesalers increased price of atta Tk 3 per kilogram in a couple of months and last week’s increase of Tk 1 is the latest in the row.
   ‘Within two months, import price of wheat increased by $40 to $50 per tonne while freight charge went up by $20 per tonne,’ said a businessman, who markets a popular brand of atta and edible oil.
   Indian exporters raised wheat price to $200- $210 per tonne over the month while price of fine quality Canadian and Australian wheat rose to in between $260 and $270 from $210 and $215, he said.
   Increased import cost led to the increase in price of packed atta, said the businessman, whose company packs more than 500 tonnes of atta everyday.
   He said only in Dhaka and suburbs more than 800 tonnes of atta are consumed every day.
   But world wheat price showed a mixed trend last week. On London commodity exchange, wheat for January delivery fell to 64 pounds ($122.88) per tonne on Friday from 65.50 pounds ($125.76) in the previous week.
   In Chicago, the price of wheat for December delivery, however, marked a slight increase.
   Country’s annual consumption of atta is nearly 27 lakh tonnes and major portion of this is met by imported wheat as local production is declining.
   Country’s estimated production of wheat last fiscal was 12.53 lakh tonnes.
   According to the latest statistic provided by the state-run trading corporation, 6.80 lakh tonnes of wheat were imported till October 31 of the current fiscal against 15.40 lakh tonnes in the previous fiscal.

Japan and the UK would jointly extend all possible support to Bangladesh for stepping into next higher tier of economic growth as they found the country making impressive progress towards UN Millennium Development Goals.
   The combined concrete assurance came from a two-member joint delegation of the two major bilateral donors met the prime minister, Khaleda Zia, at her office Monday afternoon.
    The team comprises DFID permanent secretary Suma Chakrabarty and deputy director general of economic cooperation bureau, Japan’s ministry of foreign affairs, Kazuo Kodama.
   During the meeting, they congratulated Khaleda as Bangladesh made “impressive progress” towards attaining the Millennium Development Goals as well as in other fields.
   After taking a firsthand view of the ground realities, the two donor representatives remarked that the country was now “prepared to get into higher growth strides”.
   The Japanese took the opportunity to apprise the prime minister that Japan government, two weeks back, provided Bangladesh a Tk 613 crore loan to assist the country in rural infrastructure development.
   Both the visitors wished that Japan-UK and Bangladesh would work together in a synergy for the development of Bangladesh, with assurances that they will continue their assistance in the future as in the past for further progress.
   The UK and Japan are the “trusted friends of Bangladesh”, said the duo, who are here assessing the prospects for gearing up their development cooperation.
   Mentioning their contribution and assistance for a long time to various sectors in Bangladesh, Khaleda thanked both Japan and UK governments and hoped for further cooperation.
   She particularly cited British support in poverty-reduction drive, such as Char livelihood programme, and Japan’s debt cancellation of 1.49 billion dollars to Bangladesh and assistance for the Jamuna bridge.
   Khaleda stressed on necessary social and physical infrastructures as the launching pad for the next stage of development activity.
   On social infrastructure she sought cooperation from them in imparting training to civil servants while physical infrastructure-development assistance is needed in transport, power, irrigation, water and education sectors.
   Responding to the prime minister, the visiting foreign delegation assured her of extending support to that end.
   Appreciating the contents in Poverty Reduction
   Strategy Paper like poverty reduction through economic growth, improvement of infrastructure and participation of private sector, they remarked, ‘We will be behind it and support it.’
   They also praised remarkable improvement in the security and law-and-order situation in Bangladesh following the efforts of the government.
   The Dhaka representative of British Department for International Development (DFID), David Wood, who was also in the meeting, said Bangladesh still does not get proper publicity of its achievements in various fields in the external world.
   And the DFID representative expressed interest in extending cooperation in external publicity for a better recognition of Bangladesh’s achievement.
   Among various other development issues, development of ports was also discussed at the meeting.
   British High Commissioner Anwar Chowdhury and Japanese ambassador in Dhaka Matsushiro Horiguchi accompanied the delegation.

Oil giant Unocal Corp. has reached an agreement in principle to settle human rights lawsuits involving allegations of enslaved labour during a 1990s pipeline project in Myanmar, a company spokesman said late Sunday.
   The lawsuits maintained that El Segundo-based Unocal should be held liable for the alleged enslavement of villagers during construction of a natural gas pipeline in the 1990s in the country formerly known as Burma.
   The full panel of the 9th US Circuit Court of Appeals had been scheduled to hear arguments on the case Monday afternoon in Pasadena, but the hearing was canceled at the request of both parties, Unocal spokesman Barry Lane said Sunday night.
   Human rights lawyers representing 14 anonymous villagers also alleged in the lawsuits that Myanmar soldiers murdered a baby, raped women and girls and forced people out of their homes to clear the pipeline’s route.
   The lawsuits against the oil and gas giant have been considered a key test for human rights activists seeking to hold multinational corporations responsible in US courts for alleged atrocities committed abroad.
   Discussions to settle the lawsuits were ongoing and no details were being immediately released, Lane said.

