The Short View: Commodities and inflation

The Short View: Commodities and inflation

By John Authers, Investment Editor

Published: July 30 2008 20:56 | Last updated: July 30 2008 20:56

In commodities, it is necessary to separate the long from the short term. Over history, they have moved in “super-cycles”, posting big gains every few decades, then oscillating in line with ebbs and flows in storage for a protracted period.

This gives some context to the sudden fall in commodity prices. Over the course of July, the Dow Jones-AIG energy index had at one point fallen 24.5 per cent – if not a bear market, then at least a correction.

This brought US gasoline prices below the psychologically important level of $4 per gallon.

Non-energy commodities sold off less, but only because they were already way below their highs. The DJ-AIG non-energy commodity index is down 14.6 per cent since peaking in March. It is barely up for the year.

In the long run, the sudden splurge this year, particularly for energy, which rose 70 per cent in five months, looks like a perverse departure from a trend.

There are plenty of plausible explanations. A move by investors to hedge against problems in the financial system may have had much to do with it. So could the summer’s concern about an imminent attack on Iran.

The correction came just as the world had been gripped by an inflation scare, when once the fear was that the credit squeeze would lead to deflation. Traders began to assume central banks would raise rates several times this year, in spite of the stress for the financial system.

Those expectations shot down with the commodity correction. One-year “break-even” rates on US inflation-linked bonds have fallen from 4.25 to 1.77 per cent in the space of a month.

So the short run impact of the commodity correction is clear. It means victory for deflationists over inflationists, and it means a respite for equities.

The longer run is less clear. Even after the correction, the longer-running trend in energy prices is menacingly upwards.

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Fed lays on extra liquidity support

By Krishna Guha in Washington

Published: July 30 2008 15:19 | Last updated: July 30 2008 21:34

The Federal Reserve ramped up its liquidity support operations again on Wednesday in an effort to reduce money market strains and pre-empt the possibility of funding crises at the year-end or at other stress points.

The US central bank said it would offer three-month cash loans to banks and create a new options auction facility. It also said it would give investment banks and other primary dealers extended access to emergency cash and loans of Treasury securities until January 30.

The Fed said it was extending its support to primary dealers “in light of continued fragile circumstances in financial markets”.

Funding needs

On August 10 2007 – the day after the credit crisis broke – the Federal Reserve said that banks might “experience unusual funding needs because of dislocations in money and credit markets”, writes James Politi. It promised to “provide reserves as necessary” to maintain its desired overnight interest rate and reminded banks they could use the “discount window” to access emergency cash.

The Fed has had to improvise to support market functioning – becoming more like the European Central Bank, which started the crisis with a wider range of liquidity tools. In the process the Fed extended its reach beyond commercial banks to investment banks.

The options facility is similar to the strategy used by the Fed in 1999 to deal with the risk of a millennium Y2K liquidity crisis. The Fed will auction $50bn of options giving dealers the right but not the obligation to swap illiquid securities for Treasuries over periods of likely funding stress, such as the year-end.

The European Central Bank and the Swiss National Bank will also offer three-month dollar loans through an offshore facility set up with the Fed. The Fed will increase the amount of dollars it provides to the ECB in exchange for euros by $5bn to $50bn.

Goldman Sachs said the moves “should help to . . . alleviate market stresses, but are incremental rather than transformational”.

Its initiatives follow the recent turmoil in financial sector stocks, which has created a risk that the credit squeeze in the real economy could intensify in the coming months.

The US central bank does not believe it can solve what are in many cases capital problems by providing extra liquidity. But it does believe it can support the adjustment process by reducing the risk of a liquidity run on any individual institution or any forced firesales of illiquid assets.

The Fed’s acknowledgement of the continuing stress in financial markets makes it improbable that it will raise interest rates soon. However, in the longer term, Fed policymakers believe that liquidity tools and rates could in principle diverge.

The decision to offer $75bn in three-month loans (replacing $75bn of one-month loans) marks an important concession by the Fed, which had resisted pressure from banks to extend the term from the previous single month.

The creation of the options facility, meanwhile, is intended to pre-empt stress “in advance of periods that are typically characterised by elevated stress in financial markets, such as quarter ends” and the year-end.

The S&P 500 index rose 1.7 per cent to close at 1,284.27. The Dow Jones Industrial Average was up 1.6 per cent at 11,583.93. The S&P financials index was up 2 per cent but the homebuilders sector finished in negative territory, down 1.7 per cent.

The yield on the two-year Treasury closed flat at 2.621 and the 10-year yield was up 1bp at 4.048.

Additional reporting by Anuj Gangahar in New York

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China to extend Africa acquisitions

By Tom Burgis in Lubumbashi

Published: July 30 2008 19:17 | Last updated: July 30 2008 19:17

China is readying to move into Africa on a scale that far outstrips its acquisitions on the continent to date, according to the South African bank that is laying the groundwork.

High-level groups of bankers from Industrial and Commercial Bank of China and Standard Bank, respectively China and Africa’s biggest banks, are examining potential targets in Africa’s oil and gas, telecoms, base metals and power sectors, executives at the Johannesburg-based lender have told the Financial Times.

Clive Tasker, chief executive of Standard Bank’s business in Africa excluding South Africa, said the resultant deals were likely to be at least as large as ICBC’s $5.5bn (£2.7bn, €3.5bn) purchase last year of a 20 per cent stake in Standard – itself the largest foreign direct investment in post-apartheid South Africa.

But Standard bankers admitted that building a relationship with their Chinese colleagues is proving more difficult than they had anticipated. Billed as a “combination of giants” by ICBC chairman Jiang Jianqing, the union was finalised on February 14, months after the initial overtures.

Beijing expects trade with Africa to hit $100bn by 2010, which makes the rationale for ICBC to gain access to Africa’s biggest pan-African banking network clear.

For Standard, apart from the capital injection to bolster its reserves, reward shareholders and fund expansion, the most tempting fruits of the deal depend on using the connection with ICBC to open doors to Chinese investors and guiding them into Africa.

“The honeymoon is over,” said Tim Thackwray, Standard Bank’s head of investment banking for Africa. “Now the hard work starts.”

Beyond the tribulations of marrying Chinese and South African corporate cultures, negotiating the upper echelons of ICBC – including establishing links with their counterparts – is taking time, Standard executives said. ICBC is majority-owned by the communist-run state.

All the same, Mr Thackwray added: “I would be disappointed if I couldn’t point to a big juicy deal by Christmas.”

Standard is establishing a 20-strong team in Beijing.

Standard and ICBC “can build a superhighway that connects China and Africa,” said David Munro, Standard’s chief executive for corporate and investment banking across Africa.

The first child of the banks’ “strategic partnership” is a global resources fund they are finalising and which they hope will grow to $1bn once third-party investors come on board.

