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The Bangladesh Bank has stressed that commercial banks must be prudent in foreign exchange treasury management to avoid any destabilisation in the already volatile forex market.
   The central bank put the suggestion on Tuesday at a meeting with private bankers and again made its position clear that it would refrain from intervening directly in the currency market.
   Deputy governor Allah Malik Kazemi presided over the meeting, attended by the chief executives and fund managers of first generation private commercial banks.
   Meeting sources said the Bangladesh Bank stood rigid on its stance not to channel dollar from its reserve, which is already under pressure.
   Rather, it blamed some banks for inefficient handling of foreign exchange, contributing to the recent volatility.
   It advised the banks to improve their treasury management and exercise some restraints instead of looking for dollar from the central bank.
   ‘You have to manage your treasury prudently and remain extra cautious in foreign exchange transaction,’ a senior official of the central bank was quoted to have told the meeting.
   The private bank executives felt that the Bangladesh Foreign Exchange Dealers Association should play a more active role to facilitate effective interactions among the market players to cool down the currency market.
   The meeting also discussed issues relating to difficulties in opening and settling import letters of credit, as reported by a section of traders.
   The meeting was represented by Uttara Bank, Pubali Bank, AB Bank, IFIC Bank, National Bank, City Bank, United Commercial Bank Ltd and Oriental Bank.
   At a separate meeting on Sunday, the Bangladesh Bank asked 22 private commercial banks of second and third generations to review their own fund positions before opening L/Cs for imports.

The commercial banks have raised their interest rates on both deposits and advances by up to 2.55 percentage points in July in line with a central bank directive, official sources said.
   The increases in interest on deposits were between 0.55 and 2.55 percentage points, while that on advances ranged between 0.5 and 2.5 percentage points, sources at the Bangladesh Bank said.
   Nine commercial banks have increased interest rates on fixed deposit receipts of different terms, while another bank reduced interest on FDR. Six banks have raised the interest rates on advances.
   The Rupali Bank Ltd., Premier Bank Ltd., Brac Bank Ltd., Citibank NA, Standard Chartered Bank and Exim Bank Ltd raised interest rates on working capital by 0.5 to 2.5 percentage points.
   Premier Bank, Rupali Bank, Exim Bank and StanChart raised the interest rates on loans to large and medium scale industries by 0.5 to 1.75 percentage points.
   Interest rates on trade financing have also been raised by one to 2.5 percentage points by Premier, Rupali, Exim, StanChart. The Exim Bank reduced the interest rate on housing loan by two percentage points and Premier by one percentage point.
   Three banks, Rupali, Premier and Exim, raised the interest rates on small industries by one percentage point.
   Only StanChart raised interest rate on agricultural lending. The Premier bank raised interest on consumer credit.
   The Citibank NA raised the interest rate on FDRs of two-year term and above by 2.55 percentage points. The overall interest rates on FDR of different terms were raised by 0.25 to 2.55 percentage points.
   United Commercial Bank Ltd, Prime Bank Ltd., One Bank Ltd., Premier Bank Ltd, First Security Bank Ltd., Mutual Trust Bank Ltd., HSBC have raised their rates on FDRs of three months and above, while Exim Bank reduced the rates on FDRs.

The Finance and Planning Minister, M Saifur Rahman, on Tuesday emphasised banking investment in productive sectors, including agriculture and agro-processing, to generate employment opportunities and boost farm output.
   ‘It’s not possible to import essentials like onion, garlic and ginger for long to meet the demand of 140 million people,’ he said, asking the commercial banks to come up with enhanced investment for the agriculture and other productive sectors.
   He was talking to reporters after receiving a dividend of Tk 18.56 crore from Bangladesh Small Industries and Commerce Bank Limited (BASIC) at his Planning Ministry office.
   Saifur said the government has undertaken budgetary measures to provide bank loans to farmers at only 2 per cent interest rate. ‘It’s to help promote the agriculture sector entrepreneurs,’ he said.
   The minister appreciated BASIC bank’s contributions and criticised nationalised commercial banks for their poor performance.
   The BASIC bank handed over a cheque for Tk 5.06 crore and bonus shares of Tk 13.50 crore. It declared 27.5 per cent dividend for the year 2004.
   Chairman of the bank’s Board of Directors and Industries Secretary Mohammed Nurul Amin and Managing Director AH Iqbal handed over the cheque and share certificates to the minister.
   They apprised the minister that the bank’s loan recovery rate is 97 per cent.