The Workers Rights Welfare Committee elections held at the six factories of Dhaka and Chittagong Export Processing Zones on Sunday.
   About 98 per cent workers of these six factories – IL Kwang, Savar Industries and Expicom Ltd of Dhaka EPZ and Alita (BD) Ltd, Van Green (BD) Ltd and ACE Bicycle of Chittagong EPZ – cast their votes to elect 5-member committee for each of the factories.
   This is the first step to implement the second chapter of the EPZ Workers Association and Industrial Relations Act-2004.
   The Bangladesh Export Processing Zones Authority has taken three months plan to complete the election of all operational enterprises of the export processing zones. ‘Hopefully this election procedure will complete within the next 3 months,’ said the executive chairman of BEPZA, Md Zakir Hossain.
   The next election will be held at Krylon Ltd, Hin Getah (BD) Ltd and Bureau Veritas of Dhaka EPZ and Luna Lite and BMS Company of Chittagong EPZ today.
   Robort Wong, second secretary of the US embassy in Bangladesh, and two other representatives from AFLCIO Bangladesh Solidarity Center were present at Dhaka EPZ to monitor the election, says a press release.
   Another observing team consisting field representative of AFLCIO Rob Wayes and other two members of AFLCIO Bangladesh Solidarity Center monitored the Chittagong EPZ election.

Bangladesh and Denmark today signed an agreed minutes on bilateral development cooperation.
   Badiur Rahman, additional secretary, economic relations division and leader of the Bangladesh delegation and Ib Petersen, under secretary for bilateral affairs and leader of the Danish delegation signed the minutes Saturday on behalf of their respective governments.
   Niels Severin Munk, Danish Ambassador to Bangladesh, Charlotte Slente, deputy head of Asia department, Danish ministry of foreign affairs, Nargis Islam, joint chief, ERD and other senior officials were present at the signing
   ceremony.
   The consultations before signing of the minutes were held in a constructive and positive atmosphere, an official handout said today.
   The issues like stable macro-economic situation, promotion of private sector development and good governance, including establishment of the Anti-corruption Commission came up for discussion.
   The status of the on-going and pipeline programmes under priority sectors like water supply and sanitation, transport, agriculture and human rights and good governance under the Bangladesh-Denmark development cooperation was also reviewed.
   Ib Petersen appreciated the progress in preparation of the poverty reduction strategy paper and stressed that the paper would be the future framework for Danish Development Cooperation in Bangladesh. The new Country Strategy for the Bangladesh- Denmark Development Cooperation Programme (2005-2009) would be fully aligned with the priorities in the paper, the handout added.
   The Danish delegation head laid emphasis on the real challenge in completing the paper would be to ensure national ownership and financing of its implementation.
   Perersen confirmed that the overall level of Danish assistance in 2005 and the following years would amount to DKK 200 million depending on the degree of ownership, partnership and smooth implementation on the Bangladesh side, as outlined in the agreed principles and partnership obligations.

Poor shipping service is hindering the trade growth between Dhaka and Islamabad.
   The president of Federation of Bangladesh Chamber of Commerce and Industry, Abdul Awal Mintoo, said this while talking to Pakistan high commissioner Manzar Shafiq at the FBCCI building in Dhaka on Monday.
   They discussed expansion of bilateral trade and economic cooperation between the two countries.
   Mintoo said that there was excellent bilateral relation between the two countries but there was lot of potentialities to enhance bilateral trade.
   Shafiq also agreed that the two countries has good trade potential. The envoy requested FBCCI chief to study and analyse the problems of shipping service in order to find out the ways and means to make the service available.
   The ambassador invited FBCCI to lead a business delegation to participate in the ‘Expo Pakistan’, a mega event organised by the Export Promotion Bureau of Pakistan to be held in Karachi during February 2 to 5, 2005.

