NEWS,02.07.2013

UK union to take postal protest to banks

Trade unions opposing the privatisation of the British postal service will hold a protest next week at the London offices of the banks advising the government on the float.
Goldman Sachs and UBS, located in London's financial district, will be the focus of the protest, which forms the centrepiece of a week of activity planned by union branches across the country.
The government, which hopes to launch the stock market flotation of the country's 497 year-old postal service later this year, says the Royal Mail needs to access private capital and modernise. Royal Mail said the privatisation would allow it to secure as many jobs as possible.
But the plans have been criticised by unions, which say the sale will spark a decline in postal service provision and working conditions for the company's 150 000 employees.
"We're going to tour the city and take this campaign to the banks that are selling this company," said Kevin Slocombe, the head of the Communication Workers Union (CWU) campaign.
"This is a good attempt to really engage people in the city... the banks and the people who actually buy shares."
UBS and Goldman Sachs both declined to comment on the protest.
Royal Mail chief executive Moya Greene has acknowledged union members will never drop opposition to privatisation but glossed over whether investors had expressed concern at the level of response from the company's workforce.
The CWU protest plans were unveiled at a packed parliamentary lobby on Tuesday, where union members and lawmakers outside the current coalition government spoke to an audience of postal workers.

Three-day ultimatum for Greece - EU

Greece has three days to reassure Europe and the International Monetary Fund it can deliver on conditions attached to its international bailout in order to receive the next tranche of aid, four eurozone officials said on Tuesday.

The lenders are unhappy with progress Greece has made towards reforming its public sector, a senior euro zone official involved in the negotiations said, while another said they might suspend an inspection visit they resumed on Monday.

Athens, which has about €2.2bn of bonds to redeem in August, needs the talks to conclude successfully. If they fail, the International Monetary Fund might have to withdraw from the €240bn bailout to avoid violating its own rules, which require a borrower to be financed a year ahead.

That would heighten the risk that concerted efforts by policymakers over the past nine months to keep a lid on the eurozone crisis could unravel, at a time when tensions are rising in other countries on the region's periphery.

Portugal's Finance Minister Vitor Gaspar, the architect of its austerity drive under an EU/IMF bailout, resigned on Monday in a potential blow to his country's planned exit from an EU-IMF rescue programme.

Political tension has also increased in Italy, where Prime Minister Enrico Letta called a government meeting after a coalition partner threatened to withdraw.

Athens and its creditors resumed talks on Monday to unlock €8.1bn ($10.6bn) of rescue loans, after a two-week break during which the government almost collapsed over redundancies at state broadcaster ERT.

"All agreed that Greece has to deliver (pledges) before the Eurogroup on Monday. That's why they must present again on Friday," a second source told Reuters.

Eurozone finance ministers are scheduled to meet on July 8 and discuss the situation in Greece, which is in its sixth year of recession and has seen unemployment surge to record highs.

Missed deadlines

"It is a very difficult negotiation," a senior Greek official participating in the talks said. "We're moving fast to wrap up as many issues as possible a soon as possible."

But Greece's financial overseers the IMF, the eurozone and the European Central Bank were unlikely to be able to conclude their review in July and might need to suspend the visit and resume it in September, a senior eurozone official said on condition of anonymity.

Representatives of the EU-IMF-ECB "troika" have been holding serial meetings with government ministers in Athens, struggling to agree on a host of outstanding issues.

If talks are not concluded by the middle of month, Athens risked missing the instalment, the Greek official added.

Athens has missed a June deadline to place 12 500 state workers into a "mobility scheme", under which they are transferred or dismissed within a year.

A shortfall of more than €1bn has emerged at state-run health insurer EOPYY, meaning automatic spending cuts may have to be agreed to bring it back on an even keel.

Athens and the troika are also at odds over an unpopular property tax and a sales tax for restaurants.

The government plans to ask its creditors to lower this year's privatisation target of €2.6bn after failing to find a buyer for natural gas company DEPA.

The beleaguered government of Prime Minister Antonis Samaras has ruled out imposing any new austerity measures on a population that is going through the sixth year of recession.

Unemployment has hit a record 27% and Greeks have lost about a third of their disposable income at an average as a result of bailout-imposed austerity policies.

