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The land area and production of cotton have been shrinking every year particularly after 1997-98 due to lack of government’s initiatives to encourage its cultivation.
   Farmers do not see it as a viable crop as local spinners can procure cotton at lower prices from international market.
   According to the yearly statistics of the Cotton Development Board, in 1997-98, the cotton cultivation area was 54,400 hectares and the production was 98,600 bales, the country’s highest ever annual cotton output.
   Since then, the cotton sub-sector looked topsy-turvy, which officials and farmers attributed to lack of consistent supports and incentives for cotton cultivation.
   Farmers are loosing their interest in cotton farming due to drastic fall in global cotton price since 1999-2000.
   They gradually switched over to other cash crops, vegetable farming and plantation of fruits like banana and papaya, which they found more rewarding.
   Just a year after the record production in 1997-98, the area under cotton farming abruptly dropped to 42,640 hectares and production fell to 62,500 bales in 1998-99 due to severe flooding.
   Farmers cultivated cotton on wider area in 1999-00 to make up for the flood losses. Both area and output rose to 48,000 hectares and 83,700 bales respectively in the following year.
   But the output shrank less than half to 40,500 bales in 2000-01 with land area dipping to 35,120 hectares.
   In 2001-02, production again jumped to 83,800 bales as 51,000 hectares of land were brought under cotton farming, the CDB data showed.
   The area and production were 47,600 hectares and 78,700 bales in 2002-03; 76,100 hectares and 82,100 bales in 2003-04.
   In 2004-05, 43,600 hectares were earmarked for cotton cultivation to chase an ambitious target of 123,223 bales, which ended up in 73,190 bales.
   Experts said that cotton farmers have so far been left out of the government priorities and focuses.
   They suggested that the government should give subsidy and ensure fair price of cotton to lure farmers to its cultivation.
   Besides, the government needs to invest more in research and development as well as technological infrastructure to develop short-spanned high yielding varieties of cotton.
   Price of local cotton seed should be raised by 20-25 per cent to adjust to the international seed price. Price of local cotton seed is Tk 26-30 per kilogram, while it is equivalent to Tk 30-35 per pound (1 kg = 2.2 pounds) in international market, the experts pointed out.
   Every year, the country’s textile sector spends foreign currency equivalent to over Tk 2000 crore on import of raw cotton.
   The amount could significantly be minimised if the government initiates required development schemes for cotton as in place for other crops, said Gholam Rasul, senior marketing officer of Cotton Development Board under the Department of Agricultural Extension.
   Sources said lack of modern research facilities and shortage of skilled manpower are among the factors that hamper the development of cotton as a crop.
   Lack of financial and technological supports from the government as well as want of efficient manpower handicap the five major cotton research and seed production centres located in Gazipur, Dinajpur, Rangpur, Jessore and Bandarban districts.
   These centres are currently manned by 15 scientists in all, while each of the centres needs at least 17 scientists.
   The poor strength in cotton research is reflected in the field level that lacks improved varieties of seed.
   Only five medium yielding varieties are now available at field level. These include CV-1, CV-3, CV-5 and CV-9 which need 180-190 days for harvest, while improved variety needs 125-130 days to mature and it could be economically profitable for the farmers.
   The varieties now available are planted in rainy season (July-September) and harvested in January-March, and are exposed to hit hard by excessive rain and floods.
   Development of high-yielding varieties could relieve cotton farmers of rain-related production loss, researchers said.
   However, cotton agronomist of the Central Cotton Research, Training and Seed Production Firm, based in Sreepur of Gazipur, Habibur Rahman Mian said,
   ‘The quality of local cotton is not inferior compared to that of cotton seeds of CIS and neighboring countries like India, Pakistan and China’.
   The annual demand of raw cotton for the textile sector is 14-15 lakh bales while the local production hovers around 70,000-80,000 bales. Raw cotton is imported mainly from USA, Egypt and Pakistan.
   Pakistan produced a record 14.8 million bales of cotton in the 2004-05 crop year.

As retailers in the European Union countries are facing fresh supply crisis due to re-imposition of quota on Chinese textile import, local exporters on Friday said it could help Bangladesh to boost its textile export.
   Some of them, however, said it might not help Bangladesh until the Christmas festival. But it will help them next year as EU retailers will decrease their orders in China, because of uncertainty.
   China had already exceeded its export limit of 69 million sweaters to the EU from 11 June to the end of the year. The European Commission had stopped issuing import licenses after 12 July because China had hit its limit.
   Besides that, recently Chinese made T shirts, trousers and other garment products, also exceeded their export limit to the EU.
   The import restriction, meanwhile, angered EU retailers and worried them about meeting customers’ demand that peaks during the Christmas.
   The Sunday Times reported that British retailers are switching production to Bangladesh, India, Turkey and Sri Lanka.
   ‘The European buyers have already increased placement of orders in Bangladesh due to the crisis,’ said Anwar-ul Alam Chowdhury Parvez, senior vice president of the Bangladesh Garment Manufacturer and Exporters Association.
   ‘If we fail to take benefit this year, next year will be a booming one for the local industry,’ said a happy Parvez, who is a major exporter of T-shirt.
   President of the Bangladesh Knitwear Manufacturer and Exporters Association, Fazlul Hoque, said, ‘No doubt, number of order is increasing especially in the case of trousers.’
   ‘It is very much positive for us as EU retailers will become unpredictable about China,’ said Hoque, who also exports T-shirt.
   But another major sweater exporter of the country and president of the BGMEA Annisul Huq contradicted with the report saying that his order is not ‘increasing.’
   He also said, ‘The local garment industry is not capable to meet up the demand before Christmas.’
   President of the BKMEA disagreed with him on this point. He said, ‘we the knitwear exporters are very much capable of meeting orders before Christmas and we are already receiving fresh orders to meet the deadline.’
   Textile is the largest export earner for Bangladesh. It fetches 68 per cent of the total export earnings. It also employs 2.1 million workers, almost 90 per cent of them are women.
   The export earnings of Bangladesh from garment products stood at $5.6 billion in 2003-04, compared to $4.9 billion in 2002-03.