Standard has 1,000 branches in 18 sub-Saharan African countries and a presence in a further 21 nations worldwide. In the past year it has made acquisitions in Nigeria, Kenya, Turkey and Argentina. This week it expanded its operation in the Democratic Republic of Congo, where Beijing last year signed an infrastructure-for-commodities deal worth up to $8bn.

It expects to finalise a licence next month to operate in Angola, one of the world’s fastest growing economies whose burgeoning oil wealth has already attracted significant Chinese interest.

Nigeria, the most populous country in Africa, and Ghana, a bastion of political stability, were also ripe for Chinese deals, Mr Thackwray said, with Mozambique and Congo close behind as they emerge from conflict.

Several executives said that corporate China was looking at targets beyond the mining sector, which has dominated the Asian giant’s African investments as it seeks to satiate its thirst for commodities.

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Italy’s Enel opens new coal-fired power plant

By Guy Dinmore

Published: July 31 2008 05:56 | Last updated: July 31 2008 05:56

Enel, Italy’s power utility, on Wednesday inaugurated the world’s least polluting coal-fired power station as part of the centre-right government’s energy strategy which is aimed at reducing reliance on more expensive and “politically unreliable” oil and gas producers.

The 1,980 megawatt Torrevaldaliga Nord plant, north of Rome, also emits less greenhouse gas than other coal-fired stations, as well as the oil-fired plant it is converted from. However environmentalists argue that Italy’s shift towards coal will result in higher CO2 emissions than if it built more gas-fired stations.

Claudio Scajola, economic development minister who attended the ceremonial opening of the first of the plant’s three units, said Italy had the highest rate of oil and gas dependency in the industrialized world, costing its consumers 30 per cent more in electricity bills than the average European.

Italy’s objective, he said, was to source 50 per cent of its electricity needs from oil, gas and coal, 25 per cent from renewable energy and 25 per cent from nuclear. Italy abandoned nuclear energy following a 1987 referendum, but the centre-right government, elected in April, has pledged to bring it back.

Italy needed to reduce its energy reliance on “politically more unstable countries”, said Enel. Coal for the new plant will be supplied by Indonesia and South Africa.

Although the €2bn power station was plagued by delays that have long characterized Italy’s infrastructure development, managers and engineers spoke of their pride – and relief – at finishing what they call the world’s “cleanest” and most efficient coal-fired station.

Enel is planning a second 2,000 MW conversion from oil to coal at Porto Tolle outside Venice. Andrea Lavarino, chairman of Assocarboni, an association of coal operators, said Italy had six or seven oil-fired plants that could be converted to coal.

“We are trying to persuade the government to give us fast-track procedure,” he told the FT. “What they say is encouraging. They speak the right language.”

Gianfilippo Mancini, Enel’s head of energy generation, said the new plant will emit 0.7 tonne of CO2 per megawatt hour, slightly less than the old oil-fired plant. This compares with 1.0 tonne produced by a “normal” coal station and 0.4 to 0.7 tonne produced by gas-fired stations.

In spite of the cost of buying carbon credits, the cheaper price of coal compared to gas will mean savings for Italian consumers, he said.

Enel is spending €320m by 2012 developing carbon capture and storage, where CO2 from the plant is trapped and then stored underground.

Stefano Ciafani of Legambiente, an environmental lobby group, says the shift to coal will set back Italy even further from meeting its Kyoto targets on emissions by 2012.

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Putin attacked over market fall

By Catherine Belton in Moscow

Published: July 31 2008 03:20 | Last updated: July 31 2008 03:20

An adviser to Dmitry Medvedev, the Russian president, on Wednesday lashed out at Vladimir Putin, the prime minister, for wiping almost $60bn off the Russian stock market when he publicly criticised a New York-listed Russian steel and coal group for price-gouging.

Igor Yurgens, an influential businessman who heads the Institute of Contemporary Development, a think-tank advising the president, said: “It is not correct to destroy your own stock market ... and wipe off $60bn (€38bn, £30bn). It’s just not the right thing.”

“There are 150 ways of deciding problems with Zyuzin without resorting to such comments,” he added, referring to Igor Zyuzin, the billionaire owner of Mechel.

Mr Zyuzin’s personal worth was halved from $11bn to $5.5bn after Mr Putin singled him out at an industry conference last Thursday to accuse him of price gouging. Mr Putin threatened to send a doctor to “clear up” the illness Mr Zyuzin had claimed prevented him from attending the meeting.

Analysts have been watching for signs of a divide between the Putin and Medvedev camps. Questions have remained over who is in charge after Mr Putin stepped down as president and handed power to Mr Medvedev in May.

Mr Medvedev this week sought to staunch the market’s fall as investors fled following Mr Putin’s comments, fearing a return of an attack such as that which led to the state dismantling of oil group Yukos .

One of his senior economic aides, Arkady Dvorkovich, on Monday called for calm, saying the outburst was only connected to a probe by the Federal Anti Monopoly Service into price-gouging for coking coal, a major input for steel. Just hours later, however, Mr Putin accused Mechel of tax evasion too.

Vremya Novostei, the Russian daily, on Wednesday said Mr Putin’s comments looked like the start of a power struggle and an attempt to “equate in the consciousness of the population the beginning of Medvedev’s rule with high inflation and stock market collapse.”

But Stanislav Belkovsky, a political analyst, said Mr Putin’s comments did not signal a rift. “Medvedev does not interfere in things that don’t concern him. This is a business conflict.”

Mr Yurgens, who is also first vice president at Renaissance Capital, the Moscow investment bank, said Mr Medvedev faced a “silent war” against hardliners opposing his bid to clean up the legal system and root out corruption.

Russia’s Federal Anti-Monopoly Service said it was extending its probe into price-fixing in the market for coking coal to Evraz Group and Raspadskaya.

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Eurozone economy suffers fall in confidence

By Gerrit Wiesmann in Frankfurt

Published: July 31 2008 01:56 | Last updated: July 31 2008 01:56

The confidence of eurozone businesses and consumers in the economy fell sharply in July, a further omen that the 15-member currency bloc is sliding towards stagnation as high energy prices and financial-market woes jar the global economy.

New evidence of a sharp slowdown came as some national inflation figures suggested prices in the region rose at record levels in July, leaving the European Central Bank little room for growth-boosting rate cuts any time soon.

The eurozone sentiment indicator for July was “the latest in a string of very weak data”, according to Aurelio Maccario, an economist at Unicredit in Milan. “The eurozone economy is heading toward a stagnation phase bound to last at best a few months.”

The European Commission said its sentiment index slipped 5.3 to 89.5 points, the lowest level seen since March 2003 and well below an average forecast of 93 points by economists. The mood in the services sector, which makes up the bulk of economic activity, suffered most.

This trend fell into line with Friday’s revelations that economic activity by the eurozone private sector had slowed for the second month running in July and that German business confidence – as measured by the Ifo index – had fallen to a three-year low.

