Prices of rice, flour dip; soyabean,
onion, go up
Staff Correspondent
The prices of rice and flour continued to decline at the city markets in the past week, still remaining at very high, while the prices of loose soyabean, onions and chicken went up further.
Consumers said that they expected reflection of the good harvest of boro paddy on the rice prices at the markets, pushing down the cost of the staple food grain from the existing high to the level of previous year.
Market sources said increased supply of the newly harvested rice and flour helped pushing down their prices while the costs of major other essentials shot up due to supply tightening.
On Friday, the coarse rice of different varieties at Mahakhali and Nakhalapara bazaars in the city were selling between Tk 32 and Tk 35 per kilogram, down by Tk 2 in a week.
The prices of fine varieties of rice also continued to come down at the markets where a kilogram of miniket was retailing between Tk 37 and Tk 43, down by Tk 1 in a week and Tk 5 in a month.
Shah Alam, a retailer at Nakhalapara bazaar, predicted that the rice prices would decline further during the next four weeks.
Mazharul Islam, an employee of a clothing shop at Nakhalpara bazaar, said decline in the rice prices by Tk 1 or Tk 2 per kilogram could not give relief to the worst hit commoners with limited income as well as the vulnerable group of people. The prices of the staple food grains should come down to the level of last year.
A report released by the Trading Corporation of Bangladesh on Thursday cited that retail prices of coarse rice was at Tk 30-32 per kilogram which recorded Tk 21-23 on the day in previous year.
The rice suppliers in northern Naogaon district informed that the prices of coarse rice remained steady or increased slightly on Thursday as the rice millers were busy for readying stocks for government supply.
Government procurement price has attracted the millers to supply some qualities of rice to the nearby procurement centres.
The decline in supply by the millers to markets pushed up prices of coarse rice slightly in Naogaon rice mills where on Thursday pari – superior grade coarse rice — was selling at Tk 1120 per maund (37.3 kilogram), up from Tk 1,080 in the early days of the week.
Prices of fine varieties of rice, however, continued to decline as najirshail was trading at Tk 1,220 per maund, down by Tk 50 over the previous week and by Tk 250 over the month. Auto miniket — fine quality rice — was selling at Tk 1,280 per maund, down by Tk 40 over the past week and and by Tk 200 over the last.
Prices of atta — coarse flour — declined further in the past week as millers increased supply of the food grain to the markets crashing the newly harvested wheat.
On Friday, non-packed coarse flour was selling between Tk 38 and Tk 40 per kilogram on Thursday while packed flour of different brands between Tk 41 and Tk 43, down by Tk 4 in a month.
Although Bangladesh depends mostly on imported wheat, a good harvest of the food grains locally this season is helping down its prices.
Prices of edible oils increased again as retailers responded to fluctuations in prices of soyabean and palm oils at wholesale markets in the previous week.
On Friday non-packed soyabean oil was selling between 112 and Tk 114 per kilogram, up by Tk 4 over the previous week.
Prices of chicken increased further as its supply remained tight for long following impact of bird flue scare and huge shortage in poultry bird production across the country. Increased demand of chicken at the markets amid short supply of fishes also pushed up the chicken prices.
On Friday, live broiler chicken was selling between Tk 120 and Tk 130 a kilogram, up by Tk 10 over the previous week and by Tk 30 over the past month. A couple of months ago, the price of broiler chicken had come down to Tk 70 per kilogram.
Onion prices continued to increase during the past two weeks as the supply of locally produced onions was on the down trend. On Friday, a kilogram of local onions was retailing between Tk 24 and Tk 28, up by Tk 2 over the previous week and by Tk 4 over the month.
The prices of vegetables showed declining trend in their prices as supply of summer varieties started to increase during the past two weeks.
Poor response to home loan scheme
makes BB mull revision of terms
United News of Bangladesh . Dhaka
The much-hyped home loan scheme of the Bangladesh Bank has so far received a lukewarm response, prompting the central bank to think about revising its conditions for which the borrowers are shying away.
‘The response is not good. Some of its conditions are not borrower-friendly,’ said a senior official at the central bank.
