PR Resource – Muarateweh.net

(Bloomberg) – India, the world’s biggest consumer of sugar, permitted duty free imports of the sweetener for sale domestically to prevent an increase in prices as output slumps.

Mills can purchase raw sugar abroad provided they export a similar quantity after processing within two years, Vinay Kumar, managing director of the National Federation of Cooperative Sugar Factories Ltd., said in a phone interview in Mumbai.

Purchases by the South Asian country may help support a rally that’s made sugar the second-best performing agricultural commodity this year. Prices in New York climbed to more than a three-month high on Jan. 26 on speculation that India will buy the sweetener for the first time since 2006.
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(Bloomberg) — Asian currencies fell, led by the South Korean won and the Indonesian rupiah, on speculation a slumping U.S. labor market will erode demand for exports and spoil returns on the region’s assets.

The won, Asia’s worst performer of 2008, weakened as foreign investors sold more Korean shares than they bought for the first time in seven days. The rupiah fell, snapping a three- day gain, as global equities declined following a private report that showed U.S. job losses increased in December. The ringgit slid to a three-week low before a report that will probably show slumping Malaysian manufacturing.

“Risk aversion is picking up again,” said Nizam Idris, a currency strategist in Singapore at UBS AG, the world�¢â‚�™s second- largest currency trader. “The market is concerned about the economy again. Under this sort of environment, Asian currencies will weaken.ââ��

The won, which lost 26 percent last year, fell 3 percent to 1,333 per dollar as of the 3 p.m. local close, according to Seoul Money Brokerage Services Ltd. The rupiah dropped 1.5 percent to 10,960, MalaysiaÃ�€��s ringgit declined 1 percent to 3.5375 per dollar, and Taiwan’s dollar slid 0.4 percent to NT$33.115. (continue reading…)

Source: Reuters news

Cuba’s trade deficit soared by nearly 70 percent, or an estimated $5 billion, in 2008 due mainly to rising prices for imports such as food and oil and falling prices for nickel, its main export, official media said on Friday.

Foreign Trade Minister Raul de la Nuez said in a speech to parliament deputies on Thursday that imports surged 43.8 percent while exports grew just 2.1 percent, said the Communist party daily, Granma.

The news follows reports that Cuba, battered by three hurricanes and the global financial crisis, is facing a cash crunch that is forcing it to seek debt restructuring with various countries and companies and delay cash transfers for payments abroad.

“Dealing with the trade balance is a strategic issue for the country’s economic survival,” Ricardo Cabrisas, vice president of the Council of Ministers in charge of international economic relations, told the meeting.

Granma gave no figures for 2008, but estimates based on the numbers from de la Nuez and data for 2007 would place imports at $16.1 billion and exports at $4.4 billion, leaving a deficit of $11.7 billion.

That would be an increase of $4.8 billion, or 69Ǒ percent, over official figures for 2007, that showed a deficit of $6.9 billion, with exports totaling $4.3 billion and imports $11.2 billon.

The government reports foreign exchange data in the convertible peso which it pegs at $1.08.

President Raul Castro, who formally replaced older brother Fidel Castro as president in February, has been warning for several months Cuba would have to tighten its belt due to rising international prices for food and fuel that had pushed up the cost of imports.

The global financial crisis has made it difficult for Cuba to get credit to purchase imports, which include 60 percent of its food.

Over the last few years Cuba has helped pay for its trade deficit, which is a measure of goods bought and sold, through revenue from tourism and service exports, mainly for health and education to oil-rich ally Venezuela.

Three hurricanes struck the island starting in late August, causing an estimated $10 billion in damages.

Nickel prices have plummeted worldwide amid rising production and falling demand to between $10,000 and $15,000 per tonne from a high of around $50,000 in 2007.

Cuba reported a debt of $17.8 billion and current account balance of payments surplus of $527 million in 2007, based on $9 billion in service exports.

But tourism revenues were expected to increase by just a few hundred million dollars this year and there was no mention by the media on Friday of a significant increase in other service exports, all but ensuring a big deficit in this year’s current account balance of payments.

Mexico suspended purchases from 30 U.S. meat plants due to sanitary issues, which sent U.S. cattle and hog prices sharply lower on Friday and prompted speculation the ban was retaliation against a U.S. labeling law.

Early on Friday, U.S. analysts said the bans were likely because of Mexico’s opposition to a recently enacted meat labeling law. The law, commonly called Country-of-Origin Labeling or COOL, requires that meat packages in U.S. supermarkets carry labels stating the countries where the meat animals were raised.