The eurozone economy grew 0.7 per cent in the first three months of this year, a sign that, unlike the US, the euro-region was avoiding some of the biggest economic ripples from financial-market turmoil that erupted just more than a year ago. But high energy prices and their effect on global growth now seem to be leaving their marks on the currency zone. Some economists are even projecting a contraction in second-quarter growth numbers, due to be published mid-August.

Markedly weaker growth prospects have reduced fears among economists that the ECB could be tempted again to tighten monetary policy after raising its key interest rate by a quarter of a point to 4.25 per cent at the start of this month. Slower growth, tight credit and the inflation-easing effects of a strong euro could ease inflationary pressures over the coming months, said Howard Archer, economist at Global Insight in London. “We expect the ECB to keep interest rates at 4.25 per cent through the rest of 2008.”

But many ECB-watchers agree this scenario is no certainty. Preliminary inflation data from Germany, the eurozone’s largest economy, and Belgium suggest price rises in the whole region hit 4.1 per cent in July, up from a record 4 per cent in June. That would mean eurozone inflation in July was running at more than twice the ECB’s target of “below but close to” 2 per cent .

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Cadbury 'scared' by global economy

By Jenny Wiggins and Lucy Killgren

Published: July 31 2008 03:00 | Last updated: July 31 2008 03:00

Cadbury's chief executive said the outlook for the global economy was "scary" and that the confectionery company might reshape its board and sell its Australian drinks brand to meet profit targets.

Todd Stitzer, who had previously played down speculation that the Australian business would be sold, said the decision came as Cadbury "looks more carefully" at its portfolio.

News of fresh restructuring follows the start of a cost-cutting programme last year to improve profit margins and comes after the appointment of Roger Carr as chairman this month.

Mr Carr yesterday appeared on Cadbury's website saying the company needed to take a more "determined" approach to business.

"The world has changed quite remarkably even in the last six months," Mr Carr said. "All of the management team have to look hard again at all aspects of the business."

Changes are likely to include reducing the 10- member board and recruiting people with more financial experience.

The company will also begin a review of the Australian business, which has annual sales of about £300m - some 6 per cent of group sales.

Analysts welcomed the changes, with Rob Mann at Collins Stewart noting they reflected "a change in tone".

In the six months to June 30 Cadbury reported a 28 per cent rise in pre-tax profits to £143m (£112m) on revenues that rose from £2.33bn to £2.65bn, helped by the strength of the euro and the Australian dollar against sterling. Earnings per share were 11.9p (8.7p).

The company added that it was on track to improve profit margins by about 120 basis points over the full year, in line with analysts' expectations.

Ken Hanna, chief financial officer, said soaring commodity costs - which have seen prices for cocoa, milk and sugar all rise by more than 25 per cent - had been "a stronger challenge" than the company had expected a year ago. But Cadbury had been raising prices, cutting back on promotions and reducing packaging sizes.

Cocoa prices are up 37 per cent on last year, milk prices are up 26 per cent and sugar has risen 29 per cent.

Cadbury added that it saw no signs that sales were slowing in emerging markets, which now account for about one-third of total revenues.

Shares in Cadbury fell 5½p to close at 620p yesterday.

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HBOS profits drop 51 percent
Reuters
Reuters - 15 minutes ago

LONDON (Reuters) - Home lender HBOS said first-half profits fell 51 percent from a year ago as it took a 1.1 billion pound hit from negative adjustments on securities impacted by the credit crunch.

HBOS reported an underlying pretax profit including the negative adjustments for the six months to the end of June of 1.45 billion pounds, down from 2.96 billion a year before.

HBOS, which raised 4 billion pounds from a rights issue earlier this month to rebuild its capital, said it would consider "selective asset disposals to improve out deposit to loan ratio," but did not provide further details.

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現金給与、６カ月ぶり減　ボーナス減少響く　毎月勤労統計

　厚生労働省が31日発表した6月の毎月勤労統計調査（速報、従業員5人以上）によると、すべての給与を合わせた現金給与総額は46万3013円で前年同月比0.6％減少した。6月は多くの企業が夏のボーナスを支給するが、ボーナスを示す「特別給与」が同1.5％減少したことが影響し、6カ月ぶりにマイナスに転じた。

　基本給を示す所定内給与は25万1177円で前年同月比横ばい。所定外労働時間は同1.8％減の10.5時間。景気の影響を受けやすいとされる製造業の所定外労働時間は同3.7％減だった。

　雇用者数は前年同月比1.5％増の4513万1000人。うち正社員などの一般労働者は1.6％増、パートは1.2％増で、2カ月ぶりに一般労働者の伸びがパートの伸びを上回った。

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政府系金融に民間手法、10月統合へ組織改革着手　まず中小公庫

　政府系4金融機関が統合する「日本政策金融公庫」の10月発足をにらみ、中小企業金融公庫は8月に現場に権限を大きく委譲する組織改革をする。新公庫トップに内定している安居祥策総裁（元帝人会長）が民間流の経営改革を足元の中小公庫で先行させる形。今後、新公庫の人事配置や体制づくりの議論が本格化するが、安居氏は中小公庫の新体制をモデルに新公庫を運営する考えだ。

　政府は2007年9月、日本政策金融の初代トップに安居氏を充てる人事を決めた。安居氏は帝人の経営改革を推し進めた手腕を買われ、07年1月に中小公庫総裁に就任。日本政策金融の組織づくりを意識しながら、中小公庫の業務全般の見直しを進めている。

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主要証券5社、市場混乱直撃　4―6月、2社が最終赤字

　主要証券5社の2008年4―6月期連結決算は、金融市場の混乱で法人部門を中心に業績が悪化した。野村ホールディングスと三菱ＵＦＪ証券の2社が最終赤字になったほか、3社も前年同期比で4割以上の減益になった。米国の信用力の低い個人向け住宅融資（サブプライムローン）問題に端を発した市場の混乱長期化が、主要証券の決算を直撃している。

　大和証券グループ本社が30日に発表した最終利益は58億円と前年同期比で78％減少した。法人取引を担う傘下の大和証券ＳＭＢＣの最終損益が112億円の赤字（前年同期は151億円の黒字）となったことが響いた。投信の販売や株式売買委託手数料も落ち込んだ。

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公的統計、元データを一般提供　09年度から、経済分析に活用

　政府は2009年度から、公的統計の集計を目的に国民や企業に回答してもらったアンケートの「元データ」を一般に提供する方針だ。分析した結果を一般に公開する研究者などを対象に、回答者の名前などを分からなくしたうえでデータを渡す。公的統計を「国民の資産」と位置づけ、民間による詳細な経済分析に役立てる。

　09年春に全面施行となる新しい統計法では、政府が統計をまとめるために集めたデータを一般に提供できると規定されている。政府は09年度に提供を始める準備を進めており、今秋にも提供にあたってのルールを定めた指針をまとめる。