India’s appetite for gold has been poor but is expected to sharply increase in a month with the start of festivals that fuel buying in the world’s top market for the yellow metal, traders said.
   Dealers and jewellers are sitting quiet despite attractive spot prices as farmers, who account for two-thirds of retail purchases, are busy sowing winter crops and a seasonal lack of marriages means there is little wedding-related buying.
   ‘Nothing is happening now. We are literally sitting idle,’ said a bullion dealer in the western city of Madras, a leading market for gold and silver.
   Dealers estimate daily gold demand in Bombay at 200 to 300 kg against an average of 1,000 kg, while it was just 50 kg in Madras compared with 200 kg normally and less than one-third an average of 1,500 tonnes in the western city of Ahmedabad.
   Dealers said the demand was mainly from jewellers and small investors taking advantage of lower prices to replenish stocks. Regular buyers were on the sidelines.
   Spot gold was trading at about $422 an ounce, down from $440 some three weeks ago.
   Dealers said a one-month inauspicious period, called Aadi, also dampened buying in south India, with people avoiding gold purchases, beginning new ventures or organising religious events. The period started on Saturday.
   There was little demand in rural areas as farmers have been spending their surplus money on seeds and fertilisers. Urban demand was also limited as more money was spent on books and uniforms for children at the start of a new academic session.
   The situation has been made worse by floods in parts of Gujarat in western India and patchy monsoon rains in some areas of the central state of Madhya Pradesh, forcing farmers to go for resowing of crops that are harvested in October and November.
   Gold demand should remain bullish and peak in November with Diwali, the Hindu festival of lights, traders said.
   People consider gold an auspicious metal and like to buy or gift it during religious festivals. Jewellery and coins account for 85 per cent of Indian gold purchases.

Apparel makers on Tuesday rejected the allegation made by textile millers that a sizeable portion of duty-free fabrics imported for export-oriented garment factories is leaked into market, hitting the local industry hard.
   The Bangladesh Garment Manufacturers and Exporters Association demanded that the Bangladesh Textile Mills Association must withdraw such ‘baseless and intentional’ allegations, or face legal actions.
   The BGMEA president, Annisul Huq, claimed that there is no scope of misusing imported fabrics since the procurement is based on need assessed through a transparent process of delivering UDs (utilisation declaration).
   ‘There is no scope to import excess fabrics as the BGMEA along with the customs authorities assess the factories’ actual fabric needs and closely monitor the utilisation process,’ he told a press conference in Dhaka.
   ‘Before awarding UDs, a committee of the BGMEA scrutinises the letters of the credit of exporters, invoices, order-sheets and then assess the fabric requirement of the factories concerned,’ he said.
   The textile millers’ association on Saturday alleged that duty-free imported fabrics, leaked from bonded warehouses, flooded the market, throwing the local textile industry in jeopardy. Imported fabrics worth at least $1.5 billion come to local market this way every year, they claimed at a press conference.
   Garment sector leaders categorically denied their involvement in such illegal trade in imported fabrics and cheaper dresses that cost the local products.
   ‘There are several hundred miles of open border, which is enough for sarees, fabrics and many such items to be smuggled into the country,’ said Tipu Munshi, a director of the BGMEA.
   Annisul Huq said bonded warehouse facility has ensured smooth supply of fabrics to garment factories and helped them sustain export growth during the last two decades since the fabric supply capacity of the local textile industry is very low.
   He charged the textile association with conspiring for cancelling the bonded warehouse facility and warned that ‘withdrawal of bonded warehouse facility would lead to collapse of the woven garment sector.’
   The BGMEA president pointed out that local textile millers charge higher rate for fabrics and yarns, which raise the production cost of local apparels and make them less competitive in global market.
   Cost of local fabric is 20 to 30 per cent higher than imported fabric, said Annisul Huq, citing that local twill fabric costs $1.45 a yard against import price of $1.22, while price of local denim is $1.5 a yard against $1.25 of imported one.
   ‘We have to buy one kilogram of yarn for $2.30 from the local spinning mills while it is available at $2.05 at import level and $1.90 in open market,’ said the BGMEA president.
   Yet, he added, dressmakers use local yarn to meet the local value addition requirement for availing of the European Union’s trade concession under generalised system of preferences (GSP).
   He informed that during January-May period woven garment export fell by 5.47 per cent globally and 8.04 per cent in EU market due to steep decline in price.