Putin backs white-collar crimes amnesty

Russia's lower house of parliament on Tuesday passed a Kremlin-drafted bill that grants an amnesty to white-collar criminals in a bid to improve the country's frigid business climate.
The amnesty, backed by Russian President Vladimir Putin, covers individuals who have committed an economic crime for the first time.
But critics said the bill was extremely weak and would only affect a tiny minority of prosecuted businessmen.
Kremlin representative Garri Minkh presented the bill to the lawmakers, saying it would impact 1 299 ongoing criminal cases and 22 people who are currently in pre-trial jail.
Minkh said 340 people would be freed from jail due to the amnesty, according to the State Duma website.
Human rights groups have expressed concern that the measure is too limited because it would not cover some of the biggest Putin critics who have been jailed for disputed business crimes.
Putin said the new law would cover only those who committed business-related crimes for the first time and not apply to repeat offenders.
Boris Titov, a business ombudsman who backed the bill, expressed disappointment that the result was not a wider amnesty.
It will not affect Russia's jailed former oil tycoon and repeated Kremlin critic Mikhail Khodorkovsky - now serving his second consecutive jail sentence for white-collar crimes he disputes.
Opposition leader Alexei Navalny, currently on trial for fraud in a timber deal, would also not benefit from the amnesty.
Khodorkovsky's attorney Vadim Klyuvgant said on June 22 that the bill was so weak that it looked like the government was only trying to score public relations points instead of actually changing the legislation.
The legislation is now expected to be comfortably passed by the Federation Council upper house of parliament before Putin signs it into law.

 

Lack of capital may curb airline growth

The International Air Transport Association (Iata) called for new thinking on the relationships between partners in the air transport value chain in order to attract the $4-5trn that will be needed over the next 20 years to meet the growing demand for aviation-enabled connectivity.

An Iata study, supported by analysis from McKinsey & Company, shows that returns on capital invested in airlines have improved in recent years, but are still far below what investors would normally expect to earn.
 
“Aviation supports some 57 million jobs globally and we make possible $2.2trn worth of economic activity. By value, over 35% of the goods traded internationally are transported by air,” said Tony Tyler, Iata’s Director General and CEO.

“But in the 2004-2011 period, investors would have earned $17bn more annually by taking their capital and investing it in bonds and equities of similar risk.”

Unless the airline industry could, therefore, find ways to improve returns for its investors, it may prove difficult to attract the capital needed to serve the expansion in connectivity, especially to support growth in developing economies.

During the 2004-2011 period, returns on capital invested in the airline industry worldwide averaged 4.1%. This is an improvement on the average of 3.8% generated in the previous business cycle over 1996-2004.

However, this is nowhere near the average cost of capital of 7.5%, which represents the return on capital that investors would expect to earn by investing in assets of similar risk outside the airline industry.

While some airlines have consistently created value for equity investors, these are few in number. On average industry returns were just sufficient for the industry to service its debt, with nothing left to reward equity investors for risking their capital.
 
The study showed that over the past 40 years virtually all industries have generated higher returns on invested capital (ROIC) than the airline industry.

Moreover, airlines are the least profitable segment of the air transport value chain while other segments consistently generate good returns for their investors.

The biggest cost for airlines today is fuel and companies in this sector benefited from an estimated $16-48bn of their annual net profits generated by air transport.

The most profitable part of the rest of the value chain is in distribution, with the computer reservation systems businesses of the three global distribution system companies generating an average ROIC of 20%, followed by freight forwarders with an ROIC of 15%.
  
 “More effective partnerships are required among stakeholders in the air transport industry. Efficiency gains are a win-win for all concerned,” said Tyler.

An agenda for governments is also outlined in the study.

“Smart regulation is needed from governments around the world in order to maximise the economic benefits of connectivity jobs and growth,” said Tyler.

“Unfortunately, high taxation and poorly designed regulation in many jurisdictions make it difficult for airlines to develop connectivity. On top of the cost issues, airlines also face a hyper fragmented industry structure owing to government policies that discourage cross-border consolidation.”

Saudi taps new oil areas

Saudi Aramco plans to develop two less productive areas of major oilfields, industry sources said, as Riyadh takes care to maintain excess capacity for the long term, even while non-Opec oil supplies are on the rise.

The plan to increase capacity from Khurais and Shaybah by a total of 550 000 barrels per day (bpd) by 2017 will take the strain off Ghawar, the world's largest conventional oilfield, two sources familiar with the plans said.

Such projects are not intended to raise Saudi production capacity beyond the current stated 12.5 million bpd, Saudi oil officials have previously said.

After pumping its biggest fields at near record rates to make up for lost supplies from Libya and Iran over the last two years, the kingdom wants to focus on less productive fields to ease pressure on aging reservoirs to help keep their output robust.

"The targeted area includes the two fields south of Khurais, Abu Jiffan and Mazalij, which are smaller complex fields that have not produced much oil in past years," Sadad al-Husseini, a former top executive at Saudi Aramco, said.

"As for Shaybah field, they want to mainly raise production from the south where the reservoir is less productive and to gather large volumes of additional natural gas liquids, which are recovered from the associated gas."

By 2017, Saudi Aramco aims to boost capacity at Khurais by 300,000 bpd to 1.5 million bpd and at Shaybah by 250,000 bpd to 1 million bpd, the sources said.

The company could not immediately be reached for comment.

Saudi Arabia had planned in 2008 to increase production capacity to 15 million bpd but then put the plan on hold after the financial crisis.