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日立の4―6月期、連結営業益３倍　情報通信システムの採算改善

　日立製作所が31日発表した2008年４―６月期の連結決算（米国会計基準）は、営業利益が前年同期比3.2倍の776億円だった。ハードディスク駆動装置（ＨＤＤ）の黒字化などで情報通信システム部門の採算が改善した。子会社の日立建機や国内向け原子力発電設備が好調で、電力・産業システム部門も伸びた。子会社の日立金属や日立化成工業がけん引した高機能材料部門も大幅増益を確保した。

　売上高は３％増の２兆5434億円だった。地域別では北米が落ち込んだものの、国内やアジア、欧州の伸びが補った。

　有価証券の評価損を計上し、営業外費用が膨らんだが、最終損益は315億円の黒字（前年同期は136億円の赤字）を確保した。

　2009年３月期の業績は従来予想を据え置いた。

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帝人、今期一転減益に　43％増を下方修正　原燃料高で

　帝人は31日、2009年3月期通期の連結利益予想を下方修正すると発表した。純利益の予想を前期比5％減の120億円とした。従来予想は43％増の180億円だった。原燃料高が利益を圧迫する。

　原油高による調達費用の前期比増加額は、従来予想より260億円多い550億円とした。一部製品は市況が軟調で値上げが難しい情勢であることも利益の押し下げ要因。高野直人専務は同日の決算発表の席上、「不採算品を切り捨てる局面が加速するかもしれない」と話した。

　同時に発表した08年4―6月期連結決算は、純利益が前年同期比69％減の27億円となった。売上高は5％減の2366億円。原燃料価格の高騰を受け、ポリエステル繊維やフィルム、樹脂などの製品価格に転嫁しきれず、利益を大幅に減らした。

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４－６月の荷動き指数、景気減速で02年来低水準　日通総研

　日通総合研究所（東京・港）がまとめた企業物流短期動向調査によると、国内の物流の活発さを表す「荷動き指数」（「増加」と回答した割合から「減少」を引いた値）は、4―6月（実績見込み）が1―3月比13ポイント低下のマイナス18となり、2四半期連続で前期に比べて下落した。指数としてはマイナス 22だった2002年4―6月以来の低い水準。景気減速を受けて幅広い業種の荷動きが鈍った。

　売上高に対する物流コストの割合を聞いた指数（「上昇」と回答した割合から「減少」を引いた値）は、4―6月（実績見込み）が前期比10ポイント上昇してプラス26。2002年1―3月に現行の調査方式になって以降、最高となった。

　調査は6月中旬に郵送方式で実施。製造業や卸売業の主要2500事業所が対象で、回答率は43.2％だった。

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中小物流などへの緊急補助を提言　経団連、燃料高で

　日本経団連は30日、資源価格の高騰などで経済停滞の可能性が高まっているとして、中小物流や農林水産業者に対する燃料費高騰への補助などを盛り込んだ緊急提言を発表した。財政再建を訴えてきた経団連だが、今回は事実上のバラマキ容認。経団連では「国民の間に閉塞（へいそく）感が漂っており、早急に打開する必要がある」としている。

　31日中に福田康夫首相など政府関係者に提出する。提言では燃料費補てんのための緊急補助金のほか、高速道路料金の引き下げ、資源価格高騰の一因とされる投機の抑制が必要と指摘。そのうえで「消費税の引き上げを含む、税・財政・社会保障制度の一体改革の断行が不可欠」とした。

　そのほか電子行政の構築、子育て世代向けの所得減税、住宅取得の際にかかる税金の軽減なども成長戦略として求めた。原子力の活用や農業経営のための基盤強化も提言。各施策について「政治の強いリーダーシップによる早急な実施を求める」と訴えている。

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シベリア鉄道整備を支援　政府方針、物流コストを削減

　政府はロシア政府と協力し、シベリア鉄道の近代化を柱とする物流網整備に乗り出す。約9300キロに及ぶ路線について日本の政府系金融機関の融資と貿易保険を活用。鉄道の高速化や新しい車両、輸送システムの導入を後押しする。通関手続きの迅速化も支援し、企業の物流にかかる時間とコストを減らす。沿線には経済特区や資源開発地域が多数あり、資源関連や自動車、ハイテク、流通など幅広い日本企業の進出を側面支援する。

　日ロ両政府が進める構想は「ユーラシア産業投資ブリッジ」と呼び、ロシア極東地域とモスクワを結ぶ鉄道の近代化を中心に、沿線地域の資源エネルギー開発、産業育成で協力する。ロシア政府は2030年までにシベリア鉄道を近代化する計画を昨年策定。総事業費は約69兆円で、海外の民間資金も活用する。

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すかいらーく、再建巡り対立　銀行団の意向焦点

　外食大手のすかいらーくを巡り、横川竟（きわむ）社長と大株主である投資会社の対立が表面化した。野村グループなど投資会社2社は横川社長の退任とともに、財務健全化に向けた増資策を計画。対する横川社長はサントリーの協力を仰ぐ独自増資策で対抗する。

　すかいらーく生え抜きの谷真常務執行役員を社長に充て、新たな資本増強を急ぐ――。これが横川氏退任を求めた野村プリンシパル・ファイナンスの戦略だ。

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ＴＤＫ、欧州電子部品最大手を買収　最大2000億円

　電子部品大手のＴＤＫは欧州の電子部品最大手、独エプコスを買収する。買収金額は1500億―2000億円になる見込みで、電子部品業界のＭ＆Ａ（合併・買収）としては過去最大規模。家電など民生機器中心の事業領域を買収によって産業機器に広げ、国際競争力を強化する。ＴＤＫをはじめとする日本勢は電子部品市場をリードしているが、アジア勢の追い上げや過当競争による収益性の低下に直面している。ＴＤＫの大型買収が世界的な業界再編の呼び水になる可能性もある。

　31日にも発表する。近く独フランクフルト市場に上場するエプコス株のＴＯＢ（株式公開買い付け）を開始。友好的に株式の過半数を取得し、早ければ今秋にも子会社化する。買収後は両社の部品事業を一体運営し、相乗効果を高める。

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鉄鋼5社、低品位石炭価格3.6倍に　スイス資源大手と合意

　新日本製鉄など日本の鉄鋼大手5社は低品位の鉄鋼原料用石炭（原料炭）について、最大手のスイスの資源会社エクストラータと価格を従来の約3.6倍にすることで大筋合意した。日本の製鉄会社は原料炭のうち3割は低品位石炭を使っており、業界全体で新たに1000億円程度の負担増となる。今年度の鉄鋼原料の価格交渉がすべて決着したことになり、今後、電機や造船などの需要家に鋼材の追加値上げを要請する。