Mexico and the U.S. Agriculture Department both denied the retaliation charge.

“Countries would go through dispute settlement under either (the North American Free Trade Agreement) or (World Trade Organization) — not use the action of plant-by-plant delistment,” said Amanda Eamich of USDA Food Safety and Inspection Service.

USDA listed the affected plants on its website on Friday, but the suspensions became effective on Tuesday. The listed plants produce beef, lamb, pork, and poultry and can be found here.

Mexico is a leading buyer of U.S. meat and said that purchases from the affected plants could resume as early as Monday.

“If everything goes well, the plants could be re-listed next Monday,” Mexico’s agriculture ministry said on Friday.

The ministry said the affected plants fell short on standards like packaging, labeling, and some transport conditions.

USDA said it is working with Mexico and the meat companies to resolve the issues.

CANADA, MEXICO OPPOSED LAW

U.S. consumer and farm groups say the labeling rules will distinguish U.S.-grown food from imports on the grocery shelf and fulfill the shopper’s right to know about products.

Canadian and Mexican officials have opposed the law arguing that it will have U.S. meat plants and consumers discriminating against non-U.S. animals and meat. Both countries ship livestock into the United States.

“It appears they (Mexican officials) are using this to send a signal to our government that they don’t like COOL,” Don Roose, analyst at U.S. Commodities, said earlier on Friday.

Earlier this year, Mexico had warned many U.S. meat plants of alleged “point of entry violations” and Friday’s suspensions may have been related to that, Jim Herlihy, spokesman for the U.S. Meat Export Federation, said early on Friday.

Point of entry violations could be a number of things including incorrect paperwork or labeling issues, he said.

BANS MAY BE LIFTED SOON

Prior to Mexico saying shipments could resume on Monday, Roose had predicted the bans would be short, because Mexico needs the meat for its population.

“You have to feed the masses,” he said.

News of the bans prompted selling in U.S. cattle and hog markets at the Chicago Mercantile Exchange on Friday, with cattle prices dropping 2 to 2.5 percent and hog prices dropping about 3 percent.

“That is bad news,” Jim Clarkson, Chicago-based analyst at A&A Trading said of Mexico’s action. “They (Mexico) are fighting COOL.”

After Mexico denied it was retaliating for COOL, Clarkson still predicted the labeling law may have helped prompt the bans.

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Source: Reuters

The World Trade Organization has rejected an appeal by China against a ruling that favored the United States in a dispute over car parts, the European Union and Canada.

The WTO appeals panel recommended in a ruling released Monday that China be asked to bring its import tariffs for foreign auto parts into compliance with international trade rules.

U.S. and European trade officials welcomed the decision.

“Especially in light of the current problems faced by the U.S. auto industry, I expect China to comply promptly with its WTO obligations by removing an unlawful and unfair trade barrier that is harming U.S. workers and manufacturers,” said U.S. Trade Representative Susan Schwab.
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China levies value-added taxes on most products, but refunds varying amounts of that tax on goods that are exported. The government usually adjusts the size of export tax rebates for different types of goods when it is trying to encourage or discourage growth in particular industries. It restored or increased VAT rebates to its exporters on 3,770 items on Dec. 1, according to the December issue of China Pulse, an online newsletter published by the U.S. Commercial Service, the Commerce Department’s export arm. The changes affect about 28 percent of China’s total exports, The new rebates for labor-intensive products such as luggage, footwear, hats, umbrellas, furniture, bedding products, lights, clocks and some electrical products, are 13 percent, up from 11 percent. The rebates on tires and some forest products rose to 9 percent, up from 5 percent, while the rebates for glassware increased to 11 percent, up from 5 percent. In addition, China eliminated export tariffs on certain types of steel, chemical and grain products and reduced export tariffs on some fertilizer and aluminum products, also effective Dec. 1. The changes are intended to boost China’s sagging exports. (continue reading…)

By Ma. Elisa P. Osorio in Philstar

Exporters are asking the government not to intervene with the exchange rate and allow the peso seek to its true level of 55 to 56 to a dollar.

In an interview, Philippine Exporters Confederation (Philexport) president Sergio Ortiz-Luis said that the government should allow the peso to move freely in order to help exporters cope with the slowdown in global demand.

Ortiz-Luis said the worst is not yet over for exporters as they expect more retrenchment. “The exchange rate has always been a problem for us,” he explained.

He said the demand for electronics, the country’s largest export, is expected to contract further so the focus must shift to other products like garments, wiring harness, automotive and furniture.
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