He said the monthly repayment of around Tk 25,000 from one’s monthly income of not more than Tk 30,000 is really difficult while individuals with monthly income of less than Tk 30,000 are eligible for the loan.
According to Bangladesh Bank figures, partner banks and financial institutions disbursed only Tk 74,00,000 until January this year since the Tk 300 crore scheme was launched in July last year.
‘We’ll have to streamline the scheme to make it simpler and more attractive,’ Bangladesh Bank deputy governor Nazrul Huda, who is in charge of the scheme, told the news agency.
‘We’re now thinking about how the scheme can be made more attractive to the borrowers,’ he said.
He was considering whether the interest rate could be reduced further from the existing 10 per cent apart from expanding the areas eligible for the loan from the present six city corporations and four municipality areas (Tongi, Gazipur, Savar and Narayanganj).
He said the newly developed areas surrounding the Dhaka City Corporation have potentials to come under the scheme.
Huda said he would talk to the stakeholders, including the executives concerned of the partner banks and financial institutions, to identify the problems as well as invite suggestions from the people for making the loan programme more attractive.
The central bank has introduced the home loan scheme to meet the rising demand for housing facilities of the lower-middle and middle-income groups of people with an initial refinancing fund of Tk 300 crore.
The partner banks and financial institutions have been assigned to operate the loan.
At the initial stage of operation, the maximum limit of loan was fixed at Tk 15,00,000 for a single borrower and it was later raised to Tk 20,00,000 for the convenience of the borrowers.
The refinancing limit for the partner banks and financial institutions was also raised to 100 per cent from previous
75 per cent of the total loans to be sanctioned for a single borrower.
Dhaka for more import by Pakistan
to reduce trade gap
Staff Correspondent
Dhaka proposed that Islamabad should import more of potential products especially raw jute, jute goods, pharmaceuticals and ceramics from Bangladesh to address the trade imbalance now tilted towards Pakistan.
Bangladesh made the request when the foreign adviser, Iftekhar Ahmed Chowdhury, on Thursday met the Pakistan commerce minister, Shahid Khaqan Abbasi, in Islamabad.
The adviser also met the Pakistan information minister, Sherry Rehman, on the day and stressed the need for a greater bilateral cooperation, according to a release received in Dhaka from the Bangladesh mission in Islamabad Friday.
During the discussions with the Pakistan commerce minister, the need to address the trade imbalance, now in favour of Pakistan, was discussed and Iftekhar suggested larger imports from Bangladesh, particularly of raw jute, jute goods, pharmaceuticals and ceramics. It was agreed that lack of direct shipping
links posed an impediment to trade.
It was thought the joint business council could meet to ‘brainstorm’ the issue and examine the possibilities of leasing vessels for dedicated Karachi–Chittagong routes.
The possibility of an elimination or reduction of tariffs on both the sides on a number of specific items for a short period as ‘early harvest’ leading to an eventual free trade agreement was considered worth examining.
US drops garment dumping claims
Asia News Network . Hanoi
The US has cleared Vietnam garment makers of dumping charges.
The US Department of Commerce has announced that the evidence did not support charges of dumping against Vietnam apparel importers.
‘After reviewing the second six months of data from the monitoring programme of apparel imports from Vietnam, there is insufficient evidence to warrant self-initiating and anti-dumping investigations,’ the DOC said in a press release.
In the second probe, conducted from August 2007 to January 2008, the DOC examined data for imports in five different apparel product groups, including trousers, shirts, underwear, swimwear and sweaters. No indication of dumping was found, according to the press release.
US assistant secretary of commerce for import administration David Spooner said the DOC compared prices of imports from Vietnam to those from other suppliers to the US, including Bangladesh, India, Indonesia, Pakistan, Thailand, Cambodia, Macau, Malaysia, the Philippines and some other countries in Central America.
The prices of Vietnamese imports were generally comparable to those of other suppliers.
Despite finding no visible threat to US garment makers from Vietnamese imports, the DOC said it would continue to monitor imports from Vietnam for another six months under a review slated to begin in September.