　指標となるエクストラータが保有する豪州南東部ニューサウスウェールズ州産の「非微粘結炭」と呼ばれる低品位石炭の2008年度の契約価格を合意した。07年度の3.6倍にあたる1トン240ドル前後に引き上げる。

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道内炭、採掘拡大へ　北菱は２割増産目指す

　道内の石炭採掘業者が相次ぎ、新鉱区の開発や採掘量の引き上げに乗り出す。原油高に伴う海外炭の高騰で国内炭の競争力が向上しているのが背景。三菱マテリアル子会社の北菱産業埠頭（札幌市）は採掘量の2割増を目指す。三井鉱山系の北海道三鉱石油（美唄市）などは新鉱区を申請。石炭生産の拡大が雇用の増加など地域経済にも波及する可能性がある。

　国内の石炭採掘業者は道内だけで、露天掘りが北菱産業埠頭、北海道三鉱石油、砂子組（空知管内奈井江町）など7社、坑内掘りは釧路コールマイン（釧路市）1社の計8社ある。生産量は1999年度に271万トン強だったが、近年は120万―130万トン程度で推移している。

　北菱産業埠頭は09年度以降の年間採掘量を今年度計画の10万トンから2割程度増やし、12万トンに引き上げたい考え。今年度は主要顧客である北海道電力や製紙会社の道内分に加え、親会社の三菱マテリアルの要請を受け、道外にも2万トンを出荷する。

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東レなど炭素繊維一斉値上げ　10―30％

　東レと三菱レイヨンは炭素繊維を10―30％値上げする。原油高に伴う原料アクリロニトリルや燃料費高騰分を転嫁する。2社がすべての顧客に対して一斉に値上げするのは初めて。軽くて丈夫な炭素繊維は燃料消費を軽減する環境配慮型の素材として需要が増えており、値上げは早期に浸透しそうだ。ただ価格上昇が今後も続けば、自動車など消費財向けの用途開発のスケジュールに影響する可能性もある。

　東レは9月出荷分から10―20％、三菱レイヨンは8月出荷分から20―30％引き上げる。主力品の現在の価格は1キロ4000円前後で、値上げがすべて受け入れられれば400―1200円上昇する。

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上期の自動車輸出、22年ぶり最高に　12.7％増、新興国向け好調

　日本自動車工業会（自工会）が30日発表した2008年上半期（1―6月）の自動車輸出実績は前年同期比12.7％増の350万5805台だった。新興国を中心に燃費性能に優れる日本車の需要が高まっており、上半期としては22年ぶりに過去最高を更新した。好調な輸出を受け、上半期の国内生産実績も6％増の605万7044台となった。

　地域別の輸出実績ではアジアが4割強増えた。中近東やオセアニア向けの輸出が過去最高となった。市場が低迷する北米向けも日本メーカーの小型車に需要が集まっており、6.5％増えた。ただ、小型車需要の急速な伸びにメーカーの生産能力が追いついておらず、下半期の輸出の伸び率は落ちる公算が大きい。

　同日発表した2007年度（07年4月―08年3月）の日本の自動車メーカーの海外生産実績は前の年度に比べ8.3％増の1208万3832台だった。アジアや欧州での生産が拡大し、3年連続で1000万台を超えた。08年度は北米で大型車の減産が相次ぐ。

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フグ産地偽装のエツヒロ、31日付で廃業　従業員は全員解雇

　フグの産地を偽装した山口県下関市の水産物加工卸売会社「エツヒロ」の森敏一社長は同社を31日付で廃業し、約60人の従業員全員を解雇すると発表した。産地偽装で取引先からの入金が止まり、資金繰りに行き詰まったのが直接の原因で、近いうちに破産などの法的手続きを取る。従業員の今月分の給与は未払いで、国の制度融資などを利用して補償するという。

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丸明、自粛指導破り肉提供　飛騨牛偽装

　岐阜県養老町の食肉卸販売業「丸明」の飛騨牛偽装表示事件で、県から29日に営業自粛の指導を受けた同社が、翌30日に取引先に食肉を渡していたことがわかった。県は指導に反した疑いがあるとみて、31日に同社の責任者を呼び事情を聴く。

　県によると、丸明の養老店が取引先の3つの焼き肉業者に牛肉や馬肉を合わせて約140キロ提供していた。2つの業者には店の裏口で直接渡し、1業者には配達した。

　県は29日、同社に対し、社内の運営体制を見直し、その履行状況が確認できるまでの間の営業自粛を求めたばかり。食肉を店の外に持ち出すことも認めていない。

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工作機械を不正輸出　広島のメーカーを捜索、核開発転用の恐れ

　広島県福山市の工作機械メーカー、ホーコス（菅田雅夫社長）が核兵器の開発・製造に使用される恐れのある工作機械を韓国に無許可で輸出した疑いが強まり、警視庁公安部などは31日、外為法違反（無許可輸出）の疑いで同社本社などを家宅捜索した。

　公安部は工作機械が韓国から中近東や北朝鮮などの第三国に転売された可能性もあるとみて捜査している。

　無許可輸出された疑いがある工作機械はマシニングセンター（ＭＣ）で商品名は「ＮＳ７０」。ＭＣは数種類の工具を自動的に切り替え、切削や穴開けなどの金属部品加工作業を1台で行う。警視庁によると、ウラン濃縮に使う遠心分離機の部品を加工する際に使用される可能性があるという。

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竹島帰属表記、再び韓国に…「主権未指定」から再変更

　ブッシュ米大統領は３０日、米政府機関「地名委員会」が先週、竹島（韓国名・独島）の帰属地説明を「主権未指定」に変更したことについてライス国務長官に見直しを指示、同説明は「元に戻される」と述べた。地名委の地名検索サイトは同日、同説明を「韓国・公海」に戻した。北京五輪に合わせた８月４日からの韓国、タイ、中国歴訪を前に訪問国のメディアと会見した。

　この問題では、説明変更を受けて韓国側の批判の矛先が米国に向けられ、８月６日に予定される米韓首脳会談への悪影響が懸念される事態となっていた。米側は「政策変更を反映した変更ではない」（ガイエゴス国務省報道部長）と強調していたが、首脳会談を前に軌道修正した形だ。米国のあっけない方針変更に日本側からの反発も予想される。

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年金問題：給与水準改ざん、さらに１５７人分

　厚生年金の保険料や受給額の算定基準になる標準報酬月額（給与水準）の改ざん問題で、総務省年金記録確認第三者委員会が改ざんの事実を認めた１６件中１１件で、申立人の同僚計１５７人の記録が同様に改ざんされていたことが分かった。舛添要一厚生労働相の特別チーム室が確認した。特別チーム室は、各地の社会保険事務所の関与を示唆しており、舛添厚労相は解明を進める方針。