A surge in North American unconventional oil over the last few years, meanwhile, has taken pressure off Riyadh. Officials now say there is no plan to expand beyond the kingdom's current capacity.

Aramco is still investing in new production projects, however, to increase its options and take pressure off big fields such as Ghawar and Abqaiq that have been the main source of wealth for the economy for decades.

Husseini said the expansion plans would require new oil and gas processing facilities and a dedicated pipeline to transport natural gas liquids from Shaybah.

Aramco completed a large capacity expansion plan in 2009-2010, which included the start-up of Khurais and the expansion of Shaybah to 750 000 bpd.

Khurais contains highly prized Arab Light crude, which is easily converted into transport fuels.

Emerging market borrowers left stranded

Developing countries that did not take advantage of historically low yields by selling international bonds in the first half of 2013 are finding themselves left high and dry as borrowing costs rise.

Emerging market borrowers sold more than $200bn of bonds between January and July, a record-breaking streak that culminated in April with the startling sight of Rwanda issuing a 10-year dollar bond at a yield of less than 7%.

But the US Federal Reserve's indication that it will turn off the liquidity taps which have depressed interest rates in the West and fuelled demand for higher-yielding assets has burst a bubble that had developed in emerging debt, bankers say.

"In March/April, some valuations were very high - investors were awash with liquidity and were desperate for higher-yielding instruments," said Chris Tuffey, head of EEMEA debt capital markets at Credit Suisse. "Prices got to levels driven by technicals rather than fundamentals."

Issuance fell dramatically last month, when only 25 bonds were issued, according to Thomson Reuters data, compared with 82 in May, 103 in April, and 66 in June 2012. Emerging debt prices have fallen as a sharp rise in US yields robs riskier borrowers of their usual yield appeal.

Countries such as Bahrain, Nigeria and Russia have continued to hold investor presentations, known as roadshows, or assigned lead managers for planned international debt sales, but no bonds have followed.

Borrowers have regularly held "non-deal" roadshows since the 2008/09 financial crisis made them nervous of committing to a particular timetable for issuing debt, although investors say such pitches always take place with a bond sale in mind.

Markets have been so favourable until recently, however, that even unfamiliar names, such as last year's debut borrower Zambia, were able to raise money as soon as their roadshows ended, drawing massive demand.

Costing rising

Emerging market debt was yielding on average less than 5% in April, an unprecedentedly low level, but that has now risen to around 7 percent, meaning that borrowers will have to pay much more for their funding.

Rising interest costs could make life difficult for countries already struggling with high debt and deficits.

"A lot of issuers have not fully woken up to the fact that issuance at higher yields will significantly change the debt sustainability picture," said David Hauner, head of EEMEA fixed income strategy at BofA-Merrill Lynch Global Research.

Nigeria finished a roadshow last week but no bond followed, while African countries waiting in the wings include Kenya and Tanzania.

Other countries which have held roadshows in the past few weeks include Latvia and Ukraine, according to Thomson Reuters market news and information service IFR.

Some, such as Kenya, which has made and dropped plans for its first Eurobond several times since 2007, may not have any pressing need to borrow, while others may find alternative and cheaper sources of funding.

Ukraine's debt insurance costs have recently hit 18-month highs, however, as investors worry that without an International Monetary Fund deal, the country will not be able to refinance its debt. Kiev sold a $1 billion 10-year Eurobond in April and said it aimed to raise another $2.5bn this year.

More regular sovereign borrowers may also struggle to complete their annual issuance programmes, let alone borrow in advance of next year's plan, as countries often seek to do.

Turkey has raised $4.2bn of its $6.5bn borrowing target for this year, while Hungary has completed $3.25bn of a 2013 target of around $5.5bn.

"People used to do a lot of pre-funding and that won't be the case any more," said Gorky Urquieta, co-head of emerging markets debt at asset manager Neuberger Berman.

Holding back

Companies and financial firms, which made up the vast bulk of this year's issuance, are also holding back.

Turkish banks Ziraat and Yapi Kredi are among those who have said they are waiting for better market conditions, while Nigeria's Diamond Bank ended a roadshow last week without a deal.

Bankers involved in emerging market debt remain optimistic the recent rise in US Treasury yields may be temporary, saying this month's US employment numbers and Federal Reserve meeting could put a different complexion on the Fed's intentions.

If that is the case, for emerging market borrowers, "the summer should be active, rather than quiet," said Credit Suisse's Tuffey.

But countries and companies who missed the window which closed in April will have to resign themselves to borrowing at higher rates.

"Emerging markets will never have it as good again," BofA-ML's Hauner said.