Five foreign investment delegations, including a high profile business group of the United Arab Emirates, are scheduled to visit Bangladesh this week to hold talks on multi-billion dollar investment proposals in sectors ranging from telecom to tourism.
   The investment teams encompass two from China, Luxon Global from South Korea, Delta Pacific from the United Kingdom and the UAE’s Dhabi Group headed by its chairman Sheikh Nahayan Mabarak Al Nahayan, officials of the Board of Investment have told New Age.
   Also, two more delegations from Pakistan are expected to come to the country in first and third weeks of September, the board officials said describing the trend of arrival of investment delegations as ‘very healthy scenario despite obsessions of bomb blasts at home and abroad.
   Mabarak Al Nahayan, who is also the education and information and communications minister of his country, will visit Bangladesh between August 31 and September 2 to have detail talks on $2 billion investment in telecommunications, tourism and infrastructure building.
   Apart from his schedule to inaugurate a branch of the Bank Al-Falah Limited, which had earlier taken over Shamil Bank in Bangladesh, Al Nahayan will also meet the president, the prime minister, the foreign minister, the executive chairman of the Board of Investment and the chairman of the Bangladesh Telecommunications Regulatory Commission.
   An advanced team of technical experts and executives headed by chief executive officer of the Dhabi Group Bashir A Tahir arrives today (Saturday) to prepare the grounds for Al Nahayan’s formal talks with the Bangladesh officials.
   Luxon Global’s team is scheduled to arrive in Dhaka tomorrow (Sunday) to hold talks on its $1 billion investment proposal in power, gas and coal.
   Delta Pacific, which has been planning a joint venture with a Canadian company, is expected to come to Bangladesh on the same day.
   The board officials said two Chinese delegations are scheduled to arrive on Monday to hold talks on textiles, chemicals and energy sectors.

The capital market has responded positively to the central depository system as it has been facilitating scrip-less share trading without any major setback since its inception 15 months back.
   Market analysts said that regular monitoring by the Securities and Exchange Commission helped smooth operation of the Central Depositary Bangladesh Ltd, the service provider of scrip-less trading system.
   The system has reduced risks of fake shares and freed share transactions from hassles. But still it poses some user-end risks that require urgent remedy, market analysts feel.
   The CDBL started its equity market operation in January 24, 2004 with only one stock, Square Pharmaceuticals Ltd, and by now, 76 listed companies have joined the scrip-less and electronic trading system.
   So far, more than 12.76 crore paper shares have been dematerialised and converted to intangible electronic form.
   ‘These shares did not include primary shares allotted through CDBL directly as well as right and bonus shares, which means that the real number of demat shares is more,’ said Farhad Ahmed, executive director of the SEC.
   ‘Again, companies with scrip-less shares account for about 70 per cent of the market capitalisation implying that major transactions have now come under CDS,’ he added.
   The CDBL operates and maintains electronic book entry and records of listed securities accounts and registers transfer of securities along with changing the ownership without any physical movement.
   So far, more than 4.08 lakh beneficiary owners (BO) accounts have been opened with different depository participants (DP), the companies eligible for participation in scrip-less trading through CDS.
   So far, the SEC has issued licenses to 187 companies for functioning as depository participants.
   ‘All these indicate that investors’ confidence in the system is growing,’ Farhad continued.
   He also said that complaints with CDS became very thin for the last few months as both the investors and brokers had become used to the system.
   Market analysts, however, partially differ with the SEC official as they believe that the system is yet to be tested in trouble.
   ‘We are yet to utilise the real benefit of the CDS, that is real time transactions and settlements,’ said a top broker at the Dhaka Stock Exchange.
   He was of the view that although the broker-dealers and clients are comfortable with the CDS, there is a scope to further widen the facility.
   He, however, observed that real-time settlement requires full-fledged online banking system.
   Another market analyst said that risk with CDS now lies on user-end and the market regulator should review the whole process.
   ‘As the depository participants have authorised access to clients’ beneficiary accounts (BO), any transaction may take place beyond the knowledge of clients,’ he said.
   ‘The SEC should also go for stocktaking of all the depositary participants and a mechanism should be developed before any such incident takes place,’ the analysts continued.
   The chairman of the SEC, Mirza Azizul Islam, also acknowledged the risk factor as some had already drawn his attention to the matter.
   ‘It is a technical issue and I have already instructed the concerned department to review the matter,’ he told New Age.
   Following the regulator’s instruction, different depository participants have closed some 62,674 false BO accounts, including some 26,000 opened for Premier Bank’s abortive public offers in February.
   Despite the move, some of the DSE stockbrokers said that scope of fake BO accounts is yet to be plugged completely.
   The market regulator is likely to address the issue by revising some provisions of opening BO accounts, said sources in the SEC.