The DHL Express Bangladesh has been awarded an Asia Category ‘A’ certification from the Technology Asset Protection Association for its modern Motijhil Service Centre.
   Before certification, the TAPA authorities assessed the service centre in the areas of warehousing, site security, working environment, training, access control, secure storage, alarm control, close-circuit video security systems and on-road transportation.
   Adrian Whelan, regional security director of the DHL Express Asia Pacific zone, disclosed it at a press conference on Tuesday at a city hotel.
   Located in a prime commercial location in Dhaka, the centre provides express cargo and freight forwarding facilities in the country satisfying TAPA’s stringent international standards of safety and security, said the country manager, Desmond Quiah, at the briefing.
   Desmond said that the TAPA Asia certification paves the way for setting a new height in industry standards for security. Over 8,50,000 shipments were carried out by the DHL Bangladesh last year, he said
   Among others, the company’s national operations manager, Stanford Tabarias, and security manager of DHL South Asia, Edward Goh, were present.
   TAPA is a non-profit organisation set up by representatives from the manufacturing and high-tech industries, freight forwarders and professionals consulting companies.
   The association aims to guarantee high security standards in the freight transportation of high-value technology products and to minimise monetary or asset losses during the shipment process.

Denmark will provide grant amounting to 4.89 million kroner equivalent to Tk 5.1 crore for training, technical assistance and export promotion to support establishment of an offshore software development centre.
   It is a joint venture between the Netpeople A/S, Denmark and the Nizamcorp Resource Gateway Limited, Bangladesh.
   The Danish Ambassador to Bangladesh, Niels Severin Munk, approved the grant as part pf the Danida private sector development programme.
   The cooperation is expected to train the Bangladeshi programmers and project managers in the latest development methodologies and the domain of knowledge within the areas of advertising and marketing in order to satisfy European clients demanding high quality software solutions.

Small amounts of loan along with some training helped nearly 25,000 urban-based poor women to emerge as entrepreneurs elevating their status and setting examples for fellow women.
   Nasreen Subedar of Dhaka's north Jatrabari area is one of them who received an amount of only Tk 20,000 some 10 years ago and to her utter surprise, she soon found her earning the same amount of money every month.
   Thirty-year old Nasreen was desperately looking for a job after her husband became unemployed in 1994, when Jatiya Mahila Sangstha approached her with the offer of free training and micro-credit.
   'The four months of training on embroidery and sewing and the amount of Tk 20,000 changed my life,' she said.
   JMS so far offered training to nearly 30,000 poor women and 25,000 of them are now listed as successful entrepreneurs, with the help of micro-credit, ranging between Tk 5,000 and Tk 20,000 and three to four months of training, said Mashiur Rahman, the director of JMS's development of urban women project.
   They have kept the mark of success in the fields of sewing and embroidery, shoemaking, manufacturing of products, like soap and candles, packaging and binding, traditional nakshi kantha, food processing and preservation, block batik and screen printing and computer operations, he said.
   Rahman said the recovery rate of the loan was 94 per cent, which again showed the sincere entrepreneurship of the poor women, against the backdrop of the default culture among big enterprises.
   Twenty-five years old Renu Huq of Shahjahanpur in the capital is another success story for the organisation.
   Being a member of a family of seven with her father being the lone income source, she too was looking for a job after her graduation, when JMS opened a training centre at the area on making soap and candle.
   She got admitted and on completion of a four-month training, she got Tk 20,000 as loan to start a business. She set up her small cottage industry at her home and started marketing the product at the local market.
   Presently, she makes a monthly profit of at least Tk 5,000, after meeting the other costs.
   Another women entrepreneur of the city Demra area is Laizu Akhtar.
   Immediately after her marriage, when she came to know that her husband was an unemployed, she started a small home-based business of block and batik printing in order to maintain the family.
   Getting to know about the organisation, where she would get free training on screen and block printing, she opted for that and after completing the training, she was given a loan of the same amount like others for strengthening her business.
   Today, Laizu participates regularly in the local and national trade fairs and supply her products at the JMS show room.
   Her monthly income has reached Tk 10,000 a month, which is five times higher than what she used to get before the training.
   The JMS officials said the government had funded Tk 9.90 crore on the third phase of project running currently, through 32 centres in Dhaka, five other divisional head quarters and seven districts.

The 42nd meeting of the board of directors of The Premier Bank Limited was held on Monday at its head office in Dhaka.
   Presided over by the chairman of the board, HBM Iqbal, the meeting reviewed the overall performance of the bank in the first six months of 2005.
   The total deposit of the bank stood at Tk 1,773.15 crore from Tk 1,420.28 crore of the previous year's corresponding period and loans and advances at Tk 1,675.46 crore from Tk 1,196.22 crore, marking a growth rate of 24.85 per cent and 40.06 per cent respectively.
   The Bangladesh Bank observer, Mir Abdur Rahim, the bank's vice-chairman and chairman of the board's audit committee, BH Haroon, and other senior officials of the bank, also attended the meeting.