NEWS,14. AND 15.06.2013

Tax raid tarnishes India's gold industry

A raid by dozens of tax inspectors on one of India's biggest gold traders this week has tarnished the reputation of an industry worth more than $70bn a year and put at risk its access to funding, a bullion importers' group said.
"The jewellers' fraternity, be it small or big, is feeling disgraced that we've been made to look so negative," Mohit Kamboj, president of the Bombay Bullion Association, told a news conference in Mumbai on Friday.
Income tax officials this week swooped on about 50 offices of RiddiSiddhi Bullions, a leading gold importer.
The raid was part of a probe into financial transactions for suspected bogus imports and exports, said Swatantra Kumar Singh, director general of investigations at the tax department.
Prithviraj Kothari, managing director of RiddiSiddhi Bullions, could not be reached by telephone for comment.
He said in an emailed statement to news media that he would cooperate fully with the authorities and described their action as a "routine survey".
The probe coincided with a drive by the government to rein in imports of gold by a country that is already the world's largest buyer of bullion. Gold imports, which hit a monthly record of 162 tonnes in May, are largely to blame for a ballooning current account deficit.
Other jewellers and dealers were also raided in Mumbai's Zaveri Bazaar, a maze of narrow streets and dilapidated shops that is home to India's biggest bullion market, Singh told Reuters in a text message.
He said on June 12 that tax officials had seized about $1.4m from Kothari's head office in the centre of Zaveri Bazaar and other offices of the company across India.
India's appetite for gold is vast, with imports hitting a record 969 tonnes in 2011. The government moved this month to tame demand with a 50% hike in import duty to 8%.
India used to ban imports of gold and most of it was smuggled into the country until the 1990s, when controls were relaxed.
Kamboj said the sensation caused by this week's raids had damaged relations between jewellers and banks, which are a major source of funding for an industry largely made up of small, family-run shops that cannot afford to carry large stocks.
"If any jeweller goes to a bank then they are treated as if they are frauds or smugglers," the association president said.

UK power prices may fall

British power prices may fall after its electricity market links more closely with others in Europe later this year, increasing cross-border trading, one of the project leaders said on Friday.
From November onwards, Britain's electricity market will be directly linked to those of Germany, France, the Netherlands, Belgium and the Nordic states via a mechanism that will distribute power automatically and more evenly between major delivery points as it is needed.
The so-called market coupling project aims to eventually integrate all of Europe's power markets to create one price for European energy consumers and to hedge against supply shocks.
Britain's power market has fewer connections to its neighbours and is less liquid than most others in western Europe, and its power prices have recently been higher.
For Britain, market coupling will bring a boost to the number of trades on its short-term market, said Bente Hagem, co-chair of the coupling project.
"Liquidity in the UK will increase for the day-ahead market through coupling. That will be positive for the price formation," she told journalists at a news conference.
Exposure to the wider market is likely to bring Britain's prices more in line with those on the continent.
The Dutch, German, French, Luxembourg and Belgian electricity markets were already coupled in November 2010, which has helped their prices converge.
Closer ties will also mean, however, that British consumers may be more prone to price changes in surrounding markets, for example those caused by extreme swings in German renewable energy production.
The European Union has set an end-2014 target for Europe's electricity markets to be fully integrated to distribute renewable energy flows and prevent energy supply crises.
The complexity of uniting trading and capacity allocation systems, however, has made meeting that deadline unlikely, said Jean-Francois Conil-Lacoste, the second co-chair of the project and head of European day-ahead power bourse EPEX Spot.
"We have a deadline of end-2014, which is very ambitious, and we can probably safely say that unfortunately we will not meet the deadline for all of Europe," he said at the same conference.
Markets in central-eastern Europe have taken the first steps to couple their regions, and south-eastern markets are also gearing up to eventually join the creation of a Europe-wide integrated market.

A surefire bet?