A group of lawmakers representing major political parties in parliament set a rare example of unity on national interest as they have launched a platform to address the issues of globalisation and trade liberalisation.
   A Bangladesh Nationalist Party lawmaker, Abu Hena, announced the birth of the forum, styled ‘All Party Parliamentary Group on Bangladesh Development Forum and World Trade Organisation’ at a news conference at the National Press Club on Friday.
   Hena was made chairman of the group while Quazi Golam Morshed MP of the BNP, Muhammad Serajul Akbar MP of the Awami League, Ghulam Habib Dulal MP of the Jatiya Party, Khadiza Amin MP of the BNP, Farid Uddin Chaowdhury MP of the Jamat-e-Islami Bangladesh, Motahar Hossain MP of the Awami League was the other members of the executive board of the group.
   On the debut day, the group called upon the rich countries to take steps for a wider market access for the products of the poor countries.
   In its declaration, the group requested the government to devise realistic strategies to deal with the emerging issues of globalisation and trade liberalisation.
   The chairman said,’ We, the parliamentarians, strongly call upon the BDF, especially the World Bank, IMF and ADB, to ensure that the democratically elected representatives are the final arbiters of all economic policies in the country.’

Australia and Malaysia were on track to conclude negotiations for a free trade agreement by mid-2006, the Malaysian trade minister, Rafidah Aziz, said on Friday after talks with her counterpart, Mark Vaile.
   ‘We hope to complete the process by mid-next year,’ Rafidah told a news conference.
   Vaile described the process as having been ‘incredibly healthy and productive’, but said it was still ‘early days at this stage’ and declined to nominate a date for the talk to conclude.
   He said both countries were continuing to ‘working through the process, initially of establishing the perimeters and the key areas we want to work on.’
   ‘We do not commit ourselves in absolute terms to a timeframe. It is more important that you get a good outcome rather than meet a deadline.’
   ‘We are hopeful that is, in due course, 2006, and that is the target that we will work towards,’ he said.
   ‘If it takes a bit longer, or if we do it any quicker, all the better, but we want to ensure that the agreement is a good agreement for both sides.’
   Vaile said Australia was working to ensure that the meat exports to Malaysia, were slaughtered in accordance with halal standards.
   ‘The customer is always right. If you do not work off that premise, then you are not going to sell a product,’ he said.
   ‘There are certain requirements under religious law, as far as halal certification is concerned and there are some issues that we are working through, particularly with JAKIM (Department of Islamic Development Malaysia), to make sure that those requirements are achieved.’
   Malaysia recently suspended beef imports from several Australian abattoirs, amid concerns over slaughtering methods.
   It imports about 10,000 tonnes of Australian beef per year.
   In 2004, it imported Australian meat and livestock products worth about 250 million ringgit ($66.30 million).
   The Australian prime minister, John Howard and the Malaysian prime minister, Abdullah Ahmad Badawi, agreed to launch negotiations on a free trade agreement, during Abdullah’s visit to Canberra in April.
   According to the Australia’s department of foreign affairs and trade website, one of its key objectives is to eliminate tariffs imposed by Malaysia on its dairy products, horticultural products, processed meat, seafood, tropical fruits and alcoholic beverages.
   The annual bilateral trade between the countries amounts to some $7.5 billion and Malaysia is Australia’s ninth largest trade partner.
   Australia exports raw cane sugar, copper, milk and cream, wheat and coal to Malaysia.

The soaring oil prices may force the Philippines to revise its economic growth target this year, the economic planning secretary, Augusto Santos, said on Friday.
   The government’s development budget coordination committee, which has set a 5.3 per cent growth domestic product growth target this year from 6.1 per cent in 2004, is to meet next week, Santos said in a statement.
   After Manila releases GDP growth figures Monday, for the three months to June, the committee is to meet ‘to review its assumptions and validate its economic projections for the rest of the year,’ he said in a statement.
   Santos said he remained confident that Manila would achieve its original growth target, despite the expected slower growth in the three months to June and ‘extraordinary increases in oil prices.’
   With GDP expected to have grown between 4.7 and 5.1 per cent in the three months to June, compared to 4.6 per cent in the three months to March, the economy would need to grow by between 5.8 and 6.0 per cent in the second half, he said.
   This ‘is possible as we expect agriculture, industry and services to grow by 4.7 per cent, 4.8 per cent, and 6.6 per cent, respectively, in the second half,’ Santos said.
   Agriculture would benefit from the end of an El Nino drought, while mining, food and beverage manufacturing, and construction are expected to support industrial growth, he said.
   Financial services should also perk up with the non-performing loans of banks back to single digits, he added.
   Nevertheless, government simulations suggest ‘that a rise in the price of oil to an average of $60 per barrel, starting August 2005 until the yearend, will cause a slowdown in economic growth to around 5.2 per cent,’ he said.
   Higher inflation due to more expensive petroleum products would jack up production costs and dampen domestic demand, he added.
   Trade data released this week were not encouraging, with imports, many used as raw materials for the key electronics industry, were down 1.5 per cent in the first half to $21.52.
   Analysts suggested manufacturers were cutting back on production until oil prices stabilised.