The monitoring programme commenced upon Viet Nam’s entry into the World Trade Organisation in January 2007 and was expected to continue through the end of the Bush administration.
China’s cotton prices to remain
relatively high in 2008
Xinhua . Hangzhou
Domestic cotton prices will be high but stable this year, a senior official of the China Cotton Association told an industry event on Friday.
Shi Jianwei, the CCA’s vice-president, said that domestic cotton prices had fluctuated slightly so far in 2008. The price had been about 13,500 yuan per tonne recently, up 300 yuan since September.
Shi made these comments at the ongoing China Cotton Summit in the eastern province of Zhejiang. He said prices were stable because of stagnant demand, with yarn output standing at 11.85 million metric tonnes since September, 4 per cent lower than the expected spinning yield.
Shi also forecast that domestic cotton prices would remain high, having reached a record high in late August.
Shi told Xinhua that domestic factors such as macro-control measures — lower rebate rates, higher interest rates and a sliding scale customs system — would be the determining factors in cotton pricing.
‘The China Cotton Index has moved within a range of no more than seven per cent, against a 60 per cent movement in the New York futures market in the past seven months in the aftermath of the subprime crisis,’ said Shi.
‘Despite the volatility in New York, there is little possibility for cotton prices to rally or decline sharply in China,’ he added.
The National Bureau of Statistics has said that total cotton output reached 7.6 million metric tons and the total cotton planting area was 5.59 million hectares in 2007, up 3.3 per cent year-on-year.
BoI may discuss Tata investment
proposal tomorrow
Bdnews24.com . Dhaka
The Board of Investment and officials of Tata Group are likely to discuss an investment proposal by the Indian business giant on Sunday, an official said.
‘A meeting with Tata officials is scheduled for Sunday,’ the BoI executive chairman, Md Kamaluddin Ahmed, told the news agency on Friday.
Officials of the Energy Division would also be present at the meeting, said an official of the energy ministry.
The commerce adviser, Hossain Zillur Rahman on April 29, told reporters that Tata was still hopeful of investment in Bangladesh.
After a meeting with Tata Group’s Bangladesh representative Manjer Hossain, Zillur said Tata wanted to have talks with the Bangladesh government on its investment proposal.
Tata signed a memorandum of understanding with Bangladesh in 2004 on a $2 billion investment. Later, the investment proposal was revised upward at $3 billion.
Tata’s investment proposal includes a 1,000 megawatt gas-fired power plant and a 500 megawatt coal-fired power plant.
Also on the cards was a fertiliser plant with a one million tonne a year capacity and a 2.4 million tonne steel mill in Ishwardi.
Dhaka had earlier rejected Tata’s initial 2004 offer to buy gas at a fixed rate of $1.10 per unit over a 20-year period from the government.
Later, in April 2006, Tata came up with a new proposal that offered to pay $3.10 per thousand cubic feet (TCF) of gas for its fertiliser plant.
The revised deal also included a proposal to pay $2.60 per TCF for the steel plant’s power supply.
Biofuels backlash in US as
food costs climb
Agence France-Presse . Washington
A biofuels backlash has erupted in major ethanol producer in the United States as lawmakers and experts debate the merits of converting food to fuel to support America’s age-old love affair with the automobile.
With petrol at record prices at US pumps, and soaring corn, rice and wheat costs sparking a global food crisis this year with deadly riots in several nations, some have questioned the wisdom of president George W Bush’s call for higher US biofuel mandates that divert US crops, like corn, to fuel production.
‘Why are we putting food in our gas tanks instead of our stomachs?’ Richard Reinwald, owner of Reinwald’s Bakery in Huntington, New York, asked members of Congress at a hearing last week on skyrocketing food costs.
Biofuels are derived from foodstuffs such as corn, soybeans and sugarcane, and plants like switch grass and their cellulosic waste.
Touted just months ago as an answer to spiking gas prices, biofuels are enduring closer scrutiny by US lawmakers alarmed by the high cost of food staples and how they are sapping millions of American households.
Members of Bush’s Republican Party are turning on him, including Senator Kay Bailey Hutchison, who called on Congress to undo ‘America’s ethanol mistake.’