Puffing on slim metal tubes loaded with pale yellow liquid, two London businessmen say they have between their lips a cure for what the United Nations calls "one of the biggest public health threats the world has ever faced".
Electronic cigarettes are the future, they argue. Cheaper, cleaner and cooler than smoking, "vaping" - using a vaporiser to inhale nicotine infused with exotic flavours ranging from pina colada to bubblegum - will spell the end of tobacco.
"After I first tried this, I left half a cigarette in the ashtray and never went back," says Zoltan Kore, who co-runs the newly opened London e-cigarette shop "Smoke No Smoke".
"I'm not a smoker now, I'm a vaper," says business partner Gabor Kovacs. "The awful morning coughing fits have gone, and the waking up in the night struggling to breathe has gone, too."
Such stories - and hopes of persuading the rest of the world's billion smokers to stub out their tar and toxin-loaded cigarettes, cutting a catalogue of chronic disease risks as they do - are tantalising for public health experts.
And since "vaping" doesn't entail kicking the addiction either to the stimulant nicotine or to the behavioural habits of smoking some say it can help smokers quit much more effectively than nicotine gum or patches.
Cool alternative or dangerous gateway?
All the top tobacco companies are now placing bets on e-smokes, which some analysts predict may outsell conventional cigarettes in 10 years, raising the counter-intuitive prospect that Big Tobacco could actually help people quit smoking.
Celebrities like Bruno Mars and Courtney Love are also endorsing them, a further inducement to makers of iconic cigarette brands like Marlboro and Camel to invest.
Yet e-cigarettes are far from universally accepted as a public health tool; regulators are agonising over whether to restrict them as "gateway" products to nicotine addiction and tobacco smoking, or embrace them as treatments for would-be quitters.
A big issue is the lack of long-term scientific evidence to support the safety and effectiveness of e-cigarettes, prompting critics like the British Medical Association (BMA) to warn of the dangers of their unregulated use.
"These devices may also undermine efforts to prevent or stop smoking by making cigarette use seem normal in public and at work," argues the BMA, which has called for vaping to be banned in public places in Britain, just as smoking is.
The World Health Organisation (WHO) is equally wary, saying that until e-cigarettes have been endorsed as safe and effective by national regulators, "consumers should be strongly advised not to use any of these products".
Supporters of e-cigarettes scoff at suggestions they are a hazard or could be a slippery slope for previously addiction-free young people to get hooked on nicotine.
There is, they argue, no evidence of any harm from nicotine consumption and it would be crazy to impose tougher restrictions on e-smokes than on toxic "death sticks" that are freely available to buy on almost every street corner worldwide.
As Adrian Everett, chief executive of Britain's leading e-cigarette company E-Lites, put it in a comment to Reuters: "Comparing electronic cigarettes to tobacco is like comparing playing football to juggling live hand grenades."
Big killer
While the debate rumbles, smoking is killing half of all those who do it. Tobacco has an annual death toll of 6 million people, and that could exceed 8 million by 2030 unless something urgent is done to stop people smoking, according to the WHO.
As well as causing lung cancer and other chronic respiratory diseases, smoking is also a major contributor to cardiovascular diseases, the world's number one killer.
"This could be the most effective method of smoking reduction that we have ever had," says Konstantinos Farsalinos of the Onassis Cardiac Surgery Centre in Greece, who has conducted several studies exploring the risks of vaping.
His work, some of which has had some funding from makers of e-cigarettes, has found no adverse effects on heart function, nor any notable cancer risks to cells in the lungs.
Other research, however, suggests "vaping" may reduce lung capacity, and the German Cancer Research Centre said last month it was concerned e-cigarette liquids contained ingredients that can irritate the airways, while poor quality products could contain carcinogens.
Against this background, a growing number of regulators see a need to control standards in a largely unregulated sector.
Britain became the latest to take the plunge this week by opting to regulate e-cigarettes as non-prescription medicines, after finding widely varying nicotine levels and contaminants in some existing products. This means manufacturers will need a licence from 2016, though they will still be sold in general stores.
A few countries have banned them outright - such as Brazil, Norway and Singapore - while others are opting for varying degrees of regulation, in some cases including limits on advertising and curbs on their use in public places.
France said last month it would impose the same restrictions on e-cigarettes as on conventional ones.
The European Union is proposing to limit the amount of nicotine they can hold before regulation kicks in, while the US Food and Drug Administration has so far adopted a light touch, saying it plans to regulate e-cigarettes as it does tobacco.
Greater regulation, in one form or another, may sink smaller players that cannot afford to navigate through various licensing systems. But the rest will benefit from a halo of legitimacy.
In particular, that could play into the deep pockets of Big Tobacco - a prospect that makes some campaigners uneasy.
"Tobacco companies seem to be playing both sides of the game by selling cigarettes that cause thousands of deaths a year but also selling products designed to reduce the harm," says Martin Dockrell of British campaign group Action on Smoking and Health.
"There are some real risks here that need to be managed."
No-brainer for Big Tobacco

Big tobacco companies are jumping on the e-cigarette bandwagon with a range of strategies to tap into a market that some analysts believe could eclipse traditional cigarettes in 10 years.

They are competing with hundreds of smaller companies in the global e-smoking market, which Euromonitor estimates was worth more than $2bn in 2012.

Here is a snapshot of recent Big Tobacco initiatives:
Altria: the owner of Marlboro cigarettes maker Philip Morris said on June 11 its Nu Mark subsidiary would launch e-cigarettes under the brand name MarkTen in Indiana in August. It is the last of the large US tobacco firms to enter the space.
Reynolds American: the maker of Camel cigarettes said on June 6 it would expand the testing of its Vuse e-cigarettes to retail outlets in Colorado, beginning in July.
Imperial Tobacco: the maker of Gauloises cigarettes said on April 30 it had set up a venture called Fontem to develop e-cigarettes.
Lorillard: the maker of Newport menthol cigarettes paid around $135m in April 2012 to acquire Blu Ecigs, a leading e-cigarette company.
British American Tobacco: the maker of Kent cigarettes set up Nicoventures in 2011 as a standalone company to develop smokeless nicotine products. It already has a product, which it is working on with Consort Medical, under regulatory review in Britain.