A two-day international workshop began here today with a call for integrated efforts of shrimp farmers and stakeholders for sustainable shrimp farming in the country.
   Speakers at the inaugural function described the shrimp farming as a major export earner after garments, because some 700,000 people earn their livelihood from this sector. But the country is yet to achieve its target in this sector due to lack of coordinated efforts, they observed.
   The workshop on `Policy Issues for Sustainable Shrimp Farming in Asia' was organised by the Bangladesh Centre for Advanced Studies at the BRAC Centre here under the policy research for sustainable shrimp farming in Asia project.
   This policy research project, a European Commission funded one, has been designed to help Bangladesh, India, Thailand and Vietnam for sustainable shrimp cultivation to face the post-MFA global challenges.
   Experts said Bangladesh will have to convincingly demonstrate that their shrimp is either better or at par with the standards set by the European countries, USA, and Japan along with introducing modern technology in this respect.
   The shrimp production per hectare in Bangladesh is lower among the four countries. If we can use modern technology instead of traditional method our production will increase gradually, they observed.
   Addressing the inaugural function, Secretary of Fisheries and Livestock Iqbal Uddin Ahmed Chwodhury said fisheries industry earns 390 million dollars in terms of revenue income, ranking second to garment sector.
   He said the government has banned collection of shrimp fries from the coastal areas considering degradation of bio-diversity and to maintain ecological balance. The government has also taken alternative programmes for the women who were engaged in this job.
   President of the Bangladesh Frozen Food Exporters Association Dr Aftabuzzaman, however, blamed the non-government organisations for not helping the shrimp growers in due manner.
   Presided over by the senior fellow of the Bangladesh Centre for Advanced Studies, Dr M Eusuf, the inaugural function was also addressed by the director general of fisheries department, Nasir Uddin Ahmed, Md. Liaquat Ali of the advance study centre, the project coordinator, Dr Denis Bailly and the director of the Shrimp Foundation, Dr Mahmudul Karim.
   Delegates from India, Thailand, Vietnam and host Bangladesh are taking part in the workshop.

Premium earning from private sector life insurance companies totaled Tk 1058.95 crore in 2003, marking a 27.98 per cent growth over the last year.
   The earning was Tk 827.43 crore in 2002.
   The gross premium income of private sector general insurance companies increased from Tk 450.69 crore in 2002 to Tk 511.24 crore in 2003, registering a growth of 13.44 per cent.
   The figures were given at the 17th annual general meeting of the Bangladesh Insurance Association in Dhaka Sunday.
   Nasir A Choudhury, outgoing chairman of the association presided over the meeting which was attended by chairmen and managing directors of member companies.
   M Moyeedul Islam, chairman, United Insurance Co Ltd, M A Samad, chairman, Bangladesh General Insurance Co Ltd., M Shamsul Alam, newly elected chairman of the insurance association and managing director of Reliance Insurance Limited and M Haider Chowdhury, newly elected vice-chairman of the association and chairman of National Life Insurance Co Ltd were present among others.

Readymade garment (RMG) industry owners should give trade union rights and all necessary facilities to the labourers and employees in the greater interest of their own as well as the workers.
   Education Secretary of the International Textile Garment and Leather Workers Federation (ITGLWF) Steve Grinter expressed the view at a workers’ rally organised by the Bangladesh National Council (BNC) of Textile Garment and Leather Workers at Keraniganj industrial area on the outskirts of the city Monday.
   Chaired by local workers’ leader Khalilur Rahman, the rally was addressed, among others, by BNC leaders Badruddoza Nizam, ZM Karnrul Anam and Nurul Islam.
   Grinter said as the earner of the 76 per cent foreign exchange of the country the sector is set to face a competitive global market after the removal of the quota system from January 1, 2005.
   In today’s international market, the buyers eye total working atmosphere in the industry side by side with the quality of commodities, the ITGLWF education secretary mentioned.
   In his speech, Badruddoza Nizarn congratulated ITGLWF General Secretary Neil Kearney for his contribution to country’s millions of garment workers by campaigning in global forums for the survival of garment business in the international market.
   Only combined efforts of government, garment owners and workers can save the industry in the post-MFA (Multi-Fibre Arrangement) era, the BNC leader said.
   Nurul Islam said RMG workers are a very important portion of the country’s employment market. So the government should take special care for them.

Lloyds TSB said Monday that it expected to deliver a satisfactory trading performance for 2004 and that earnings at the UK bank would be broadly in line with consensus analyst expectations of about £3.33bn ($6.4bn).
   The bank added that it would make further provisions of £110m this year for compensating customers who had been sold endowment policies. Many UK banks have been making such provisions in the face of growing complaints from the more than 700,000 people whose endowment policies are unlikely to cover their mortgages.
   "Despite this provision, Lloyds TSB expects to report earnings broadly in line with current market expectations," the bank said.
   In a trading statement ahead of its end of year meeting with analysts, the bank said earnings momentum was being maintained despite a slowdown in the consumer credit boom.
   "Despite the slowdown in growth in demand for consumer credit, we are continuing to make progress against our objective to deliver sustained earnings momentum," said Eric Daniels, chief executive.
   The bank also said that its focus on higher quality lending had led to an improvement in credit quality and that its full-year charge for bad debts as a percentage of lending was likely to be lower than the 0.63 per cent in the first half of this year.
   The forecast for 2004 earnings is less than the £3.38bn seen in 2003. While predicting "further progress" for earnings in 2005, the bank also said that the introduction of International Financial Reporting Standards next year would hit profits by about 5 per cent.