　特別チーム室によると、調査対象は１６件のほか都内の会社社長が社保事務所職員による改ざんを証言したケース。１６件は７５～００年に東京、兵庫などで改ざんがあったと認められたケースだが、申立人と同じ事業所で同時期に勤務していた１１社計１５７人について、標準報酬月額が過去にさかのぼって低くされたり、加入期間を短くされるなどの不自然な訂正があった。特別チーム室は、社保事務所が事実と異なる届け出を事業主に促した場合も考えられるとしている。

　各社保事務所間には保険料の徴収率を巡る競争があり、少しでも率を上げるため、保険料を負担できない事業所と示し合わせ、書類上の給与水準を下げるなどの不正を行っていたとされる。

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外務省職員：宿泊代払わず、セミスイートに２９３泊１５３８万円

　外務省経済局の男性職員（４０）が昨年４月までの約１０カ月間、東京都内のホテルのセミスイートルームに宿泊し、約１５００万円の宿泊代金を支払っていないことがわかった。

　関係者の話によると、この職員はこのホテルの経営者の以前からの知人で、個人的な事情で自宅を出た後、０６年６月から０７年４月まで計２９３泊にわたってホテルに宿泊した。１泊の料金は５万２５００円で合計で約１５３８万円になったが、職員が代金を支払わないためホテル側が今年７月に職員に請求した。職員はホテル側に謝罪し、２９日に外務省に事態を報告した。

　職員はホテル側に「金額が大きいのですぐには払えないが、代金は支払う」と説明しているという。ホテルの支配人は「社長の知人なので支払いを待った。代金を払っていただければ問題はない」と話している。

　外務省は職員がホテル側に便宜を図っていなかったかなどを含めて事情を聴いている。外務省人事課は「個人的な話なので当事者間で解決するよう指導している。事情聴取の結果によって、必要と判断すれば処分することも検討する」としている。

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日銀：金融政策決定会合の議事録を初公開

　日銀は３１日、金融政策決定会合の議事録を初公開した。会合が初めて開催された９８年１月から６月までの１０回分。日本長期信用銀行（現新生銀行）の経営不安が広がった直後の６月２５日に開かれた会合では、当時の速水優総裁が「かなり危機的な状況」と名指しを避けながらも、長銀の経営破綻に強い懸念を示していたことが明らかになった。

　巨額の不良債権を抱えた長銀は６月上旬に経営不安が広がって株価が急落した。速水総裁は同月２５日の会合で「特定の銀行から資金の引き出しが起こり、ここしばらく安定していた株価は急落し、かなり危機的な状況になってきている」と発言。「民間で話し合いができていくのが望ましいと思っている」と長銀対象の提携交渉に期待感を示した。

　長銀は同月２７日に住友信託銀行と合併交渉に入ると発表。だが、９８年秋には経営破たんして一時国有化された。

　また、不良債権問題への対応で、速水総裁と中原伸之審議委員（当時、元東燃社長）の間で意見の対立があったことが分かった。

　速水総裁は「不良債権処理が済んでいないため日本経済全体への非常な不安感が横行している」と指摘。「（金融機関の不良債権処理は）護送船団方式で他を見ながらやっていく慣習が残っているので、銀行が自分たちの判断で（不良債権の）ディスクローズ（開示）をやり、具体的な対応をしていくべき」と主張し、金融機関に融資の回収可能性を分類する自己査定の公表を促す考えを示した。

　これに対し、中原審議委員は、大手行の破たん処理方法が決まっていないとして、「日銀が市場メカニズム（での不良債権処理）という言葉を出すのは非常に危険だ。破たんしてもいいと考えてると受け取られる」と反論した。

　最終的に速水総裁は会合後の１６日、金融機関に自己査定の自主公表を求める異例の談話を発表した。【斉藤望、清水憲司】

　【ことば】金融政策決定会合

　日銀の最高意思決定機関である政策委員会が、政策金利の変更などを議論するため、月１～２回開く会合。日銀の独立性と透明性の向上を目指した改正日銀法が９８年４月に施行され、その趣旨を先取りして、同年１月から開催された。改正法施行と合わせてメンバーは、総裁、副総裁２人、審議委員６人（民間から選出）の計９人となった（現在は副総裁１人と審議委員１人が欠員）。改正法は議事録公開を義務付けており、日銀は議事要旨は１カ月後、議事録は会合から１０年後に公開すると内規で定めている。

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消費税：７％なら、成長率０．６％減に－－内閣府試算

　内閣府は、消費税率を現行（５％）から２％引き上げて７％にした場合、初年度の国内総生産（ＧＤＰ）の実質成長率は０・６％押し下げられ、消費者物価は１・６３％押し上げられるとの試算をまとめた。日本経済が景気後退懸念と物価高の同時進行リスクにさらされる中、今回の試算は今後本格化する税制改正論議に影響を与えそうだ。

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気象衛星：「ひまわり」後継　予算確保に気象庁難航

　６～８年後に打ち上げが予定されている静止気象衛星「ひまわり」の後継機について、気象庁が整備費の予算確保に苦しんでいる。予備機を合わせた２機で約８００億円の整備・運用費が必要だが、現行の６、７号で半分以上を負担した国土交通省が今回は計画から外れ、民間の気象関連企業も費用の一部負担を拒否したためだ。３１年も続く宇宙からの気象観測に空白ができてしまう恐れも懸念されている。

　気象庁によると、ひまわりは故障に備えて２機体制で、６、７号は１５年に寿命を迎える。衛星の製造には５年かかり、来年度に着手しなければならないため、整備費を来年度予算に盛り込み、今後８年間で毎年１００億円近い予算を確保する必要がある。６、７号では、航空管制用の通信機を搭載することで旧運輸省航空局が予算の７割を負担したが、今回は「航空管制システムについて各国と議論中」として航空管制機能の相乗りをやめた。

　気象庁の年間予算は人件費も含め約５８０億円。「人件費以外はほとんどがアメダスや地震計などの更新整備・維持費に充てられ、予算を捻出（ねんしゅつ）する余力はない」（同庁気象衛星課）のが現状だ。観測データを有料化し、民間の気象予報会社や衛星画像販売会社に費用の一部を負担してもらうよう計画したが、猛反発され断念した。

　後継機がなくなると、台風の規模や進路のほか、低気圧や前線の動きも把握が困難になる。観測データはアジア各国などに送っているため、アジア・太平洋地域の約３０カ国の防災にも支障を来たす恐れがある。

　気象衛星課の横田寛伸課長補佐は「専門家の間でも『国民の視点から見れば税金の使い方として気象衛星は第一優先』との意見は共通している。コスト低減のため民間に衛星の運用を任せることも考えていく」と話している。

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日インドネシアＥＰＡ：看護師・介護士来日　予定の４割、２０８人

　インドネシアとの経済連携協定（ＥＰＡ）に基づき受け入れる今年度のインドネシア人看護師・介護福祉士候補は３０日、看護師、介護福祉士とも１０４人ずつの計２０８人で確定した。希望者は看護師が１７６人、介護福祉士が１３７人の計３１３人いたが、来日数は１００人以上下回り、当初の受け入れ予定数（看護師２００、介護福祉士３００の計５００人）の約４割にとどまった。厚生労働省の外郭団体「国際厚生事業団」によると、男女の内訳は、看護師が女性７５人、男性２９人、介護福祉士が女性５６人、男性４８人。来日数が希望者を下回ったのは、介護福祉士は女性の希望が多く男性で受け入れ先が見つからないケースが相次ぎ、看護師は大きな病院で働いた実績のある人に日本側の希望が集中したためという。

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13:30 GMT, Wednesday, 30 July 2008 14:30 UK
German court rejects smoking bans
Smoker in Munich

Germany's top court has ruled against smoking bans in small bars and clubs.