Singapore and Pakistan on Friday concluded the first round of talks towards a bilateral free trade agreement, the city-state’s trade ministry said.
   Pakistan would host the next round in November, said the statement.
   ‘Both sides had fruitful discussions on the key issues in trade in goods, rules of origin, trade in services, and investment, as well as the legal chapters of the FTA,’ it said.
   The two countries announced in May, plans to begin talks on a bilateral FTA when the Pakistani prime minister, Shaukat Aziz, visited Singapore.
   Singapore, dependent on foreign trade, is a pioneer in negotiating free-trade pacts, having signed FTA with the US, Japan, Australia and New Zealand, among others.

The US multinational firms have repatriated $191 billion under a one-time tax break enacted by the Congress, and the total is likely to reach $300 billion to $350 billion, a study showed on Thursday.
   The American Shareholders Association said the amount of money being repatriated was likely to vastly exceed the congressional estimate of $135 billion, when it passed the American Jobs Creation Act last year.
   The bill allows companies to repatriate foreign profits back into the United States at a 5.25 per cent rate, compared to the 35 per cent tax rate norm ally in effect.
   The report said the International Strategy and Investment Group cited 91 listed companies that have repatriated more than $191 billion.

The staff of Qatar Airways, initiated a fund-raising drive towards the reconstruction of 25 homes in a village, affected by the tsunami in Sri Lanka.
   The village Jambuwatte in Balapitiya, was one of the worst hit areas.
   Addressing a press conference recently in Colombo, the chief executive officer of Qatar Airways, Akbar Al Baker, said he was extremely grateful to the employees of the company to have initiated the fund-raising effort, which the airline had fully supported.’

The Emirates SkyCargo recently showcased its expertise in transporting outsized shipment, when it moved a massive engine from Dubai to Calgary, Canada and back, said a press release.
   The 13-tonne LM6000 engine, being used in a power plant to produce electricity for residential and commercial buildings in Tanzania, travelled on the Emirates SkyCargo’s Boeing 747-400F from Dubai to New York and finished its journey by special truck to Calgary.
   After it was put through its maintenance paces, the Emirates SkyCargo brought the engine back to Dubai, from where it has made its way to Dar Es Salaam.
   The Emirates’ senior cargo Sales executive based in Calgary, Keith Stanley, who liaised with the various parties to organise the transfers said: ‘Besides our ability to move outsized shipments, this is clearly a prime example of the Emirates SkyCargo’s customer partnership bound in a tripartite agreement with our agents the Kuehne and the Nagel.’

The current crisis over Chinese textiles products blocked by EU customs, which European negotiators are trying to resolve through talks in Beijing, was largely predictable and raises the question of the utility of the quotas that caused the problem, trade experts say.
   The rapid filling of quotas on 10 Chinese textile products has put the EU in a quandary as retailers rise up in arms over not being able to take delivery on goods because the quotas agreed with Beijing only a little over two months ago have been filled.
   The current crisis has refocused attention on the validity of the quotas in the first place.
   EU trade commissioner Peter Mandelson originally sought a deal to limit Chinese textiles—which he triumphantly secured in June in Shanghai—after facing fierce pressure from the European textile industry.
   However, hat defence is getting harder to make amid the current crisis of blocked shipments, experts say.
   ‘Quotas were never the way forward to begin with,’ said trade expert Dean Spinanger at the Kiel Institute for World Economics.
   International economics professor Philippe Chalmin at the Paris-Dauphine university said that the current crisis was inevitable given the comparative advantage China enjoys in the labour-intensive textile sector thanks to its vast pool of relatively cheap workers.
   Ministers from Denmark, Finland, the Netherlands and Sweden attacked the quotas on Chinese textiles in an op-ed piece in the Financial Times last Thursday, saying the restrictions had ‘backfired’ and risked causing the bankruptcy of EU trading firms and job losses. In the article, ministers argued that quotas were outdated and said that ‘trying to stop imports and outsourcing amount to economic suicide.’
   The most recent figures available from Eurostat broadly suggests that European manufacturers are suffering sharp declines in orders following the end of a four-decade-old international quota system at the end of last year, which kept a lot of the Chinese production out of the EU.
   At the same time, the figures also indicate that clothing prices have fallen while sales have risen at rates above the average for all products.
   Eurostat data show that new orders for EU textile and clothing factories—which in general have long been suffering—dropped 4.6 per cent in June over one year, while for all industries combined orders increased 5.2 per cent.
   The decline was not limited to June but reflected a trend seen in the sector since the beginning of the year. March was a particularly harsh month for the EU textile industry when new orders plunged 13.5 per cent over one year.