The recommendation of the City Bank Limited board of directors, for 50 per cent stock dividend (one bonus share for every two shares) made in the 22nd annual general meeting, held on July 14, was approved by all the shareholders those attended the meeting.
   The AGM was presided over by the bank chairman, Deen Mohammad, said a release.

The chairman of Hosaf Group, Moazzam Hossain, has been elected as the president of Bangladesh Energy Companies Association.
   The new executive committee members were elected at the annual general meeting of the association held on Tuesday in Dhaka, where Azam J Chowdhury, Rashed Mahmud and ASM Mainuddin Monem, were made the vice-presidents, said a press release.

The 403rd meeting of board of directors of Bangladesh Krishi Bank was held at the bank's head office in Dhaka on Sunday.
   The meeting presided over by the chairman of the board, Md Ismail Zabihullah, welcomed the two new directors who joined the board recently.
   During the meeting, the operative earnings of the bank, as on June end was informed to the board, important decisions on various activities of the bank were taken and special importance was given on reducing establishment cost.
   All the directors of board, managing director, two deputy-managing directors, all general managers of head office, secretary of the board of directors and concerned deputy general managers were present during the meeting.

The United States and India have established a new high-level forum aimed at expanding bilateral trade and investment ties, the US Trade Representative’s office said Tuesday.
   The announcement coincided with a White House meeting between President George W Bush and Indian Prime Minister Manmohan Singh.
   ‘Establishing this forum demonstrates our mutual respect as trading partners and our commitment to work closely together. Through regular dialogue we hope to be able to resolve issues before they become problems,’ US Trade Representative Rob Portman said in a statement.
   ‘We anticipate much greater commercial activity in the goods and services areas as India’s economy grows and as it continues to open its market to international trade and investment,’ he added.
   Two-way trade between the United States and India was nearly $22 billion in 2004. The United States imported $15.6 billion worth of Indian goods last year, making it India’s largest export market.
   The National Association of Manufacturers has urged the Bush administration to explore the possibility of launching free trade negotiations with India.
   The group estimates a free trade pact could boost exports of US manufactured goods to India to about $16 billion by 2010, from $4 billion last year.
   Indian tariffs on US manufactured goods average about 28 per cent, or about 8 times higher than the average duty on Indian products entering the United States.
   Portman and Indian Commerce Minister Kamal Nath will oversee the new trade policy forum, USTR said.

China’s central bank said Tuesday that the long-awaited reform of its currency regime will be a controlled and gradual process and one that the country will carry out alone.
   The People’s Bank of China will maintain the yuan exchange rate at a balanced level and only gradually carry out any potential changes, with an eye towards market and economic stability, it said in a statement on its website.
   ‘We will further deepen foreign exchange management reform, gradually push forward yuan exchange rate system reform and keep the basic stability of the yuan exchange rate around a balanced and rational level,’ it said after a monetary policy meeting.
   ‘The reform of the yuan exchange rate must be done under our own initiative and should be controllable and gradual.
   ‘It should be steadily pushed forward according to the needs of our country’s reform process and ensure the stability of the financial markets and the economy,’ the statement said.
   China has come under increasing pressure to revalue its currency from trade partners, with some speculators saying an adjustment could come next month ahead of a visit to the US by Chinese President Hu Jintao in September.
   In June, two US senators agreed to delay a vote on a bill that would slap a 27.5 percent tax on Chinese imports after being assured Beijing would revalue the yuan soon during discussions with Treasury Secretary John Snow and Federal Reserve chairman Alan Greenspan.
   A recent report by Financial Times said the change would come in August although the central bank denied it.
   China has, however, promised to introduce greater flexibility in its currency regime but has never given a timetable and insists it will not give in to outside pressure on the issue.