‘In recent weeks, the correlation between government biofuel mandates and rapidly rising food prices has become undeniable,’ Hutchison said in a statement on her website.
‘At a time when the US economy is facing recession, Congress needs to reform its food-to-fuel policies and look at alternatives to strengthen energy security.’
Hutchison is due to introduce legislation to Congress that would freeze biofuel mandates at current levels.
Biofuels are refined to produce fuel similar to those made from petroleum, but their growing use has been cited along with poor harvests due to drought, surging demand in Asia as living standards have risen, higher transport costs and trade restrictions for the rapid rise in food prices.
Joachim von Braun, head of the US-based International Food Policy Research Institute, said a moratorium on biofuels from food grains in 2008 would lower corn prices by 20 per cent and wheat prices by 10 per cent in 2009 and 2010.
Renowned US economist Jeffrey Sachs has also leveled heavy biofuels criticism.
‘What should be abandoned is the use of our current food supplies to turn them into ethanol, especially in the United States,’ Sachs told the Australian Broadcasting Corporation, calling the food-to-fuel programme ‘a lousy bargain.’ In December Bush signed the Energy Independence and Security Act, which calls for a six-fold increase in the use of ethanol, to 36 billion gallons (136b liters) per year by 2022.
The United States is the world’s top producer of corn-based ethanol, and the Bush administration sees it as a key way to reduce dependence on foreign oil and curb fossil fuel emissions, the main source of man-made global warming.
Lester Brown, founder of the Earth Policy Institute said ‘the evidence irrefutably demonstrates that this policy is not delivering on either goal.’
‘In fact, it is causing environmental harm and contributing to a growing global food crisis,’ Brown wrote in a scathing editorial in the Washington Post.
EPI says the United States burned 25 per cent of its corn supply as fuel last year, leading to just a one per cent reduction in the country’s oil consumption.
Some scientists warn that biofuels actually increase greenhouse gas emissions, as farmers convert forest and grassland to new cropland to replace or add to grain diverted to biofuels.
‘Corn-based ethanol, instead of producing a 20 per cent savings, nearly doubles greenhouse emissions over 30 years, and increases greenhouse gases for 167 years,’ Timothy Searchinger and other experts wrote in a study published in the journal Science.
Yet scores of American farmers eyeing swelling corn prices have abandoned wheat to grow corn, leading to the lowest US wheat ending stocks in 60 years, according to the US Department of Agriculture, and causing a ripple effect of rising commodity prices.
Reinwald the baker said that in 2006 he paid 17 dollars for a 100-pound bag of bread flour; today it costs 52 dollars — more than three times as much.
China vice-premier warns of
inflation, global slowdown
Agence France-Presse . Shanghai
Chinese vice-premier Wang Qishan warned Friday global inflation posed a threat to China’s speedy growth, saying high prices abroad had put the nation’s economy under major pressure.
‘China’s economy continues to grow fast... although the economic pace is facing contradictions and problems,’ Wang said in a speech at a financial forum in Shanghai.
‘Mainly, prices are relatively high, while fixed assets investment have not returned to rational levels and at the same time global inflation has intensified, creating major outside pressure for China,’ Wang said.
The government is battling to control a spike in inflation — currently near 12-year highs — while at the same time maintaining the rapid double-digit growth that China has enjoyed for five consecutive years.
The world’s fourth-largest economy expanded by 10.6 per cent in the first quarter of 2008 compared to a year ago.
Wang, a former mayor of Beijing who is now a key economic policy decision maker, said China had to continue to strengthen macroeconomic controls and implement prudent fiscal policy while maintaining tight monetary policy.
‘We must prevent economic growth from turning into overheating and prevent prices from turning into inflation,’ he said.
He said the weakening US dollar combined with the instability of financial markets and the economies of developed countries meant China had to take steps to protect its economic financial system.
‘If we don’t handle financial risks properly, this could cause turbulence in the overall economy and undermine social and political stability,’ he said.
Wang said China would continue to reform its banking, securities and insurance industries and pledged to tighten up on hot money flows.