Outlook better for global food markets

The overall outlook for supplies of basic food commodities to global markets has improved since poor wheat harvest and tight conditions a year ago,the UN's food agency said on Thursday.
The cereal supply-and-demand balance in the 2013-2014 season was expected to be "comfortable", the agency said, but it warned about the pace of imports of rice by China.
The agency said that it expected food commodity markets to be more balanced in 2013 to 2014, with rising prices on fish and meat forecast to offset lower prices for some commodities such as sugar.
The Rome-based Food and Agricultural Organisation (FAO) said in its biannual Food Outlook report that the "global food import bill is forecast to reach $1.09trn in 2013 - 13% below the record of 2011 but close to the 2012 estimate".
World sugar production was estimated to reach a new record in 2012-2013, "one that will be more than sufficient to cover projected global consumption," it said.
"After a relatively tight situation in 2012-2013, characterised by reduced grain supplies and high prices, good production prospects and a likely replenishment in world stocks could pave the way for calmer markets and some easing of prices in the new season," it said.
The news was also positive for wheat, with record world production this year boosting supplies. Lower import demand was also likely to stabilise the market and keep prices down.
"The bulk of the recovery is forecast to be concentrated in some of the major producing countries that harvested poor crops in 2012, in particular in Europe and the Black Sea region," it said.
In terms of rice, the FAO said international prices had generally been stable in the first five months of 2013, but that market attention was now "focusing on future decisions regarding releases from public stocks in Thailand and on India's availabilities for export."
The agency said the pace of China's rice imports was also "becoming critical".
International prices for meat, dairy and fish were expected to rise, the report said.
"World meat production is anticipated to grow by only 1.4% in 2013, to 308.2 million tonnes. Meat prices remain at historically high levels which, as of May, have not shown signs of decreasing in spite of reduced feed costs," it said.
Meat prices have remained at historically high levels since the early part of 2011. Export prices on average this year rose marginally for poultry and pork, remained stable for beef, and fell for lamb.
Prices of dairy products "have risen in the face of limited export supplies", and while milk production continues to increase, especially in Asia, growth in the main exporting countries is expected to be limited.
In terms of fish, tight supply and higher feed costs for several key traded species such as salmon and shrimp are pushing international seafood prices higher.
However, "overall supply is still growing thanks to aquaculture, with strong local and regional demand sustaining production growth in the developing countries," the FAO said.

Greek PM's offer on broadcaster rejected

Partners in the Greek coalition government on Saturday rejected Prime Minister Antonis Samaras's offer to partially reopen the state broadcaster, saying it had to be entirely reinstated.

Samaras triggered a nationwide uproar when he and Finance Minister Yannis Stournaras signed a legislative act shutting down ERT's television and radio stations last Tuesday in the latest austerity cutback.

But then Samaras offered to partially reinstate ERT.

"We do not agree with this proposal and we demand the immediate cancellation of the legislative act," Andreas Papadopoulos, spokesperson for the small leftist democratic Dimar party, told AFP.

Dimar is one of the three members of the ruling coalition, along with Samaras's conservatives and Pasok's socialists. The act was signed without the agreement of Dimar and Pasok.

Samaras heads the fragile coalition in a careful balancing act to enact unpopular austerity reforms in return for bailout loans from the European Union and International Monetary Fund.

Decision defended

Pasok, a pillar of the coalition, also demands ERT's reopening while recognising, like Dimar, "the need for restructuring" of the 60-year-old broadcaster.

Samaras called on Friday evening on his government partners to set up a body charged with resuming "immediately" the broadcast of information programmes before creating a new radio-television broadcaster, envisioned in a draft law presented on Wednesday by the government spokeperson.

Samaras's proposal "is not a response to what Pasok had said", a party official said.

"As soon as ERT reopens, we will agree to setting up a commission to elaborate a restructuring plan on the basis of European audiovisual bodies, which will be proposed over the next two to three months with the aim of reorganising ERT," Papadopoulos said.

In a column published Saturday in the liberal daily Kathimerini, Samaras defended his decision to shut down ERT, which he said showed his government's "political will and determination" to fight waste and lead his country out of crisis.

Samaras's administration is under heavy pressure from Greece's EU-IMF creditors to dismiss thousands of state workers to maintain access to bailout loans.

ERT has a long history of nepotistic hiring practises and government-biased news coverage, but it also provides an invaluable link to the Greek diaspora, border areas and isolated islands.

The government says it will compensate ERT's almost 2 700 employees and has pledged to set up a new public broadcaster with less than half the staff before the end of summer.

A crucial meeting on the subject is planned for Monday evening between Samaras and the heads of Pasok and Dimar, Evangelos Venizelos and Fotis Kouvelis, amid continuing protests at ERT headquarters and strikes by Greek journalists.