Coffee prices in Vietnam, the world’s second biggest producer after Brazil, have dropped more than 5 per cent in the past week after the government raised its forecast of the upcoming crop, traders said Wednesday.
   They said signs of good crop weather in Brazil with no damaging frost had also prompted local speculators to cash in their stocks, and prices were now down more than 11 per cent from a five-year high of 19,300 dong ($1.21) per kg in early June.
   ‘It is quite easy to buy large quantities of coffee as most businesses believe prices will fall further,’ said a trader based in Buon Ma Thuot, the capital of the number-one coffee-growing province of Daklak.
   He said his firm expected robusta prices to drop to around 16,000 dong ($1.01) per kg in coming weeks as farmers and speculators continued to unload stocks.
   Last week Vietnam, the world’s biggest producer of the robusta variety, said it expected its new crop to be 10-10.5 million 60-kg bags (600,000 to 630,000 tonnes), 19 per cent higher than previously forecast, after good rain and higher world prices led growers to take better care of their trees.
   A prolonged drought in the Southeast Asian country had raised supply concerns and prompted Vietnamese industry officials to project a loss of one third of the crop harvest that ends next January.
   The low output forecast caused coffee prices in Vietnam to double to a five-year high of 19,300 dong per kilogram in early June from 9,570 dong in January.
   The country’s coffee crop year runs from October through September, with a four-month harvest.
   Last week Van Thanh Huy, chairman of the Vietnam Coffee and Cocoa Association, said that stock carried over from the previous crop year to September 2004 was estimated at between 100,000 and 120,000 tonnes, similar to the 100,000 tonnes projected by traders.
   Huy forecast exports during the current crop year ending in September could total 780,000 tonnes, which would represent a fall of 18.6 per cent from the 958,000 tonnes the government said Vietnam shipped in the crop year ending in September 2004.

A squeeze on private sector profits probably dampened China’s fixed-asset investment in June but economists expect spending aimed at easing bottlenecks in areas like power and transport to have cushioned the drop.
   The median estimate of eight economists polled by Reuters is for 25 per cent higher fixed-asset investment in June than a year earlier June 2004.
   That would be smaller than the increases of 28.2 per cent and 26.5 per cent in the 12 months to May and April, respectively, but would be well below the 50 per cent-plus rates recorded at the peak of China’s investment boom in early 2004.
   The government has been striving for the past two years to rebalance the economy by promoting consumption and deterring excessive investment in property and energy-intensive sectors, such as aluminium and cement.
   The drive is slowly paying off, but economists attribute the unfolding slowdown as much to the capitalist compulsion to make profits as to the directives of the communist authorities.
   With the rise of the private sector in the Chinese economy, non-state investment responds much more sensitively to the profit cycle, which is now turning down, said Grace Ng of JP Morgan Chase in Hong Kong.
   ‘Consequently, the impact of the profit slowdown on overall fixed investment should now be significantly higher than in past cycles,’ Ng wrote in a research report.
   Yuan Gangming of the Chinese Academy of Social Sciences in Beijing said private firms were also being hit by credit tightening and weakening sales.
   But he said underlying growth in investment would remain strong, not least because local governments and state companies appear to be stepping up their investments.
   The figures are due to be released during a National Bureau of Statistics news conference on Wednesday starting at 0200 GMT to review China’s economic performance in the second quarter.
   The bureau will also release quarterly figures for overall fixed-asset investment. This measure, which includes spending in rural areas, was 22.8 per cent higher in the first quarter than a year earlier, compared with a 25.3 per cent rise in urban investment.
   A drop in China’s two surveys of purchasing managers last month foreshadows a likely slowdown in industrial production in June for the first time since March.
   The median forecast of 10 economists polled by Reuters is for a rise of 15.9 per cent from a year earlier, down from 16.6 per cent in May and 16.0 per cent in April, though still close to the trend growth seen for more than a year.
   Rob Subbaraman of Lehman Brothers in Tokyo said he had pencilled in a slowdown in output because the purchasing managers’ index for brokers CLSA, produced by British research firm NTC, had fallen quite sharply in June to 51.0 from 53.3 in May.
   A separate PMI produced by the statistics office itself fell to 51.7 in June from 57.9 in March.
   Annual industrial output growth has been remarkably steady near 15 to 16 per cent since coming off a peak near 20 per cent early in 2004.
   But economists say it is now ebbing as China’s investment boom cools. Rising energy costs are taking their toll too.
   Jun Ma at Deutsche Bank in Hong Kong also cites rapidly mounting losses among industrial firms. In May those losses were 60 per cent higher than a year earlier, with the number of firms losing money rising to 11 per cent of all firms from 6 per cent.
   ‘With profit growth slowing and the number of loss-making firms rising, many companies—especially non-state-owned firms, which now produce 70 per cent of industrial output—will be very cautious in launching new projects and expanding production,’ Ma said in a report.
   He expects industrial output growth to slow to 14 per cent in the second half of this year. For all of 2004 and 2003, when China’s investment boom was at its peak, output rose 16.7 per cent and 17.0 per cent respectively.