The European Union and China held a second day of talks Friday on a dispute over textile exports that has left millions of Chinese-made clothes stuck in customs and off the shelves of stores in Europe.
   There was no public indication of progress on the impasse after Thursday’s opening discussions, called just two months after the EU and China had signed a quota deal to avert a trade war.
   Chinese exports, surging since a global system on textile quotas was abolished at the beginning of the year, quickly reached those agreed limits, leaving millions of products blocked by EU customs officials.
   ‘The Chinese side expressed its concern over the textile products blocked at customs in EU countries,’ a Chinese commerce ministry spokeswoman told AFP in describing Thursday’s negotiations.
   European Union negotiators said the backlog of products was ‘not in the interests of EU traders and consumers,’ she said.
   According to the French trade ministry earlier this week, 48 million sweaters, 17 million pairs of trousers, some 500,000 blouses, 1.6 million T-shirts, 3.4 million bras and 1,470 tonnes of flax yarn are being held up.
   China’s textile exports to Europe surged to 2.1 billion dollars in June, up 85 per cent over the same month last year, as rush orders for Chinese goods soared while negotiators hammered out the new quotas, China’s trade ministry said.
   A senior Chinese trade official said part of the problem was that the EU and China agreed that the period between June 11 and July 20 was needed to set up mechanisms to monitor the textile trade and the implementation of the agreement.

Oil prices pulled back from recent record highs in Asian trading Friday on indications Hurricane Katrina would spare offshore oil rigs in the US Gulf Coast, dealers said.
   Oil prices however remained above 67 dollars a barrel on persistent concerns over production and refinery bottlenecks amid robust energy demand to meet the needs of the world’s major economies.
   At 12:00 pm (0400 GMT), New York’s main contract, light sweet crude for delivery in October, was trading at 67.18 dollars a barrel, down 31 cents from its record closing price of 67.49 in the United States on Thursday.
   Prices had touched an all-time high of 68 dollars a barrel in after-hours electronic trading on Thursday but failed to gain support.
   ‘There are indications that the hurricane is veering away from the main production areas in the Gulf of Mexico that’s why traders are taking profit,’ said Tetsu Emori, chief commodities strategist at Mitusi Bussan Futures in Tokyo.
   ‘Also, today is a weekend so traders don’t like to keep their positions.’
   Hurricane Katrina slammed ashore in Florida on Thursday, killing at least two people, leaving over a million homes without power and collapsing a Miami highway overpass.
   There had been initial concerns that Katrina could swirl over offshore rigs in the Gulf of Mexico, but forecasts late Thursday showed the hurricane should remain to the east of the main oil fields.
   Emori said he expects prices to dip further next week as the summer driving season in the United States—the world’s biggest energy consumer—draws to a close, easing pressure on gasoline prices.

Plans by Asian giants India and China to mount joint bids for foreign energy projects are still at a ‘pioneer’ stage and will not end their rivalry for resources, a top Indian government official said.
   India, which has been scouring the globe for fuel supplies to feed its fast growing economy, said earlier this week major Indian oil companies would sign cooperation pacts with China’s top energy firms later this year.
   The head of the Indian oil ministry’s international division said plans for collaboration by the neighbours were still at an early phase.
   ‘We are at the pioneer stage. We are taking the first footsteps of cooperation,’ Talmiz Ahmad told AFP late Thursday.
   He added that ‘cooperation does not exclude competition’ for resources by India, which imports nearly 70 per cent of its oil needs, and China, which relies on foreign producers for one-third of its oil supplies.
   The countries’ expanding fuel appetites, spurred by booming economies, have strained world energy supplies and helped propel oil prices to record highs.
   They have been arch rivals for stakes in oil and gas projects around the world.
   India’s Petroleum Minister Mani Shankar Aiyar underscored the ‘need for China and India to adopt a collaborative approach in bidding... whenever possible.’
   ‘On the basis of assessments (Indian and Chinese) companies will make, we will cooperate and we will compete,’ Ahmad said. ‘Hopefully we will cooperate more than we compete.’
   Memorandums of understanding between companies such as India’s ONGC and Indian Oil Corp and Chinese firms Sinopec, China National Petroleum Corp and CNOOC will be signed when Aiyar visits China in November.
   Afterwards, ‘a joint bilateral working group will be set up to monitor progress of cooperation and promote the momentum of cooperation,’ Ahmad said.

Indonesia is to hike its key interest rate next month and government-subsidised fuel prices are also to be jacked up in response to the rupiah’s plunge to dismal lows the past week, authorities said.
   The central Bank Indonesia will raise its three-month reference or BI rate next month to ease pressure on the currency, which is hovering at a three-and-a-half year low amid soaring global oil prices, a bank official said.
   The BI rate was launched in July to provide a reference band within which fluctuations of the one-month benchmark rate of Bank Indonesia Certificates (SBIs) over the following three months should move. The move was part of a new monetary policy aimed at ensuring a better way of setting inflation targets.
   First set at 8.50 per cent, the BI rate was raised to 8.75 per cent earlier this month as the rupiah started to fall alarmingly but analysts have argued it must be raised further to help counter the rupiah’s fall.
   The local currency has slumped 11 per cent since the start of the year as high oil prices have seen Indonesia, a net fuel importer, scurry to buy dollars to foot the bill and also pay out ever-larger fuel subsidies.
   ‘Of course the SBI rate will be higher from the current 8.75 per cent,’ BI senior deputy governor Miranda Goeltom told a parliamentary budget committee Thursday night.
   ‘But I cannot say to what level as it will depend on the board meeting’s decision,’ she said.
   Goeltom said BI intervention in the forex market is just a ‘short term solution’, with the BI and government needing to address structural problems that affect demand and supply of foreign currencies.
   ‘In that sense, improving the investment climate to attract foreign investment, as well as boosting export competitiveness, are keys to overcoming pressures against the rupiah,’ she said.