Obama in Africa: Great 'bang for buck'

The White House on Friday insisted President Barack Obama's looming trip to Africa was overdue and would give great "bang for the buck", pushing back at concerns over the journey's cost.
Ben Rhodes, a top foreign policy aide to Obama, admitted that the president, despite his Kenyan heritage, had focused far more on other regions, including Asia and Europe, than Africa, despite crucial US interests there.
"For the United States to say we're a world leader except in this continent doesn't make any sense," said Rhodes, a deputy national security advisor.
"The US would be ceding its leadership position in the world if the president of the United States was not deeply engaged in Africa," Rhodes said.
Obama is due to travel to Senegal, South Africa and Tanzania on a trip beginning at the end of this month for his first prolonged stay on the continent since taking office.
He has previously visited sub-Saharan Africa only once as president, with a short stay in Ghana in 2009.
Rhodes noted that Obama had travelled multiple times to the Asia-Pacific region, as part of a rebalancing of US foreign policy there and had made many trips to Europe, so Africa needed some attention.
"Africa's a critically important region of the world. We have huge interests there. You've got some of the fastest growing economies in Africa.
"You've got a massively growing youth population.
"You've got key security and counterterrorism issues that we work on with African countries," he said, adding that key US interests in combating HIV/Aids, and in supporting global health were also rooted in the continent.
"This is a deeply substantive trip and one that has been highly anticipated on the continent.
"Frankly, there's been great disappointment that the president hasn't traveled to Africa until this point other than a brief stop in Ghana."
"The president is not going to retreat from an entire continent."
The Washington Post reported on Thursday that plans for Obama to take a safari with his family in Tanzania had been cancelled due to budgetary concerns.
The newspaper, citing a Secret Service planning document, said the excursion would have required Obama's counter-assault team to carry sniper rifles with high-caliber rounds that could neutralise cheetahs, lions or other animals.
The paper said Obama's Africa tour, his first since taking office in January 2009, could cost the US government between $60m and $100m, based on cost of similar trips in recent years.
The report comes as many government agencies struggle with mandatory budget cuts that took effect in March because US lawmakers failed to strike a wider budget deal.
Hundreds of Secret Service agents are dispatched for the president's overseas visits along with dozens of vehicles, planes and other military and security assets.
The White House said that it was up to the Secret Service to determine costs and security needs for the US leader abroad - as was the case under former presidents George W Bush and Bill Clinton for instance.
Both Bush and Clinton undertook significant tours of Africa as president, requiring the vast security and logistical infrastructure that follows the US leader wherever he goes.
Rhodes, noting that other powers, including China, were seeking to increase their influence in Africa, portrayed Obama's upcoming visit as a smart investment.
"There will be a great bang for our buck for being in Africa.
"When you travel to regions like Africa that don't get a lot of presidential attention, you tend to have very long-standing and long-running impact from the visit."

US: Snowden will be held accountable

The United States is confident it will bring Edward Snowden to justice for "extremely damaging" leaks about secret internet surveillance programmes, US Attorney General Eric Holder said on Friday.

Snowden is hiding in Hong Kong and the United States has launched a criminal investigation after the former CIA technical assistant blew the lid on the National Security Agency's (NSA) vast electronic surveillance operation.
"This case is still under investigation and I can assure you that we will hold accountable the person responsible for those extremely damaging leaks," Holder told a news conference in Dublin after a meeting with EU officials.
"The national security of the United States has been damaged by those leaks. The safety of the American people and safety of people in allied nations is at risk," he said.
"I am confident that the person who is responsible will be held accountable."
Holder also said that he had agreed to share details with the European Union about the so-called Prism programme, which was exposed after Snowden spoke to British and American newspapers.
The 29-year-old Snowden has vowed to fight any bid to extradite him.

NEWS,12.06.2013

Swiss upper chamber approves US tax deal

The Swiss upper house of parliament backed on Wednesday a bill that would let Swiss banks hand over information to the US authorities to help settle a dispute on tax evasion.
After US action over tax evasion led to the closure of the country's oldest private bank earlier this year, and with formal investigations under way into some of its biggest institutions, the Swiss government urgently wants a compromise to end threats of criminal charges that have hurt a vital national industry.
The bill, which is set to go to the lower chamber next week, would allow banks to sidestep secrecy laws to strike settlements with US prosecutors, expected to include heavy fines which might amount to $10bn for the whole industry.
Though opposition to the draft law has been vocal from left to right as lawmakers chafe at what some call US blackmail, 24 lawmakers voted in favour of the bill and only 15 opposed. The draft law is likely to face tougher debate in the lower house.
The country's biggest bank UBS was forced in 2009 to pay a fine of $780m and deliver the names of more than 4 000 clients to avoid indictment, giving the US authorities information that allowed them to then pursue other Swiss banks.