‘We will strengthen supervision over cross-board capital flows and step up efforts to set up a financial security network,’ he said.
Reforms to its current currency mechanism have achieved substantial progress while attempts to make interest rates more market-oriented were ongoing, he said.
Meanwhile, central bank governor Zhou Xiaochuan, echoed similar sentiments by saying that China had continued to deepen its involvement in the global economy, but also ensure it could protect itself from negative effects.
‘We must actively participate in the cooperation of economies in the world and on the other hand head off the impact volatility in the global economy has on China’s economy,’ he said.
‘We must maintain fast and sound economic development in China and shoulder due responsibility in promoting global economic development and maintain stability in the global economy.’
Citigroup may unveil
$400b asset sales
Reuters . New York
Citigroup Inc, hard hit by the global credit crunch, was expected to present plans to sell roughly $400 billion of extraneous assets when it met with investors and analysts on Friday, people familiar with the situation said.
Newly-installed chief executive Vikram Pandit, scrambling to slash Citi’s costs and get past credit market problems, also intends to reaffirm his promise to cut annual expenses at the largest US bank by roughly 20 per cent, one of the sources told Reuters on Thursday.
Citigroup declined to comment.
The sales could amount to nearly 20 per cent of Citi’s current assets, and according to the Financial Times, which first reported the story on Thursday, would take place over several years.
Although Citi has said previously that it plans to shed assets to improve its capital position, the magnitude of the potential sales struck some analysts as worrisome.
‘The only reason you’d sell off that many assets is you have a lot more losses coming than you originally thought,’ said Jim Huguet, co-chief executive at fund manager Great Companies LLC, which does not own Citi shares.
Since late last year, Citi has recorded more than $45 billion of writedowns and credit losses, raised more than $40 billion of new capital including $2 billion of preferred shares this week, and slashed its dividend 41 per cent.
Precisely which non-core assets are for sale is unclear, but analysts speculated that consumer finance businesses in the United States, Japan, Mexico, and Germany are possible.
The sources requested anonymity because the plan had not yet been announced.
Investors are impatient for improvement at Citi, whose share price has fallen more than 55 per cent over the last year.
Pandit has faced demands from investors that he slash costs, shed poorly performing businesses and even split up the bank.
Some investors view Citi, built over two decades by Sanford ‘Sandy’ Weill, as too big to govern, a charge that Weill’s hand-picked successor, Charles Prince, routinely denied.
Pandit and other executives are expected to also fend off calls for a break-up on Friday when the company offers a four-hour presentation to investors and analysts.
They are instead expected to tout Citi’s combination of consumer and institutional businesses, and recommend selling operations and assets outside those main areas.
Pandit’s team is also expected to outline the bank’s focus on cash management, wealth management and cards as key businesses for the future, one of the sources said.
Citi’s US student loan business may make sense to sell, after recent legislative changes and turmoil in the securitisation market have made the business less profitable, an analyst said.
The Wall Street Journal this week reported Citi may sell Primerica, a consumer sales network for life insurance and investments.
Citi should also look to sell assets on its trading books, which have contributed to much of the writedowns that bank has taken so far, said Thomas Russo, partner at asset manager Gartner Russo & Gartner.
‘It all depends on the price they get and how they do it, but if they can do it over time, and swear off the stuff, it could be good for Citi,’ Russo.
Another fund manager added that Pandit’s presentation of the plan may prove to be a turning point for Citi.
‘Until we see the details, it’s hard to know. Philosophically, I think it ought to be viewed positively,’ said Anthony Muh, head of Asia Pacific for AT Asset Management in Hong Kong, which manages about $1 billion in Asian equities, but does not hold any Citi shares.
Investors have in recent weeks grown increasingly hopeful about the US financial sector moving closer to the end of its difficulties after being slammed over the past year by a meltdown in the US subprime mortgage market and ensuing turmoil in global financial markets.
Citi’s shares have risen 30 per cent since mid-March, and closed on Thursday in New York at $24.30.
But concerns still remain about Citi. Its shares still trade at about their book value, while healthier banks’ shares typically trade well above their book value.