The Federal Constitutional Court upheld complaints against the bans in the city-state of Berlin and Baden-Wuerttemberg, in south-west Germany.

The two states are among 12 that introduced such bans at the start of the year. The court says they must now review their anti-smoking laws.

Smoking will now be allowed in one-room bars and clubs smaller than 75 sq m (807 sq ft), where no food is served.

The court gave Berlin and Baden-Wuerttemberg until the end of 2009 to draft new anti-smoking legislation.

Presiding judge Hans-Juergen Papier made it clear that German states could introduce blanket smoking bans in all public spaces if they so wished.

The complaint was brought by the owners of two small bars in Tuebingen and Berlin, who argued that the smoking ban was harming their business. They also said that, unlike larger premises, they had no space to create a separate smoking room.

The judge's ruling is seen as setting a legal precedent for Germany because most of the country's states have similar anti-smoking laws.

Bavaria has a total ban on smoking in bars and beer tents. In Saarland, smoking is allowed in small bars and larger ones that provide a separate smoking room.

The other states ban smoking in one-room bars but allow it in establishments that provide a separate smoking room.

Germany has a nationwide ban on smoking in government buildings.

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14:44 GMT, Wednesday, 30 July 2008 15:44 UK
Bodies dumped in Istanbul field
Map of Turkey

Turkish police have launched an investigation following the discovery of 13 bodies in a field on the outskirts of Istanbul.

The dead are thought to have been illegal immigrants who suffocated while being smuggled in a crowded lorry, officials said.

Most were believed to be Pakistani, media reports said.

Turkey is a major trafficking route for illegal immigrants trying to enter the European Union.

Police are looking for the driver, who fled after dropping off the bodies in the Kucukcekmece area, on the European side of Istanbul.

A local man told the Anatolia news agency that the driver dumped the bodies early in the morning, and abandoned about 130 illegal immigrants also in the truck.

Police have arrested about 50 migrants thought to have been on the lorry, 10 of whom were taken to hospital suffering from severe exhaustion and dehydration, the Hurriyet newspaper reported.

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06:55 GMT, Thursday, 31 July 2008 07:55 UK
Deutsche writes down 2.7bn euros
Deutsche Bank office

Deutsche Bank has written down another $3.6bn (£1.8bn) between April and June, taking its bill from the credit crunch to more than $11bn.

Unlike many of its global rivals, Deutsche Bank did still manage to make a profit in the quarter.

Pre-tax profits came in at 642m euros (£506m), well down on the 2.7bn euros it made in the same period last year.

Almost half of the write-downs came from investments in debt backed by residential mortgages.

Exposure to monoline insurers, which insure bonds, as well as poor investments in commercial property, made up much of the rest of the write-downs.

"We remain cautious for the remainder of 2008," said chief executive Josef Ackermann.

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18:34 GMT, Wednesday, 30 July 2008 19:34 UK
Singles 'face Alzheimer's risk'
Couple

Being single when you reach middle age could mean more than having the house to yourself - it could increase your risk of dementia.

Swedish research, presented at a US conference, found that marriage or having a partner halved the risk of developing dementia.

Scientists believe social interaction between couples may ward off illness.

The Alzheimer's Research Trust said the results were worrying, given the high divorce rates in the UK.

"These findings are particularly worrying for the UK - a society with a high divorce rate, marriage at an all-time low, and ageing population"
Rebecca Wood,
Alzheimer's Research Trust

The study by the Karolinska Institute suggested that the problem might be even greater for some people.

Divorcees who remained single, they noticed, had a trebled risk of dementia, while those widowed at a young age who stayed single faced a six times greater chance.

The research looked at 1,449 people from a Finnish database, who were asked about their relationship status in mid-life, then revisited 21 years later to see if they had developed dementia.

In total, 139 of them had some sort of cognitive impairment, and Alzheimer's had been diagnosed in 48 of these.

Even after other factors which might have an impact on dementia were adjusted for, the study consistently showed people with partners as less prone to the illness.

Advice for the single

Dr Krister Hakansson, who led the study, said: "Living in a couple relationship is normally one of the most intense forms of social and intellectual stimulation.

"If social and cognitive challenges can protect against dementia, so should living as a couple.

"Singletons shouldn't worry - there are many other ways to reduce your risk of dementia that don't involve popping the question "
Susanne Sorenson,
Alzheimer's Society

"This study points to the beneficial effects of a married life."

Rebecca Wood, from the Alzheimer's Research Trust, said that more research along these lines was urgently needed.

"These findings are particularly worrying for the UK - a society with a high divorce rate, marriage at an all-time low, and ageing population.

"This is the first study of its kind to examine the link between midlife marital status and dementia, adding to previous research suggesting that social interaction reduces dementia risk."

However, Susanne Sorenson, from the Alzheimer's Society, had some words of cheer for partnerless people.

She said: "Singletons shouldn't worry - there are many other ways to reduce your risk of dementia that don't involve popping the question.

"The best evidence is around eating a Mediterranean diet, exercising regularly and not smoking."

She also said that the findings were consistent with other research showing social interaction could be beneficial.

She added: "Whether it's reaching for the vacuum cleaner or going for long romantic walks, lifestyle factors associated with being married may also help."

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12:55 GMT, Wednesday, 30 July 2008 13:55 UK
Intel and Portugal in school deal
Classmate laptop

Intel has signed the largest ever deal for its child-proof laptop, the Classmate.

500,000 of the specially designed educational machines are being given to six to 10 year olds in Portugal.

Originally intended for the developing world, Intel has shifted its focus in recent months to more mature markets.

It stressed its commitment to supplying the Classmate PC to the developing world and said it had projects underway to use it in 50 countries.

The deal will change the way education works in Portugal, according to Paulo Campos, the Portuguese government's secretary of state assistant for public works.

"It will change the educational system, change the way that students look upon school and how we communicate with parents," he said.

Holistic approach

Broadband access in Portugal is still relatively low. Official figures suggest 15% have fixed broadband access and another 16% have mobile broadband.