A meeting of the audit committee of the Board of Mutual Trust Bank Ltd was held recently, says a press release.
   Anjan Chowdhury, chairman of the audit committee, presided over the meeting.
   The meeting discussed performance of the audit activities of the bank for the year 2004.
   Hedayetullah, vice-chairman, Mosharraf Hossain, managing director, Quamrul Islam Chowdhury, board secretary, were also present in the meeting.

Bank of Japan Governor Toshihiko Fukui repeated today that Japan’s economy was going through a temporary slowdown, and that he still expected it to move to a sustainable growth path.
   “Recently, some weak economic indicators have emerged in exports and production ... but the slowdown is temporary, and the likelihood of the economy gradually shifting to a sustainable growth path is high,” he told business leaders in the western city of Nagoya.
   Fukui added that the BOJ needed to closely watch the impact of foreign exchange movements. The dollar has recently fallen against most of the world’s currencies, making Japan’s exports expensive in its largest overseas market.
   “The foreign exchange market as well as other markets tends to move in short-term, speculative ways, so we need to carefully watch movements in the foreign exchange market and how they would affect the economy.”
   He also cited demand in the information technology sector and crude oil prices as possible downside risks to the economy.
   Fukui said revised gross domestic product (GDP) data, which was recalculated last week to more accurately reflect price changes, will not greatly affect the BOJ’s economic assessment.
   Revised July-September GDP grew a mere 0.1 per cent in real price- adjusted terms from the previous quarter, after contracting 0.1 per cent in April-June, the revised data showed.
   Fukui said the domestic economic recovery would remain intact, citing an expected rebound in exports and production as overseas economies were expected to resume further growth, and a rise in capital spending thanks to firm corporate profits.
   Personal consumption would also gradually rise, supported by steady sentiment and backed by improvements in wages, he said.
   “As for corporate profits and capital investment, including moves among small- and medium-sized firms and non-manufacturers, we will closely monitor them, taking into account the results of the ‘tankan’ survey due out the day after tomorrow,” he said.
   The survey covers business sentiment and capital spending plans. A Reuters poll of 27 economists last week produced a median forecast of 23 for the diffusion index of large manufacturers’ sentiment, down 3 points from 26 in the last survey, which had been the highest reading since the early 1990s.
   On monetary policy, Fukui reiterated the central bank would act with latitude when deciding its next policy move.
   “Everything depends on future economic and price movements,” he said.
   “But if conditions continue where prices are not reacting to economic activity, there is room for various policy options and we can take appropriate action depending on the situation.
   “For example, one option is to continue our quantitative easing policy as long as possible, or we could make the pace of rises in interest rates gradual after ending quantitative easing.”
   “At this point, it is not clear what kind of option is more appropriate but, in any case, we don’t have to rush the process.
   This is what we mean when we say we will act with latitude.”
   Under the quantitative easing policy, the BOJ floods the banking system with excess liquidity in an attempt to encourage business activity. A huge surplus in funds means short-term interest rates are stuck at virtually zero, sometimes even becoming negative.
   The BOJ has said it would keep the framework until year-on- year changes in the core consumer price index (CPI) rise above zero.
   Core CPI has remained slightly negative, although the BOJ has forecast a slight rise for the year starting in April.

China will impose tariffs on some textile exports in a move that may ease concerns by the United States and others over a flood of Chinese goods on world markets after a global quota system expires at year’s end.
   The move, reported by state media today, was one of eight measures announced by the Commerce Ministry to help the industry adjust smoothly to freer trade.
   The ministry did not say which products would be subject to the new tariffs, but said the duties would be based on quantity rather than value. “We hope that by adopting this measure, we can encourage the export of high-value products and further optimise the structure of China’s textile export industry,” the ministry said.
   Other steps include having textile firms report their planned investments, encouraging them to invest abroad, and fostering the development of domestic brands to boost competitiveness.
   China made 17 per cent of the world’s textiles and clothes in 2003, but the World Trade Organisation sees that soaring to more than 50 per cent within three years when a decades-old quota system expires on Jan. 1, 2005.
   The prospect of China’s swift rise in world textile trade has alarmed the United States, which is considering import tariffs to protect domestic textile makers against an expected inflow of cheaper Chinese goods.
   Last week, the European Commission urged China to wield its textile clout with moderation so as to avoid disrupting the economies of smaller developing nations that rely heavily on the textile trade.