Citi’s ‘Tier 1’ capital ratio — a measure of the bank’s capital strength — is above 8.6 per cent, based on March balance sheet figures and recent capital raising efforts.
That’s above the bank’s internal targets, but the fact that Citi continues to raise equity, having issued perpetual preferred securities this week, makes some analysts wonder whether future writedowns will continue to be large.
Citi’s balance sheet currently weighs in at more than $2.2 trillion. Pandit has already been working at slimming down the bank’s assets, having agreed to sell Citi’s stake in CitiStreet benefits servicing venture, commercial leasing business CitiCapital and the Diners Club charge card business.
Citi has also sold about $12 billion of loans linked to buyouts.
Another highlight of the meeting will be plans to slash as much as $15 billion of operating expenses. Last year, Citi’s costs totaled more than $61 billion.
The bank has announced 13,200 job cuts in 2008, though analysts say tens of thousands of further cuts may be needed. The bank ended March with 369,000 employees.
US warns China of technological
isolation
Agence France-Presse . Washington
The United States warned China Thursday that it risked ‘technological isolation’ for developing unique technical standards of its own that also are shutting out foreign competition.
Despite widely accepted international standards, China developed standards mandated by government regulations amid a lack of transparency and due process, said under secretary of commerce Christopher Padilla.
‘These requirements certainly provide Chinese domestic companies an unfair advantage, but they also carry great risks for China,’ he told a conference in Washington on standards and innovation in China.
In the 1980s, he said, Japan thought its market was large enough to justify unique technology standards that would eventually move the world in its direction, to the benefit of its companies.
‘It was wrong,’ he said.
‘Now China runs the same risk of turning itself into a lonely island of technological isolation, cut off from the world by government-mandated, China-unique standards that are out of line with where the market-driven global economy is heading.’
Many American companies have expressed concern about security standards for information technology products that made it costly for them to enter the Chinese market, said Padilla, who is policy chief for international commerce.
‘We see this happening in other areas as well, including telecommunications, electronics, digital media, and software,’ he said.
Citing as an example, he said it appeared that Beijing favored a China-specific third-generation mobile phone standard over internationally recognised standards.
‘While China’s approach may appear to provide a competitive advantage in the short term, it in fact inhibits collaboration, limits product development, reduces consumer choice, and hinders China’s competitiveness and growth,’ he said.
China fund sees investment scope
amid global instability
Reuters . Shanghai
Global economic instability has created huge investment opportunities for China Investment Corp, but the sovereign wealth fund will be careful not to destabilise countries where it operates, its head said on Friday.
CIC paid $5 billion in December for a stake in US investment bank Morgan Stanley but has otherwise kept its powder dry as Western financial institutions have sought to replenish capital depleted by big subprime credit losses.
‘The current international market turbulence has produced unprecedented investment opportunities,’ said Lou Jiwei, head of the $200 billion sovereign wealth fund, established last September to earn higher returns on part of China’s vast official foreign currency reserves.
But Lou told a financial conference in Shanghai that CIC would not try to take advantage of the turbulence by acting as a hedge fund and betting on the performance of the economies of individual countries.
‘In the 1990s, some hedge funds exploited defects in the macroeconomic policies of some emerging economies and attacked them, which damaged their economies and caused hardship for people,’ he said.
‘CIC will certainly never do a similar thing.’
The fund’s officials have said as much as $90 billion of its initial allocation of $200 billion could be earmarked for investment overseas.
The rest is being spent domestically on strengthening the balance sheets of banks and other financial institutions.
CIC’s maiden investment was a $3 billion pre-IPO stake in US private equity giant Blackstone, whose shares are down nearly 40 per cent since they were floated last June.
The losses have fanned fierce criticism of CIC within China, but Lou said Blackstone was a top-tier company in which the fund had invested for the long term. CIC would not be deterred by short-term swings in the share price.
‘It’s not like in the domestic market, where you invest today and you expect to double your return tomorrow,’ he said.
Lou confirmed that CIC bought into the recent IPO of credit card company Visa Inc and said his fund had already started to invest in non-financial companies.
The only such stake to have been reported in the media is a $100 million investment in China Railway Group when it went public in Hong Kong.