Thai rice prices are expected to dip further over the next week with demand thin and speculation rife that the government will sell more of its vast stocks in coming weeks, traders said yesterday.
   Thai 100 parboiled rice was down $1-2 at $283-284 a tonne on a free- on-board basis, excluding freight costs, on Thursday from last week RICE/ASIA1 .
   Thai grade A fragrant rice was steady at $410 a tonne FOB.
   The domestic price of 100 per cent grade B paddy was down 0.10 baht per kg at 11.20 baht ($272 per tonne) from a week earlier.
   ‘The domestic price fell from last week on a lack of demand. Also, there is no government’s buying scheme to support it,’ said Kriangsak Tapananon, an executive at the Thai Millers Association.
   There was talk in the market that the government would sell more of its large stock of 3 million tonnes in coming weeks before farmers start harvesting the main crop in November, traders said.
   ‘There is also talk in the market that the government will hold a tender sometime before the end of the month,’ said one.
   The government has sold only 180,000 tonnes from its large stockpile so far.
   The government buys from farmers to support domestic prices. It ended purchases on August 15 and will resume them in November at slightly higher prices.
   It raised its intervention prices by 300 baht ($7) per tonne for all grades of paddy, except fragrant rice, and plans to buy 9 million tonnes between November and February.
   The intervention price for 100 per cent white paddy grade was be set at 6,900 baht per tonne ($168), up from 6,600 baht in the previous crop.
   Between Jan. 1 and Aug. 17, Thailand exported 4.63 million tonnes of rice, 23 per cent less than the 6.02 million shipped in the same period of last year.
   Thailand, the world’s largest rice exporter, shipped a record 10.13 million tonnes of rice last year, up from 7.58 million tonnes in 2003.
   However, drought could trim exports to 7.5 million tonnes this year, or even less, exporters said. ($1=41.12 Baht)

In a landmark ruling, a US judge endorsed a lawsuit charging two federal agencies with wrongly funding international oil and gas projects that promote global warming, court documents showed Thursday.
   Export-Import Bank and the Overseas Private Investment Corporation have supported fossil fuel projects worldwide without considering the potential harm to the planet, according to the complaint.
   The suit asks the court to compel OPIC and Ex-Im, whose directors are appointed by US President George Bush, to comply with environmental regulations and shift funding to alternative energy sources and conservation programs.
   ‘This lawsuit is part of a broader effort to realign economic and industrial activity with ecological constraints,’ Mayor Jerry Brown of the California city of Oakland told AFP on Thursday.
   Judge Jeffrey White ruled on Wednesday that environment groups Greanpeace and Friends of the Earth and the US cities that united to file the suit have legal standing to make their claim and a point worth pursuing in court.
   ‘It is profoundly important because it is a major step forward in holding these agencies to a rule of law, in this instance a rule of environmental law,’ Brown said of the ruling.
   OPIC and Ex-Im ignored national Environmental Protection Act mandates while approving more than $32 billion in loan guarantees and insurance for oil and natural gas projects in the past decade, the suit charged.
   Projects included the largest new oil fields in South America, Russia, Southeast Asia, West Africa, Mexico and the Caspian Sea region, according to the suit filed in 2002.

African textile producer Mauritius hopes the pile-up of Chinese apparel in European stores in a tussle over quotas will have a positive knock-on effect for the Indian Ocean island’s main export-earning sector.
   As textile export ceilings have already been reached from a two-month- old trade pact between China and the European Union, millions of trousers, sweaters and other garments from China have been blocked and are piling up in ports and warehouses.
   Producers in Mauritius, which already exports 67 per cent of its textiles to Europe, said new orders were coming in on the back of the confusion over Chinese garments.
   ‘I have received a good number of orders from British retailers who were heavily dependent on China,’ a happy Francois Eynaud, director of T-shirt producer Tropic Knits, said.

Japan has no plans to draw on its strategic oil reserves in response to the latest price spike, despite the country’s high reliance on energy imports, the government said Friday.
   ‘We have not yet come to a situation where we need to draw down on our stocks,’ the country’s economy, trade and industry minister, Shoichi Nakagawa, told reporters. Japan had enough oil in its emergency stockpile to last for 170 days, but would only dip into the reserves if there was a shortage of supply, he said.
   ‘When we really come to a situation where we need to do so we have the option to draw down on our stocks.
   ‘But this is only when there is a shortage in term of volume of supply. Currently we do have the volume. Countries such as Japan, Europe, US and China have the capacity to purchase the oil that is on the market,’ he said.