Surging oil prices will raise costs and dampen Malaysia’s economic growth this year, reinforcing arguments for a currency revaluation to help tame inflation, a leading think tank said Wednesday.
   The Malaysian Institute of Economic Research, whose views are closely tracked by financial markets, cut its forecast for Malaysia’s 2005 economic growth for the second time this year, blaming high oil prices and soggy global electronics demand.
   It forecast the economy would grow 5.1 per cent in 2005, at the lower end of the central bank’s estimate of 5 to 6 per cent growth. Economic growth hit a four-year high of 7.1 per cent in 2004.
   The institute had in April lowered its 2005 growth estimate to 5.4 per cent from 5.7 per cent, also due to slower export growth and high oil prices.
   Galloping oil prices are a big risk to Malaysia’s economy, fuelling inflationary pressures which cannot be curbed by higher interest rates, institute executive director Mohamed Ariff said.
   Malaysia’s ringgit currency has been pegged at 3.8 to a dollar since 1998, and economists say the greenback’s three-year decline has raised the cost of imports from Europe and Japan.
   The US currency has strengthened recently on expectations of further U.S. interest rate rises, and Ariff said the firmer dollar afforded a good opportunity to review the ringgit peg.
   ‘This is a good time to get the ringgit peg undone. Better to do it while the dollar is strong so that the extent of appreciation that will result from any depegging will be small enough for the economy to cope with,’ he said.
   Malaysia has said the currency peg continues to benefit its economy by ensuring stability for its exporters.

US chocolate makers have three more years to bring child labour under control in West African cocoa fields, but it may be two decades before children are seen in school instead of their parents’ farms, an industry official said.
   Hundreds of millions of dollars of aid also will be required to ensure adequate education facilities in one of the world’s poorest regions, Jan Vingerhoets, executive director of the International Cocoa Organisation, said.
   ‘You’re talking about a poverty problem—nothing more, nothing less,’ Vingerhoets said in an interview on Monday on the sidelines of an international cocoa conference in Malaysia.
   ‘The African cocoa farmer is keen to see his child go to university and escape the vicious cycle he went through. But he has no money, so he takes him to the farm instead.’
   Two U.S. politicians brought to world attention the issue of child and slave labour on West African cocoa fields when they set a four-year deadline for chocolate makers to come up with a certification that their products were free of child labour.
   The deadline expired on July 1 this year without any real result. But Congressman Eliot Engel, who together with Democrat Senator Tom Harkin framed the so-called Harkin-Engel Protocol for cocoa in 2001, said he would continue to work with confectioners to wipe out the worst forms of child labour in West Africa.
   An industry source said chocolate makers had now been given until 2008 to come up with certification and proper monitoring.
   Vingerhoets said the issue of child labour in West Africa had been blown out of proportion, with some media reports suggesting that between 20 and 50 per cent of the cocoa in Ivory Coast was grown using child slave labour.
   ‘That’s absolute nonsense,’ he told Reuters. ‘More than 90 per cent of the child labour in West Africa is nothing more than children helping their parents out. My father was a chocolate- maker in Amsterdam and I helped him too.’
   ‘But there is some forced child labour in West Africa and some of that is related to cocoa production. So, we must do everything we can to get rid of it.’
   He said chocolate makers had proposed around $20 million over the next three years for the social work they were to do in West Africa.
   ‘But I’d say you’ll easily need 10 or 20 times that if you really want to ensure enough schooling for all and eradicate the problem,’ he added.
   Monitoring and certifying crops was another mammoth task in a region where almost all farmers were smallholders.
   ‘In Canada, you can know by each district what is being produced and who is producing what, because there is a small number of very large farms.’
   ‘But there are 2 million cocoa smallholders in West Africa. Some are in very remote places. It is not something that you can solve as if you are in a highly- developed country. where everything is known and everything is registered. Ultimately, the only thing that will solve the problem will be development.’
   Vingerhoets said the International Cocoa Organisation, which had 14 producing countries and 28 consuming nations as members, had been experimenting in recent years on creating a better quality label for West African cocoa.
   ‘The cocoa beans are taken directly from the farms, brought to a local cooperative, checked for quality, sealed for export, checked finally at the port and shipped. I’ll say it’s a fairly successful experiment.’
   But labelling cocoa—or ideally chocolate—as free of child labour will not be that easy, he said.
   ‘Once the beans are processed, it’s difficult to know which beans went into which chocolate.
   ‘For something like that to work, you’ll need a permanent relationship between the exporter and ultimate buyer. You must be satisfied of both the bean quality, and morals behind its production, if you like.’