Lou gave no details but said CIC would be a passive shareholder. It would not seek control of the companies it buys into because CIC is a commercially driven, not a politically motivated, investor.
He said he supported an initiative by the International Monetary Fund to draw up guidelines for the best practice of sovereign wealth funds, but he would not accept outside pressure for mandatory transparency rules.
‘I have been a government official for decades, and I follow rules. But if you want something from me in addition to the existing rules, I can’t lower my status to that level,’ he said.
The IMF and the Organisation for Economic Cooperation and Development have drawn up guidelines for sovereign funds at the request of Western governments worried that the funds could be used to buy stakes in strategically sensitive industries.
CORPORATE BRIEF
Janata Bank holds managers’
conference
Business Desk
The branch managers’ conference 2008 of the Janata Bank Limited was held at a local hotel in the Khulna city recently.
SM Aminur Rahman, chief executive officer and managing director of the bank, inaugurated the conference, said a press release.
He instructed all to ensure innovative service for meeting customers’ demand.
He emphasised the recovery of classified loans and instructed to improve bank business, investment in the potential sectors and thereby improve image of the bank.
Shihabuddin Md Shahjahan, general manager, head office, Md Nuruzzaman, general manager of the Khulna division, and other high officials of the bank were present at the function.
Oil price shoots to record
$125.98 a barrel
Agence France-Presse . London
The price of New York crude oil surged past 125 dollars per barrel on Friday, lifted by speculative demand amid concerns about tight global energy supplies, analysts said.
New York’s main oil futures contract, light sweet crude for June delivery, spiked as high as 125.98 dollars in early afternoon London trading.
And London’s Brent crude contract hit an all-time pinnacle of 125.68 dollars.
‘Oil futures hit fresh record highs, continuing gains from yesterday,’ said Sucden analyst Michael Davies on Friday.
Prices have rocketed to fresh records every day this week on the back of unrest in key producer Nigeria, other ongoing supply worries and the weak dollar which stimulates demand.
The price of oil has soared by 25 per cent since the start of 2008 and has doubled since the same stage last year -- when it stood at about 62 dollars.
Oil vaulted above the psychological 100-dollar mark last January and has since jumped above 110 and 120 dollars, as the market was also energised by soaring demand from Asian powerhouse economies China and India.
Prices continued to bolt higher on Thursday after the OPEC cartel insisted the market was well-supplied and driven by speculators.
OPEC Secretary General Abdalla Salem El-Badri said Thursday that there was no shortage of crude oil, brushing aside US calls for higher output to dampen runaway prices.
‘There is clearly no shortage of oil in the market,’ El-Badri said in a statement.
The 13-member Organisation of the Petroleum Exporting Countries produces about 40 per cent of the world’s oil, with current output at about 32 million barrels per day.
El-Badri also maintained OPEC’s stance that oil-market volatility has been driven by financial market developments and the increased flow of speculative funds into oil futures.
‘The turmoil in some global equity markets and the considerable depreciation in the US dollar have encouraged investors to seek better returns in commodities, particularly in the crude oil futures market. This has driven prices higher,’ he added.
At Sucden, Michael Davies agreed that speculative trades from powerful and wealthy investment funds was helping fuel bumper price gains for oil.
‘Another major factor being cited at the moment is keen interest in the oil market by the (investment) funds, which are currently being attracted by oil’s rapid price appreciation this year,’ Davies said
‘This probably explains the move higher over the last few days.’
Euro rallies against dollar
in European trade
Agence France-Presse . London
The euro rebounded against the dollar on Friday as the market focused on the interest rate outlook for the United States and eurozone, traders said.
In European trading, the euro rose to 1.5474 dollars from 1.5393 in New York late on Thursday.
The dollar fell to 103.13 yen from 103.68.
‘It’s natural for the dollar to take a break’ after its recent rebound, said Yosuke Hosokawa, head of foreign exchange trading at Chuo Mitsui Trust Bank.
‘Although dollar positive sentiment has eased slightly, a lot of players still believe the greenback is well supported’ as bad news related to the US economy appears to be abating, he said.