China’s retail sales rose higher than expected in November, fueling hopes consumption could buffer an investment slowdown aimed at cooling the heated economy.
   Retail sales climbed 13.9 per cent in the 12 months through November, official data showed today, compared with economists’ forecast of a median 13.2 per cent rise in a Reuters survey and moderating from October’s 14.2 per cent increase.
   China has attempted to softly brake growth in the world’s No.7 economy since last year, so that boom does not turn to bust.
   Recent official figures showed inflation fell sharply in November while factory output growth decelerated to its slowest pace in 18 months, supporting evidence that government measures to curb growth have taken effect.
   However, resilient retail sales and growth in exports suggest an eventual soft landing, analysts said.
   Retail sales growth hit a 5-month high in October, as consumer prices and incomes climbed.
   In November, demand for hot-ticket items like mobile phones and cars led the rise. Sales of telecom equipment surged 36.3 per cent on the year and car sales jumped 11.8 per cent.
   Sales of oil and petroleum products were up 42.6 per cent from a year earlier, while those for home construction and improvement materials were up 50.6 per cent, the National Bureau of Statistics said in a statement.

The Netherlands, the European Union’s president, has delayed for now a clash between new and some “old” member states over the EU budget that threatened to cloud a Dec. 16-17 summit, diplomats said yesterday.
   They said Spain and Italy, which are now among the major beneficiaries of EU funds, were increasingly at odds with a coalition of newcomers led by Poland about ways of dividing the bloc’s massive regional aid in the 2007-2013 budget.
   The issue became so sensitive recently that the Netherlands, which holds the EU’s rotating presidency until the end of 2004, removed all references to the method of dividing the aid from its latest draft statement for the summit.
   “The statement for the summit, in its part devoted to the budgetary perspective (2007-2013 budget), has been watered down so much that it should no longer cause any controversy,” an EU diplomat said.
   The softer language on the EU’s long-term budget, due to be approved by EU foreign ministers on Monday, will allow the bloc’s leaders to focus on another contested issue — opening entry talks with Turkey.
   “The true battle over the budget will probably come in the spring,” the diplomat said.
   The conflict over the budget pits, on the one hand, six EU net payers — Austria, Britain, France, Germany, Sweden and the Netherlands — against the EU’s executive Commission and net beneficiaries of the bloc’s budget.
   The Commission has proposed to set spending at 1.14 per cent of gross national income (GNI) on average in 2007-2013, or some 1 trillion euros for the period, while six paymasters want to cap expenditure at 1.0 per cent of GNI, or 815 billion euros.
   Britain’s insistence that its cherished rebate from EU coffers must be preserved could exacerbate the conflict.
   On the other hand, the budget dispute divides “old” EU members who received the bulk of EU aid — such as Spain, Portugal and Greece — and the east European countries which joined the bloc in May.
   The six paymasters say that after 2007 EU aid should go mostly to newcomers, whose economies were devastated by decades of communist rule, but diplomats said Spain has launched a diplomatic offensive to salvage funds for itself.
   This is why Spain, backed by Italy, one week ago won removal of “solidarity” as the guiding principle in the draft for distributing EU aid funds to meet the “particular needs” of the 10 new joiners.
   In retaliation, Poland, Slovakia, the Czech Republic, Hungary and some others insisted on removing all references to dividing the funds.
   The latest Dutch draft still makes a clear commitment to try to reach a deal on the budget by mid-2005 and prevent negotiations from dragging into 2006, which the Commission says would disrupt large EU aid projects.
   About 40 per cent of the Union spending is earmarked for farm assistance and one-third for regional aid to build roads, clean up the environment and create jobs.

Oil prices climbed above $41 a barrel today after Saudi Arabia cut January crude deliveries to clients in Asia, confirming that the top exporter was adhering to OPEC’s agreement last week to curb excess supply.
   US light crude rose 30 cents to $41.01 a barrel, while London’s Brent crude traded 42 cents higher to $37.80 a barrel.
   Oil fell to a near five-month low on Friday on doubts over OPEC’s resolve to rein in 1 million barrels of daily output, and as Iraqi exports to the Turkish port of Ceyhan resumed after a 12-day stoppage due to sabotage.
   Refiners in Japan, the world’s third biggest oil consumer which imports virtually all of its needs, said on Monday they had been told by Saudi Arabia that supplies would be chopped by 8 per cent in January versus December volumes.
   South Korean refiners said they, too, faced an 8 per cent cut in Saudi supplies. “Saudi’s 8 per cent cut was a very quick move,” said Tetsu Emori, chief strategist at Mitsui Bussan Futures in Tokyo. “It cannot be neglected as we are now in the peak winter season, however mild the weather has been this year.”
   OPEC ministers agreed on Friday in Cairo to curb output.
   They said they would withdraw 1 million barrels a day (bpd) of production — around 3.5 per cent of current supply — from January 1.
   Saudi Arabia is to take the biggest cut, at 500,000 bpd.
   The Organisation of the Petroleum Exporting Countries had been pumping well above its 27 million bpd formal target this year to cool a price surge that saw US crude hit a record $55.67 a barrel in late October.
   But prices have fallen sharply since then, tumbling about 25 per cent as oil stocks have risen, and OPEC ministers feared a surplus of supply could bring the market down further, especially in the second quarter when demand usually falls after winter.