Iraq to get $6trn from new energy plan

Iraq on Wednesday unveiled an ambitious energy strategy that aims to see it raise $6 trillion from oil and gas sales by 2030 and massively increase local power generation, a major domestic complaint.
The plan, dubbed the Integrated National Energy Strategy, would see Iraq invest some $620bn in the sector over nearly two decades, in a bid to substantially increase living standards and employment levels in a country badly hit by decades of conflict and sanctions.
"The strategic goals of the plan are to meet local energy needs, maximise government revenues, encourage economic diversification and improve the standard of living and create jobs," said Thamir Ghadhban, a former oil minister and the head of Prime Minister Nuri al-Maliki's advisory committee.
In all, Iraq aims to increase oil production to 4.5 million barrels per day by 2014, and about double that by 2020 in its "medium" scenario, with all domestic energy requirements met by 2022.
The country projects it will raise about $6trn in revenues by 2030, about 85% of which will come from oil exports.
It also aims to diversify its oil-dependent economy and add 10 million new jobs, with planners arguing that by 2020, non-energy sectors of the economy will grow faster than oil and gas.
Iraq has sought in recent years to dramatically increase its oil production in order to fund reconstruction of its battered economy and dilapidated infrastructure.
But while output has increased, unemployment remains high and Iraqis frequently complain about a lack of improvement in daily living standards.
Tempers run particularly high during the country's boiling summer, when most residents receive only a few hours of government-supplied power per day.

Electricity market shake-up looms in UK

Britain's energy watchdog on Wednesday proposed changes to prise open the grip of big suppliers on the wholesale electricity market and increase choice for consumers.
The objective was to create "a more level playing field", over concerns about the pricing power of eight companies.
The driving idea behind the change is to increase competition and improve opportunities for small suppliers.
Ofgem said that under its proposals the big six suppliers British Gas Centrica, EDF Energy, EON, RWE Npower, Scottish Power and SSE will have to post the prices at which they buy and sell wholesale electricity on power trading platforms up to two years in advance.
The changes were aimed also at putting pressure on Britain's two biggest independent power generators Drax Power and GDF Suez Energy UK while the eight indentified companies must together trade fairly with small suppliers or face financial penalties.
"Ofgem's proposals would mean that the big six and the two largest independent power generators cannot refuse any reasonable requests by small suppliers to buy electricity," the regulator said in a statement.
"They must also ensure that they sell power to small suppliers at a fair price and negotiate fairly with them at all times."
Andrew Wright, senior partner for markets at Ofgem, said the regulator wanted also "to improve consumer confidence and choice by putting strong pressure on prices through increased competition in the energy market.
"Ofgem's proposals will break the stranglehold of the big six in the retail market and create a more level playing field for independent suppliers, who will get a fair deal when they want to buy and sell power up to two years ahead," he added in the statement.
Wright said greater price transparency would also assist investors seeking to build new generation plants and help secure supplies for consumers, "who are also set to benefit from a simpler, clearer and fairer energy market".
Edward Davey, Secretary of State for Energy and Climate Change called on companies "to work with Ofgem to implement these proposals as swiftly as possible", adding that the government stood ready "to take necessary measures to improve energy market liquidity should Ofgem's proposals be delayed or frustrated".

Broader bank data swap in tax dodge fight

The European Commission proposed to expand the kind of customer information that banks must surrender to authorities around the European Union, as political momentum grows to clamp down on tax dodging.
Algirdas Semeta, the EU official in charge of tax policy, outlined proposals on Wednesday for banks to disclose account balances, dividends and capital gains, to catch sophisticated schemes not covered by the simpler EU rules now in place.
But the Commission's suggestion will likely face opposition from Luxembourg, which does not want to be forced to lift its veil of banking secrecy higher than that of neighbouring Switzerland, its chief rival as a financial centre.
"Member states will be better equipped to assess and collect the taxes they are due," Semeta said. "It will be another powerful weapon in our arsenal to lead a strong attack against tax evasion."
Banking secrecy is high on the political agenda ahead of German elections later this year and following the resignation of a French budget minister over a secret Swiss account.
Luxembourg has signed up to exchanging information about the bank accounts of EU citizens from 2015, but its officials have been rowing back in private on the type of data they are willing to hand over.
Luxembourg does not want to agree to a revised version of the EU savings tax regime that would extend beyond simple interest payments on saving accounts, which are little used to hide income, to include foundations and trusts.
The tiny but wealthy state has an important banking sector and a lot to lose, particularly if customers were lured away by a Swiss financial sector subject to laxer rules.
Switzerland is the world's biggest home for offshore assets, totalling $2 trillion and four times the size of those held in Luxembourg.
Luxembourg is awaiting the outcome of talks between Brussels and Switzerland on a similar agreement to swap information. Semeta will kick-start those talks next week on a trip to meet Swiss Finance Minister Eveline Widmer-Schlumpf.