The dollar was supported earlier in the week by speculation that the next move in US interest rates could be a hike.
The US Federal Reserve has slashed its key rate to 2.0 per cent, down sharply from 5.25 per cent last September, in a bid to boost the flagging US economy which has been hit by a housing slump and related credit crunch.
Market players were also weighing the prospects for eurozone interest rates.
On Thursday, European Central Bank chief Jean-Claude Trichet warned of potential inflation risks, dampening speculation of a possible rate cut.
‘As we have said on previous occasions, inflation rates are expected to remain high for a rather protracted period of time,’ Trichet stressed on Thursday after ECB governors left the bank’s benchmark lending rate at 4.0 per cent.
Trichet’s ‘fixation may be on the fact that inflation is above target, but we suspect that the data on activity will continue to deteriorate, and ultimately turn intransigence into capitulation with a rate cut in September,’ said Calyon analyst Daragh Maher.
Inflation is being lifted largely by soaring energy prices. On Friday the price of oil reached a record high above 125 dollars a barrel.
The market was meanwhile awaiting publication later Friday of US trade data.
In London on Friday, the euro changed hands at 1.5474 dollars against 1.5393 late on Thursday, at 159.52 yen, 0.7919 pounds and 1.6134 Swiss francs.
The dollar stood at 103.13 yen and 1.0436 Swiss francs.
The pound was at 1.9535 dollars.
On the London Bullion Market, the price of gold fell to 887.70 dollars per ounce from 877 dollars late on Thursday.
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BIZLINE
Govt team visits shrimp farms, processing plants on May 15
A government delegation will visit shrimp farms and processing plants on May 15, based on a recent report by a US labour organisation, commerce adviser Hossain Zillur Rahman said Friday. In the report ‘The True Cost of Shrimp’, the American Federation of Labour and Congress of Industrial Organisations has alleged that Bangladesh shrimp industry uses child labourers and exploits women workers. The report by AFL-CIO, a voluntary federation of 56 national and international labour unions, on shrimp industries in Bangladesh and Thailand was published last month and was broadcast on CNN. The visit to the shrimp industry units is meant to verify the information provided in the report. Representatives of the International Labour Organisation, European Union, the US embassy and journalists will be on the team. ‘Everything cannot be solved overnight. We are trying to improve the situation. Work will continue in phases,’ the adviser told the news agency. ‘We are visiting the scene to review the ground reality.’ ‘If there is any problem, it will be solved. We are approaching the whole issue in a problem-solving manner. Everything has to be done in a systematic way. Many steps have already been taken,’ he said. The shrimp industry, Bangladesh’s second largest export earner after garments, is an important sector, especially for ‘empowering the poor’. Hossain Zillur said, ‘We appreciate all credible evidence which can help us improve the situation. But we also insist that all evidence is credible and up-to-date.’ ‘We would also appreciate if those improving the situation are encouraged rather than punished,’ he said. Bangladesh Shrimp and Fish Foundation chairman Syed Mahmudul Haque told the news agency, ‘The publication of such a report at a time when work is being done to improve labour compliance in the shrimp industry is unfortunate.’ Since the introduction of the new labour law in October 2006, a number of steps have been taken, Haque said.
— Bdnews24.com
Inflation rises again in India
India’s annual inflation rate rose marginally to a near four-year high at 7.61 per cent on the back of rising food prices, official data released Friday showed. The government immediately announced prices were stabilising and would soon come down after weeks of steady increases. Inflation moved up for the week ended April 26 from 7.57 per cent the previous week, according to the Wholesale Price Index, India’s most closely watched cost monitor. The latest figures came a day after the government halted futures trading in key staple foods such as chickpeas, soybean oil and potatoes for four months to try and tame surging prices. The government had already suspended futures trading in other basic foods such as rice and wheat. Futures contracts involve betting on future price movements of such items as commodities, bonds, currencies and shares. This week, steelmakers pledged to cut prices after a plea by the government which has had to watch as prices soared far above the Reserve Bank of India’s declared comfort level of 5.50 per cent for the current financial year to March 2009.
— AFP
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