Long a symbol of protectionism, Japanese agriculture is finding attack the best form of defense.
   Japanese farmers are on a drive to boost exports of expensive fruits to growingly rich neighbors such as China, as Japan seeks free trade deals in Asia and sees domestic consumption of its juicy delicacies plunge.
   Upscale shoppers abroad are proving they are willing to pay higher prices for Japanese fruits, which are renowned for their impeccable shape and taste and grown traditionally with few chemicals, trade officials said.
   The southern Japanese prefecture of Saga hopes to export strawberries for the first time to China, where they are expected to sell for twice or more as much as locally grown varieties.
   “The Chinese market looks promising but uncultivated yet,” said Hirokazu Tajima, a municipal official in charge of farm products distribution.
   The prefecture is eyeing Shanghai and other coastal areas for its strawberries and is undaunted by Chinese tariffs of more than 20 per cent. But lengthy red tape is still in store to enter the
   Chinese market, Tajima said.
   “We are in anxious suspense for the approval as we want to export strawberries by Chinese New Year which falls on February 9,” he said.
   Many Asians have the custom of sending fruits as gifts and the Chinese New Year is a big business opportunity.
   In Japan, fruits tend to be regarded not as snacks but as top-end goods to be presented daintily as desserts or on formal occasions.
   But younger Japanese are increasingly preferring candy and other processed foods. Daily fruit consumption in Japan fell by more than 35 per cent from 1975 to 124 grams (4.3 ounces) per person in 2002, according to the government’s latest nutrition survey.
   The Japanese have cited the care provided to their produce when defending the subsidies and trade protection allocated to agriculture, one of Japan’s sectors that is most closed to foreign competitors. -MORE/SI/1020 HRS
   By the same argument, Japanese fruits were until recently
   seen as too costly to be worth a more aggressive export push.
   But “demand for Japanese fruits on Asian markets is growing as the number of high-income people is increasing,” said Mari Izumi, who heads the export promotion office set up in April at the Agriculture, Forestry and Fisheries Ministry.
   Possible free trade accords with Asian countries “could give (Japanese farmers) business opportunities if they can help lower tariffs and other barriers and open up sales routes,” she said.
   Japan only has free trade pacts with Singapore and Mexico, but the accord with Singapore excludes the sensitive issue of agriculture. Japan’s exports of farm, forestry and fisheries products came to 278.9 billion yen (2.66 billion dollars) in 2003, according to official data.
   Shipments to mainland China have jumped nearly tenfold to 300.9 million dollars from 1989, with exports in the period up 33 per cent to Hong Kong, 67 per cent to Thailand and a full 267 per cent to South Korea.
   Asian countries accounted for 72 per cent of the top 10 importers of Japanese farm and forest products in 2003, up from 59 per cent in 1989.
   Japan’s top apple exporter is the northern prefecture of
   Aomori whose leading customer is Taiwan, especially after the island acceded to the World Trade Organization in 2002 and scrapped its import quota.

Vietnam, the world’s second- largest rice exporter, expects to harvest 35.7 million tonnes of paddy this year, up 3.5 per cent from last year, state media said today.
   The agriculture ministry attributed the rising output of paddy, or unhusked rice, to higher yields, while the |growing area has been cut slightly to 7.35 million hectares (18.2
   million acres), the official
   Nhan Dan (People) daily reported.
   The ministry said Vietnam’s key winter-spring crop ending in April produced a record
   17 million tonnes as the average yield was raised to 5.7 tonnes per hectare, from 5.6 tonnes
   the same crop last year. Most of the crop’s grain is used for export.
   Vietnam grows three rice crops a year, the main spring crop, a summer-autumn crop, and a third, minor crop near the year-end.