Britain-based brewer SABMiller gained a key foothold in the booming South American drinks market on Tuesday, saying it would buy a controlling stake in Colombia’s Grupo Empresarial Bavaria in an agreed 7.8-billion-dollar (6.5-billion-euro) deal.
   Under the terms of the jointly announced deal, SABMiller will carry out a share swap with Bavaria’s founding Santo Domingo family, which owns 75 percent of the company.
   SABMiller was to gain a 71.8-percent stake in Bavaria and the Santo Domingo Group would end up with about 15.1 percent of SABMiller.
   Investors toasted confirmation that SABMiller, one of the biggest brewers in the world, had agreed to buy a majority stake in Bavaria, the second-biggest brewer in South America.
   The share price of SABMiller rocketed 6.77 percent to 946 pence in London trading, while the capital’s FTSE 100 index of leading shares was howing an increase of 0.06 percent to 5,217.20 points.
   The equity value of the deal was 4.8 billion dollars and, including debt and minority interests, the total value of the Bavaria group stood at around 7.8 billion dollars, SABMiller said in an official statement.
   To finance the offer, the group said it would issue 225 million new SABMiller shares worth around 3.5 billion dollars.
   Grupo Bavaria has leading market positions in Colombia, Peru, Ecuador and Panama and its key brands are Aguila, Cristal, Pilsener and Atlas respectively.
   SABMiller — owner of the Miller, Castle, Pilsner Urquell and Peroni brands — said it would save 120 million dollars in annual costs from the deal within five years, while tapping strong growth in beer consumption in the region.

Oil prices dropped Tuesday as Hurricane Emily, which had frozen most of Mexico's oil production and all of its crude exports, was expected to swirl clear of most Tuesday oil and gas operations in the Gulf of Mexico.
   Tuesday light, sweet crude oil futures settled 77 cents lower at $57.32 a barrel, while London Brent crude settled 62 cents weaker at $56.99.
   Prices on Thursday fell to a two-week closing low following a welter of bearish news, indicating a healthier supply situation and raising the possibility high prices could be eroding demand.
   Tuesday Federal Reserve Chairman Alan Greenspan said on Monday high oil prices are likely to cut about three-quarters of a per centage point from the Tuesday gross domestic product this year.
   The Tuesday government said on Monday that Emily had so far shut in less than 1 per cent of daily Tuesday Gulf of Mexico oil and natural gas production.
   But hurricane-watchers were concerned Emily could strengthen again when it moved out over the Gulf of Mexico.
   Mexico, the world's ninth-largest exporter, which produces 3.44 million barrels per day of crude, shut down most of its output in the Gulf of Mexico.
   Emily also shut all of its nearly 1.9 million bpd of oil exports.
   Tuesday crude oil stockpiles are at the upper end of their seasonal average, while inventories of distillates, which include high-demand fuels diesel, jet fuel and heating oil, are around average for the summertime, Tuesday data has shown.
   The Organisation of
   the Petroleum Exporting Countries restarted talks on a 500,000-bpd output increase after prices soared back above $60 a barrel earlier this month.
   But an OPEC delegate said on Monday it was very unlikely OPEC would agree to another output hike in the near term.
   In its monthly market report on Monday, OPEC downgraded its forecast for demand growth in 2005 by 150,000 bpd.
   Last week, the Paris-based International Energy Agency also revised down its
   forecast for global oil demand growth this year by 200,000 barrels per day to 1.58 million bpd, as high prices began to hit demand growth in China and the United States.

Money supply up 11.2pc in July-May
Broad money recorded an increase of Tk14480.50 crore or 11.16 per cent during July-May period of the fiscal year 2004-05 against the increase of Tk10003.9 crore or 8.78 per cent in the same period of the fiscal 2003-04. Statistics available with Bangladesh Bank revealed that of the components of broad money, the indicator of money supply, currency outside banks rose by Tk2514.10 crore or 15.90 per cent and deposits increased by Tk11966.40 crore or 10.50 percent; of which time deposits increased by Tk11362.5 crore or 11.45 per cent and demand deposits increased by Tk603.90 crore or 4.11 per cent.
— New Age

Reserve money increases by 11.13pc
Reserve money recorded an increase of Tk221.40 crore or 11.13 percent during July-May period of the fiscal 2004-05 compared to the increase of Tk1723.70 crore or 7 per cent in the same period of of the previous fiscal. The increase in reserve money growth occurred due to increase in net foreign assets of Tk2529.20 crore or 18.12 per cent during the period under review. This was , however, partly offset by the larger decline in claims on government(net) by Tk158.60 crore or 13.32 per cent. Reserve money multiplier remains at 4.94 as at the end of June, 2004.
— New Age