Japanese exports to China are picking up pace after months of anaemic growth but are unlikely to reach the booming rate of the past few years, keeping a lid on Japan’s economy.
   In addition to brisk exports of plastics and power generators, the long struggling high-tech sector showed signs of bottoming out in July. The rate of year-on-year drop in exports of microchips and other electronics parts—the largest component of exports to China—halved from June.

Workers demanding higher pay stepped up strike action Friday at South Korea’s largest automaker, Hyundai Motor, forcing management to shut the plant down for 12 hours, company officials said.
   ‘Power switches are already turned off and all assembly lines are quiet,’ an official of Hyundai Motor in the southern city of Ulsan told AFP by phone.
   Some 16,000 workers walked out at 10:00 am (0100 GMT) for a six-hour strike. Workers on the overnight shift will carry on the stoppage for a further six hours from 11:00 pm.

Australia’s conservative prime minister, John Howard, has signalled he will seek a controversial cut in the income tax paid by the country’s wealthiest people.
   Howard said the current top income tax rate of 47 cents to the dollar, paid by just three per cent of Australians, was too high.
   The rate applies to Australians earning more than 95,000 dollars (72,200 US) per year. This will rise to 120,000 dollars next year, though Howard said it was still too low.

Some 500,000 people in southern California were affected by rolling blackouts imposed by authorities Thursday due to high demand for electricity and the loss of a transmission line, a local utility said.
   ‘The independent California system operator asked Edison to drop 800 megawatts on load because we’re in a state of stage 3 emergency, it’s the most serious, our reserve has fallen below 1.5 per cent,’ Susan Heard of Southern California Edison told AFP.
   ‘The reason this has happend is because of high heat, high demand and the loss of the transmission line,’ she said.
   Power was restored to the areas affected by the blackouts late afternoon Thursday as the state of emergency was downgraded.

The dollar fell on Friday as the market awaited a speech from US Federal Reserve chairman Alan Greenspan, while the yen rebounded after weakening on fears of a terrorist attack in Asia, analysts said.
   Sterling steadied, meanwhile, in response to an upward revision to British economic growth in the second quarter of 2005.
   The euro rose to 1.2310 dollars in early European trading from 1.2295 late on Thursday in New York.
   The dollar stood at 109.66 yen from 110.05 on Thursday.
   Dealers were not expecting Greenspan to pull any surprises out of the hat when he addressed a conference hosted by the Kansas City Federal Reserve in Jackson Hole, Wyoming, at 1400 GMT.
   ‘The consensus view in the market is that Greenspan will not make any surprising remarks,’ said Mizuho Corporate Bank foreign exchange manager Tatsuro Karitani.
   Greenspan’s comments will as usual be closely monitored, particularly in the wake of hawkish comments from Fed officials Michael Moskow and Jeffrey Lacker, who both pointed to the risk of rising inflationary pressures.
   ABN Amro analyst Shahab Jalinoos added: ‘He is unlikely to use this forum as an opportunity to give an outlook for the US economy, but instead will probably be centred on bigger picture topics.’
   Market players will likely be looking for comments on the recent surge in oil prices.
   The yen recovered Friday after stumbling in Asian trading on a report that Al-Qaeda may be preparing to attack a financial center in Asia.
   The Japanese unit came under pressure after France’s top terrorism investigator, Jean-Louis Bruguiere, told the Financial Times that several Asian countries, including Japan, were underprepared for a possible terrorist strike.
   Elsewhere, the pound benefited little from news that the British economy grew at 0.5 percent in the three months to June from the previous quarter, compared with a prior estimate of 0.4 percent, in line with analysts’ forecasts.
   The euro was changing hands at 1.2310 dollars against 1.2295 late on Thursday in New York, 135.08 yen (135.31), 0.6820 pounds (0.6819) and 1.5472 Swiss francs (1.5414).
   The dollar stood at 109.66 yen (110.05) and 1.2563 Swiss francs (1.2565).
   The pound was being traded at 1.8060 dollars (1.8031), 198.02 yen (198.40) and 2.2687 Swiss francs (2.2657).
   On the London Bullion Market, the price of an ounce of gold stood at 438.60 dollars against 438.85 dollars late on Thursday.