Federal Reserve officials are expected to nudge interest rates up on Tuesday for a fifth time this year, another small step in a campaign to gradually lift borrowing costs before inflation rears its head.
   The Fed has raised overnight borrowing costs by a quarter- per centage point at each of its last four policy sessions, and analysts are unanimous in the view that a fifth small hike will come when officials meet this week.
   Economists are almost equally certain the Fed will restate its view that risks to economic growth and inflation are in balance when it announces its rate decision.
   Another quarter-point move would take the bellwether federal funds rate, which banks charge each other for overnight loans, to 2.25 per cent — a level analysts said is still low enough to offer an economic boost.
   “Right now there really isn’t much debate about what the Fed’s doing because the funds rate is still quite low,” said James Glassman, senior
   US economist at J.P. Morgan Chase.
   Economists said, while the Fed’s decision on Tuesday is a relatively easy one, the central bank will face increasingly tough calls as rates rise, with incoming data carrying more and more weight in its deliberations.
   “It’s largely a no-brainer in December and ... I think there will still be strong sentiment to tighten in February,” said Michael Moran, chief economist at Daiwa Securities America.
   “After February, I think it’s almost totally data-dependent with the bias toward moving.”
   The Fed began raising its benchmark rate in June from an extremely low 1 per cent, where it stood after 13 cuts that helped the economy through the 2001 recession and shaky subsequent recovery.
   Recently, economic data have been mixed, but most economists continue to look for solid growth next year and expect the Fed to slowly push rates up toward 3 per cent.
   US employers added 112,000 workers to their payrolls last month, but that unexpectedly weak reading followed a hearty 303,000-job gain in October.
   In addition, analysts say the holiday shopping season is shaping up to be a potential disappointment. But oil costs have fallen in recent weeks from record highs and mortgage and other long-term borrowing rates are still low by historic standards.

Ending 18 months of bad blood, Oracle Corp raised its takeover bid for bitter rival PeopleSoft Inc by 10 per centto seal a $10.3 billion deal that will create the world's second largest maker of business applications software.
   The agreement, announced Monday, caps a rancorous Silicon Valley feud marked by churlish exchanges between the companies' management teams and colorful courtroom battles.
   Redwood Shores-based Oracle brought an end to the hostilities by sweetening its all-cash offer to $26.50 per share, up from a $24 bid that PeopleSoft's board had rejected as inadequate. The final offer represents a 75 per centpremium from PeopleSoft's market value before Oracle launched the takeover battle in June 2003.
   "This is a major turning point for the entire enterprise software industry," Oracle co-president Charles Phillips said during a Monday conference call with investors.
   By picking up 12,750 PeopleSoft customers and more than $2 billion in annual revenue, Oracle hopes to mount a more serious challenge to German software maker SAP's leadership in business applications software - the computer coding that automates a wide range of administrative tasks. Oracle plans to complete the takeover next month.
   "This is a coup for Oracle," AMR Research analyst Jim Shepherd said. "While there were other acquisitions that interested them, none could do for them what this will do."
   Oracle eventually hopes to buy other tech companies, but won't consider any other large acquisitions until PeopleSoft is fully digested, Oracle CEO Larry Ellison assured analysts during a conference call Monday.
   The fate of PeopleSoft's roughly 12,000 employees remains unclear. Oracle at one point drew up plans to fire more than 6,000 PeopleSoft workers, but the company recently has indicated that the purge might not be as dramatic as management originally envisioned.
   Keeping PeopleSoft's employees happy won't be as important to Oracle as pleasing most of the customers that it will inherit, Shepherd said.
   For the deal to make financial sense, Oracle needs to keep collecting a steady stream of revenue for maintaining and upgrading the software of PeopleSoft customers. Some PeopleSoft customers have expressed serious reservations about the deal, threatening to either defect to SAP or another company specialising in software support.
   News of the long-delayed deal overshadowed the release of Oracle's financial results for the quarter ended Nov. 30. The company earned $815 million, or 16 cents per share, a 32 per centincrease from $617 million, or 12 cents per share, at the same time last year. The earnings per share were two cents above the mean estimate among analysts surveyed by Thomson First Call.
   Oracle's revenue rose 10 per centin the quarter to $2.76 billion from $2.5 billion a year ago.
   Pleasanton-based PeopleSoft had stubbornly resisted Oracle's overtures, maintaining that it could do a better job taking care of its customers than its longtime rival.