Taiwanese delegation meets CCCI
A Taiwanese business delegation led by Chin-Lin Yang, chairman of the Big Top Enterprise Company Limited, in a meeting with Chittagong Chamber of Commerce and Industry expressed eagerness to invest in various sectors in Chittagong. The CCCI president-in-charge, MA Latif, presided over the meeting. Taiwanese delegates Min-Hung Chen, Yung-Shun Chen, Lan-Fu Chu, CCCI directors Sayed Jamal Ahmed, Mahfuzul Haque Shah, Ershad Ullah and Mahbub Ali took part in the discussion.The CCCI leaders urged the Taiwanese delegation to invest in food processing, dairy and beverage, health care services, cleaning and washing plants, and chemical and apparels sectors.
— New Age

SEC warns 8 companies
Securities and Exchange Commission on Tuesday warned eight listed companies for violating capital market rules. The rules included non-holding of the annual general meetings, non-submission of half-yearly financial statements and non-submission of audited reports at the end of the year. The warned companies are: Kashem Textile Mills Ltd, Kashem Silk Mills Ltd, Bangladesh Shipping Corporation, Bangladesh Electricity Metre Co. Ltd, Chic Tex Ltd, Megna PET Industries Ltd, Perfume Chemical Industries Ltd and Legacy Footwear Ltd.
— BDNews

Mir Nasir discusses SAARC tourism
Sri Lankan High Commissioner Gamini Sarath Munasinghe paid a courtesy call Tuesday on State Minister for Civil Aviation and Tourism Mir Mohammad Nasiruddin at the latter’s Secretariat office. They discussed the tourism industry of the SAARC region particularly of Bangladesh and Sri Lanka. They also discussed matters of mutual interest, according to sources.
— BDNews

DSE closes lower
Trading at Dhaka Stock Exchange closed lower Tuesday with the losers dominating the gainers. The DSE All Share Price Index decreased by 13.19 points or 1.07 per cent to close at 1,215.023. A total of 160 issues were traded Tuesday. Of them, 41 gained, 97 declined and 22 remained
unchanged.
– New Age

CSE closes down
CSE all share price index (CASPI) closed lower Tuesday with the losers dominating the gainers. The CSE All Share Price Index decreased 0.81 percent or 25.78 points to close at 3122.01 points from 3147.79 points on Monday. The CSE-30 Index also shed 0.77 percent or 22.87 points to close at 2943.39 points from Monday’s 2966.26 points. Of the total 68 issues traded Tuesday, 16 gained, 47 declined and five remained unchanged.Total 536,309 shares and debentures worth about Tk 4.29 crore changed hands Tuesday against 536,517 shares valued at Tk 4.47 crore on the previous trading day.
— UNB

BB settles reverse repo bids for
Tk 1108 crore
The Bangladesh Bank (BB) Monday accepted 19 bids including five bids of 1-day tenure, two bids of 3-day tenure and ten bids of 5-day tenure for the reverse repo auction of Tk 1108 crore in total. Five bids of 1-day tenure amounting to Tk 348 crore, two bids of 3-day tenure amounting to Tk 75 crore, ten bids of 5-day tenure amounting to Tk 525 crore and two bids of 7-day tenure amounting to Tk 160 crore were received and all the bids were accepted. The rates of interest against the accepted bids were 4.5 percent per annum for 1-day tenure, 4.75 percent per annum for 3-day tenure, and 5 percent per annum for 5-day and 7-day
tenure.
— UNB

Saudi Airlines introduces SMS service
Saudi Arabian Airlines has recently launched a new mobile phones service to facilitate the passengers traveling on its local and international flights. Introduction of the short message service (SMS) would help the passengers to purchase tickets, confirm reserve for wait-listed passengers and notification of changes in flight schedules, said the airlines. It has a plan to include other features of this SMS service in near future to give their passengers continued quality service.
— BDNews

Hong Kong gold prices close lower
Hong Kong gold prices closed lower Tuesday at 419.10-419.60 US dollars an ounce compared to Monday’s close of 420.60-421.10 dollars. The market had opened at 421.40-421.90 dollars.
— AFP

Electrolux profit drops 3.5pc
Electrolux AB, the world’s largest maker of household appliances, said second-quarter profit dropped 3.5 percent as raw-materials costs rose and demand weakened in places such as Europe and Australia. ‘Electrolux has been pressurized by high commodity prices,’ said James Laing, who helps oversee about $6 billion in stock as a fund manager at Aberdeen Asset Management. ‘It is a difficult market, but they have been restructuring over the last few years, reducing costs and moving manufacturing to Eastern Europe.’
— Bloomberg