The yen stumbled Friday on a report that Al-Qaeda may be preparing to attack a financial centre in Asia, but later recovered as attention turned to a speech by US Federal Reserve chief Alan Greenspan.
   The yen came under pressure after France’s top terrorism investigator, Jean-Louis Bruguiere, told the Financial Times that several Asian countries, including Japan, were under prepared for a possible terrorist strike.
   ‘We have elements of information that make us think that countries in this region, especially Japan, could have been targeted’ by the Al-Qaeda network, the investigating magistrate said.
   With little other news to drive markets, the report weighed on the Japanese currency in early trading, dealers said.
   ‘Traders reacted a little to the report on Al-Qaeda since the market lacked fresh incentives,’ said Nobuaki Kubo, market trading manager at Risona Bank.
   But the yen recovered by mid-afternoon in Tokyo as investors bought back the Japanese unit to square their positions ahead of Greenspan’s speech late Friday, dealers said.
   The dollar was quoted at 110.03 yen, compared with 110.05 yen in New York late Thursday. The US currency rose to 110.39 yen early Friday.
   Dealers were not expecting Greenspan to pull any surprises out of the hat when he addressed a conference hosted by the Kansas City Federal Reserve in Jackson Hole, Wyoming.
   ‘The consensus view in the market is that Greenspan will not make any surprising remarks,’ said Mizuho Corporate Bank foreign exchange manager Tatsuro Karitani.
   Meanwhile the euro gained to 1.2312 dollars, up from 1.2295 late Thursday in New York. Against the yen, it rose to 135.52 from 135.34 in New York.
   Investors reacted calmly to data showing a decline in Japan’s consumer price index as the figure was in line with the market’s expectation.
   Core consumer prices in Japan fell 0.2 percent in July from a year earlier, official figures showed, indicating Japan remains caught in mild deflation.
   Markets remained worried about the price of oil, which pulled back from record highs in Asian trading Friday, but remained above 67 dollars a barrel.
   Indonesia’s rupiah tumbled to its lowest rate against the dollar since January 2002 despite an expected hike in interest rates next month, buckling under the strain of soaring oil prices.
   In Singapore trading, the dollar rose to 56.095 Philippine pesos from 56.085 on Thursday, 1.6750 Singapore dollars from 1.6717, 32.354 Taiwan dollars from 32.221, 1,028.1 South Korean won from 1,023.7, and 10,445 Indonesian rupiah from 10,340.
   It fell to 41.12 Thai baht from 41.13.

Tourism corp plans for modern
eatery at zoo
Tourism Corporation plans to start a modern restaurant at the Dhaka Zoo in a bid to improve facilities at the zoo as well as make it more attractive to the visitors, a senior official said Friday. Ministries of Civil Aviation and Tourism, and the Fisheries and Livestock have agreed to prepare a project proposal for Tk 22 lakhs in this regard. The Dhaka Zoo curator Mohammad Mafijur Rahman told BDNEWS that officials from the concerned ministries selected the lake-side location for the proposed restaurant beside the elephant and horse sheds. ‘There was a restaurant at this place in previous times too,’ the curator said adding, ‘the tourism corporation plans for renovation of that abandoned restaurant, closed a year ago due to economical viability.’ Besides, there were three more eateries inside the zoo. All of those were shut down following allegations of harassing the visitors to the zoo.
— BDNews

Joypurhat MSU distributes Tk 1.77 lakh grants
Leaders of Motor Sramik Union (MSU) of the district at a simple function on Thursday distributed Tk 1.77 lakh as grants among the families of six workers who died in separate incidents in last five months. Of the total amount, the families of Anwar Hossain and Shariful Islam received Tk 40,000 each while the families of Delowar, Islam and Mohiuddin received Tk, 20,000 each and the family of Lokman Hossain Tk 37,000. Presided over by Motor Sramik Union president Belu Chowdhury, the function was addressed, among others, by its general secretary Rafiqul Islam and organizing secretary Alamgir Hossain.
— UNB

Work on two bridges starts in Comilla
The works on 180 meter Shaheed Zia bridge and 180.20 meter Begum Khadeda Zia bridge began in the district at a cost of Tk 5.79 crore. Communications Minister Barrister Nazmul Huda inaugurated the works on Wednesday. Local Government Engineering Department is implementing the projects. Shaheed Zia Bridge is being constructed on Gomoti river on Khalilpur-Balibari road while Begum Khaleda Bridge on Laxmipur-Charbakor road, said an official release.
— UNB

Kodak trims China operations, cuts jobs
Eastman Kodak Co, battling a steep drop in demand for photographic film and paper, is scaling back film manufacturing in China and closing various businesses in Rochester and West Virginia, eliminating about 1,000 jobs. Kodak, which is navigating a tough transition to digital photography, said Thursday it will consolidate North American color photographic paper manufacturing at factories in Windsor, Colo., and Harrow, England, by shutting down an operation in Rochester by the end of October. It said manufacturing of consumer film products will be cut back in Xiamen, China. Kodak shares fell 4 cents to close at $25 Thursday on the New York Stock Exchange, near the lower end of their 52-week range of $24.63 to $35.19.
— AP

Singapore’s July output up
Singapore’s industrial output rose 5.9 per cent in July from a year ago, bolstered by strong demand for jack-up rigs used in oil exploration and pharmaceuticals, the government said Friday. Electronics, Singapore’s main exports, climbed 2.0 per cent, slower than the 2.5 per cent recorded in June, but this was offset by stronger output in other sectors, including shipbuilding, aerospace and refined petroleum products. The July manufacturing growth was however below analysts’ projections of between 6.2 and 12.0 per cent, and slower than the revised 11.6 per cent expansion in June.
— AFP

S Korean labour groups boycott ILO meeting
South Korean unions said Friday they would boycott an International Labor Organization meeting set for October in the southern city of Busan in protest at government policies. The Federation of Korean Trade Unions (FKTU) and the Korean Confederation of Trade Unions (KCTU) urged the Geneva-based UN body to put off its four-day Asia-Pacific meeting to be held from October 10. The ILO holds the regional meeting every four years, attended by representatives from labor, management and governments.
— AFP