ATDP competition on business plan held
The regional agri-business plan competition ‘Agripreneur -2004’ of Chittagong region was held recently. The event was organised by Agro-based Industries and Technology Development Project -phase-2 (ATDP-2). ATDP officials at a press conference in Chittagong Monday said such competition was also held in different regions of the country for increasing the efficiency and creativity of the entrepreneurs and businessmen engaged in agro-business sector. ATDP is a joint project of the USAID and the Bangladesh government which is working as business service provider to promote growth of privately owned agri-businesses in the country. Regional agro-business manager of ATDP-2, Rafique Sarker, and president of the Chittagong Women Entrepreneurs, Monwara Hakim Ali, spoke at the press conference held at the Chittagong Press Club. Ten out of 50 entrepreneurs participated in the competition have been selected for prizes. Of the 10, first three top entrepreneurs would get prize money of Tk 50,000, Tk 30,000 and Tk 20,000 respectively and others would be given certificates and crests. The fisheries and livestock minister, Abdullah Al Noman, is scheduled to attend the prize giving ceremony to be held at a local hotel on Wednesday as chief guest, the organisers said.
— BSS

CSE closes down
The price indices on the Chittagong Stock Exchange (CSE) experienced a mix for the second consecutive day Monday as the losers outnumbered the gainers. CSE All Share Price Index Monday decreased by 5.46 points or 0.15 per cent to close at 3510.33 points from Sunday’s 3515.79 points. CSE-30 Index, however, increased by 7.14 points or 0.20 per cent to close at 3439.45 points from 3432.54 points on the previous trading day. Some 1,424,256 shares and debenture worth about Tk 11.07 crore changed hands Monday against 1,333,893 shares and debenture worth about Tk 11.02 crore on Sunday. A total of 83 listed issues traded Monday, of them 32 gained, 44 declined and seven remained unchanged. Market capitalisation stood at Tk 209.93 billion against Tk 210.66 billion on Sunday.
— UNB

Repo auction held
The repo auction of the Bangladesh Bank for commercial banks and financial institutions held on Monday .Two bids of 1-day tenor amounting to total of Tk 456.50 crore were received but those were not accepted, said a BB press release.
— UNB

WTO nod for Iraq, Afghanistan membership talks
The World Trade Organisation’s 148 member states approved on Monday requests by Afghanistan and Iraq to open membership negotiations during a meeting at WTO headquarters, trade sources said. “The General Council has agreed to gather a working group to study Iraq’s application,” the trade source said during a meeting of the WTO’s top executive body, adding that it had taken the same step for Afghanistan’s bid.
— AFP

Coke, rivals see market for flavored water
Since the 1990s, bottled water has become a fixture in American health clubs, offices and sports stadiums, emerging as one of the most popular and fast-growing drinks on the market. Now, Coca-Cola Co., PepsiCo Inc. and Nestle are betting that flavored water will find a sweet spot among US consumers who find the plain variety a bit boring. Lemon and raspberry versions of Coke’s Dasani water brand will begin arriving in US stores in the first quarter of 2005, according to officials with the world’s largest soft drinks maker. “This would appeal to people who don’t want to drink the same water all the time,” said Ray Crockett, a spokesman for Coke’s Dasani brand. “We have research that indicates consumers like flavored waters.” PepsiCo, Coca-Cola’s main rival, also has announced that it will launch a new Aquafina water drink called FlavorSplash next year. The product will come in raspberry, wild berry and citrus flavors.
— Reuters

Tommy Hilfiger steps into Lagerfeld clothes
The US ready-to-wear fashion label Tommy Hilfiger is to acquire brands owned by Karl Lagerfeld, Tommy Hilfiger said on Monday without providing price details. The takeover would not cover agreements between Karl Lagerfeld and fashion names Chanel and Fendi, the statement said.
— AFP

Fiat and GM set for showdown
Fiat and General Motors head for a showdown this week as a one-year truce expires, opening the way for them to go to court over whether Fiat can force the US group to buy its loss-mired car unit. Both sides are playing hardball over the Fiat Auto put option and the atmosphere will be charged when top managers meet in Zurich on Tuesday, a day before the moratorium ends. Italian industrial group Fiat has an option to sell its 90 per cent share of Fiat Auto to GM from January 24. GM argues the put option was invalidated by the sale of part of Fiat Auto’s financing arm Fidis and a capital injection Fiat gave to keep its carmaker going through a crisis. Fiat CEO Sergio Marchionne rejects that and last week raised the rhetoric, saying there was a “real live possibility” of exercising the put to GM, which owns 10 per cent of Fiat Auto. Sources close to Fiat say Marchionne could take GM to court to prove the validity of the put, a key part of Fiat’s valuation and a parachute that persuaded banks to fund its restructuring.
— Reuters

Motorola gets China Unicom contract
Wireless technology company Motorola Inc said on Sunday it had been selected by China United Telecommunications Corp. (China Unicom) for a project that will expand the telephone services company’s networks in 11 provinces. The equipment would help China Unicom offer better voice calls, high-speed multimedia services and wireless applications to its customers, said Motorola, which has been the company’s largest wireless-system supplier since 1994. China Unicom awarded Motorola multiple contracts, totaling $344 million of orders, during the past six months.
— Reuters