There are other projects in the pipeline to increase connectivity and PCs to school children aged 10-16, said Mr Campos.

Intel chairman Craig Barrett was in Portugal to oversee the deal and reiterate the chip makers commitment to educational programmes.

"In any environment there is an issue about hardware but there are also issues about connectivity, software, infrastructure and training teachers so they know how to use it," he told the BBC.

"Our philosophy is holistic and the hardware is just a piece of that. There must be local content to go with the hardware," he said.

But the biggest issue he sees is that of teacher training.

Intel had already trained five million teachers to make better use of technology and aimed to train millions more in the coming years said Mr Barrett.

Row with OLPC

Nigerian children using the classmate

Intel's efforts in education have been overshadowed in recent months by a highly publicised row with rivals, the One Laptop Per Child foundation (OLPC), run by Professor Nicholoas Negropronte.

In July 2007 the two rivals decided to join forces but the partnership was short-lived and in the following January, they split.

"Our relationship with OLPC did not last very long because they told us to stop promoting the Classmate," said Mr Barrett.

"It is up to individual countries which educational philosophy they follow. There are now a number of relatively inexpensive machines available," he added.

But he remains committed to Intel's education programme.

"Whenever I talk to a teacher, they tell me that children using PCs get more excited and want to stay in school. They learn faster, are more enthusiastic and successful," he told the BBC.

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Indian Farmers Moving Toward Organic Farming & Shunning Genetically Engineered Crops

* Indian farmers shun GM for organic solutions
By Sue Branford
The Guardian, UK, July 30, 2008
Straight to the Source

Genetically modified cotton was to be the saviour of India's farmers, but ill-health and financial worries are fuelling a backlash

"My family was one of the first to stop using pesticides," says Sattemma, a lively Indian woman in her mid-40s, confidently talking to a group of visiting farmers. "Three years ago, we realised we were spending over half our income on chemicals. It was too much. We were getting into debt and the pesticides were making us ill." Sattemma is in the village of Lakshminayak Thanda in Warangal district of Andhra Pradesh. The visitors are keen to know how she and other villagers are progressing after their decision to stop using pesticides and Bt cotton, the genetically modified variety manufactured by US biotechnology firm Monsanto.

Bt cotton was engineered to combat pests, with the introduction into the cotton seed of a gene from a soil bacterium called Bacillus thuringiensis (Bt), which has a natural insect-killing poison called Bt-toxin. When it was introduced into India at the turn of the century, it was promoted as the "wonder product" that would solve the serious problem of pests, which many of India's 17 million cotton farmers were facing.

Many of the farmers had not been growing cotton as a cash crop for very long. In the late 1980s, under pressure from the International Monetary Fund, India had opened up its strongly protected economy and encouraged its farmers to switch to modern farming, with its hybrid seeds, fertilisers and pesticides. The idea was to turn India into an important exporter of commodities, including cotton.

At first, cotton farmers did well. They got high yields and enjoyed a real increase in income. But then problems arose. The hybrid cotton proved susceptible to pests and diseases, and it was not uncommon for farmers to spray their fields up to 30 times in a single season. Production costs went through the roof and farmers got trapped in debt. They became desperate for a technical fix, and Bt cotton seemed to be the answer.

In its first year of sales, Mahyco-Monsanto sold its entire stock of Bt cotton. According to the company, the area in India under Bt cotton rose from 3.1m acres in 2005 to 14.4m acres in 2007. According to Sekhar Natarajan, regional leader of Monsanto India, Bt cotton yielded 700kg-900kg per acre, compared with 300kg-400kg an acre with conventional seeds.

However, some say that what has been happening on the ground has been very different from the official success story. Scientists Abdul Qayum and Kiran Sakhari assessed Bt cotton's performance in the first three years and found that, despite claims by the company, farmers were not achieving big yields. This perhaps was to be expected, because Bt cotton had been engineered to reduce pesticide use, not to increase yields. But, more surprisingly, they found that pesticide use was not falling either, because farmers were facing serious problems with secondary pests. They worked out that, on average, the income of non-Bt farmers was 60% higher than that of Bt farmers. Monsanto contests these numbers.

There have been other, more alarming problems. In her chat with the visiting farmers, Sattemma says she had seen several of her neighbour's goats die after spending all day grazing on post-harvest Bt cotton plants. Such a story could be dismissed as anecdotal, if it were not backed up by more solid evidence. In 2006, more than 1,800 sheep died in similar circumstances in other villages in Warangal district. The symptoms and post-mortem findings suggested that they had died from severe toxicity. Hundreds of agricultural workers had also developed allergic symptoms when exposed to Bt cotton.

Full Story: http://www.guardian.co.uk/environment/2008/jul/30/gmcrops.india

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Monsanto's New Front Group

* Ethanol Lobby's "Alliance for Abundant Food and Energy" Seeks to Gorge on Tax Subsidies
PR Watch, July 25, 2008
Straight to the Source

Source: Washington Post, July 25, 2008
Monsanto, Dupont, Archer Daniels Midland and the PR giant Burson-Marsteller are some of the corporations behind the Alliance for Abundant Food and Energy. No doubt feel-good ads from this front group will soon fill the airwaves, especially in Washington DC. The Washington Post reports, "A group of the world's biggest agribusiness companies announced it will use lobbyists on Capitol Hill and national ads to build the case for fuels such as ethanol and biodiesel, even as grain prices climb worldwide. The biofuels industry has blossomed under federal mandates requiring the United States to increase alternative fuel usage by 2009. The mandates are under attack from groups who blame the new industry for rising food prices that have sparked riots and hoarding in several countries. ... The alliance has a budget of several million dollars for the campaign, but it did not disclose the exact amount."

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Libya seeks arms deals, closer energy ties with Russia
17:55 | 31/ 07/ 2008

MOSCOW, July 31 (RIA Novosti) - Libya's prime minister told his Russian counterpart on Thursday that his country plans to buy more Russian arms, and wants to step up cooperation in nuclear power as well as and oil and gas production.

Vladimir Putin said after hosting talks with Libya's al-Baghdadi Ali al-Mahmoudi: "We are committed to continuing cooperation in the military-technical sphere, among others, especially since the Libyan leadership has confirmed its interest in buying quality products from the Russian defense industry."

The Libyan premier said the sides had agreed on specific forms of bilateral cooperation aimed at "strengthening the Libyan Armed Forces."

The premiers discussed Libya's plans to build a nuclear power plant and linked desalination facility, as well as Russian investment in the North African state's oil and gas sector.

Al-Mahmoudi said the Libyan National Oil Corporation enjoys a "special relationship" with Russian energy giant Gazprom, and that the sides are engaged in active consultations.

He invited Putin to visit Libya in August to attend the launch of a $2.2 billion railway construction project.