No wheat exports to India: Pak

NEW DELHI: Stating there was no change in its policy of ban on wheat exports, Pakistan on Friday said it would not be possible to sell the foodgrain to India.

"We only have a marginal surplus of wheat and we will utilise it as strategic reserves," visiting Pakistan Commerce Secretary Syed Asif Shah told reporters here.

Shah added that the ban on wheat exports not only applied to India but also to other countries. An upward spiral in domestic wheat prices had prompted Pakistan to ban exports of the foodgrain on May 23.

Earlier this year, Pakistan had lifted a two-and-a-half year ban on wheat exports due to high production and had allowed sale of over one million tonnes of the foodgrain overseas, including India.

Pakistan's wheat output is estimated to be over 23 million tonnes against last year's 21.7 million tonnes. Initially, Pakistan exporters contracted to sell about five lakh tonnes of wheat and a large consignment was sent to India.

Pakistan's decision to ban wheat exports came as a set-back to Indian traders as they are deprived of an opportunity to import at a cheaper price.

Besides, transportation costs, India would also have saved on time by importing wheat from the neghbouring country via Lahore and Karachi to Delhi and Mumbai through the rail and sea routes.

Currently, India is importing wheat from Argentina, Canada and Ukraine. It recently contracted to import 5.11 lakh tonnes of the foodgrain to augment buffer stocks.

In reply to another query, Shah said Pakistan would not require to import sugar from India as it had enough stocks.

Cement firms merger will create regional giant to fend off Asian import competition

The Kenya government has received a proposal for the merger of the two largest cement producers in Kenya, Bamburi Cement Ltd and East Africa Portland Cement Ltd, marking the beginning of what could be the most comprehensive restructuring of the cement industry in Kenya in years, with ramifications likely to be felt throughout East Africa.

If the proposal for the merger — which, incidentally, is supported by East Africa Portland Cement — is approved, French cement conglomerate Lafarge, the most influential player in the region with plants in Kenya, Uganda and Tanzania, will have a chance to consolidate its interest in the region.

The new development points to a thawing of relations between Lafarge and the government, which until fairly recently was still pressing the French conglomerate to relinquish part of its stake in East Africa Portland, arguing that its involvement in the shareholding of the three major producers in Kenya constituted a conflict of interest.

Lafarge has a 41 per cent stake in East Africa Portland and a 17 per cent stake in Athi River Mining Ltd even as it retains a controlling stake in Bamburi — allowing it to enjoy a strategically dominant position in the cement industry in Kenya with representation in the boards of all three cement manufacturers.

In Uganda, the French company has a controlling stake in Hima Cement Ltd, while in Tanzania, one of the major cement producers, Mbeya Cement Ltd, is a subsidiary.

The merger is being supported on the grounds that the two big producers have to merge to create one strong East African champion capable of fending off competition from cement exporters from Southeast Asia, India, the Middle East and Egypt.

East Africa currently remains a high-cost cement producer, partly due to high electricity prices, exorbitant freight costs, high fuel costs and inefficient railway systems, but mainly because the market has for many years been sheltered from competition by high trade barriers.

Although cement companies have over the years been making profits, the industry has been protected by both a 25 per cent import duty plus a 30 per cent suspended duty.

The merger proposal is based on the grounds that this level of protection is unlikely to be sustained in the near future. Under the Customs Union of the East African Community, these duties must be reduced to zero by the year 2010.

Indeed, cement manuf-acturing in the region operate with high fixed costs that are linked to the relatively small sizes of cement plants in the region, thus compounding the problem of high production costs.

The consequence has been ever increasing consumer prices of cement in the region, the impact of which has been that per capita cement consumption in East Africa is one of the lowest in Africa.

According to industry estimates, Kenya’s annual per capita consumption stands at 54 kilogrammes; in Tanzania, it is 37kg in Uganda 32kg. South Africa’s per capita cement consumption is estimated at 200kg.

Clearly, the regional cement market is ripe for consolidation. What is surprising is that even in the face of these grim statistics, recent developments show that the cement industry in East Africa is progressively moving away from consolidating.

Instead of consolidating, nearly all individual cement producers in East Africa are acting as if oblivious to the increasingly hostile international environment they have to operate in.

Each of the major players is currently involved in a race to increase its own market share, spending millions of dollars in costly capacity expansion programmes.

In Kenya, medium producer Athi River Mining Ltd has only recently commissioned an additional kiln in Mombasa. In Uganda, Bamburi is progressing with doubling of the capacity of its Hima plant, while Tororo Cement is moving into the Kenya market with plans to erect a clinker plant in Mombasa and a grinding station in Nairobi.

In Kenya, East Africa Portland is spending millions of dollars to enhance its cement production output, while Bamburi is planning a multimillion dollar greenfield plant.

Yet it is clear that even after the completion of the new plants and facilities, the capacities of cement producers in East Africa will still remain small and comparatively inefficient compared with the big exporting facilities of Southeast Asia.

Several other factors are likely to conspire to keep cement production costs high in the near future while eroding the industry’s position vis a vis imports.

First, it is now estimated that ocean freight rates — which are currently at an all-time high, thus providing artificial protection — will drop by $10-15 in the next five years.

Secondly, with Kenya aggressively modernising its Mombasa port and Tanzania developing its Tanga Port facility to include cement import terminals, inefficiencies and delays in East African major ports will no longer provide the local cement producers with the artificial protection they have been enjoying.

Thirdly, all indications are that the three East African economies of Kenya, Uganda and Tanzania are entering a regime of consistently higher power tariffs.

Fourth, industry experts say that big new low-cost producers from the Middle East are planning a new offensive in the East Africa market very soon. They cite the case of Saudi Arabia, which alone is in the advanced stages of completing 18 cement factories currently under construction.

According to industry estimates, the cement plants in East Africa will have to reduce their manufacturing costs by at least $20 per tonne to survive competition from low-cost producers from the Middle East.

This will require production plants to reach a critical size and streamline the location of their manufacturing plants to minimise logistics — the type of restructuring that is only possible if the existing businesses merge.

The current projections are that the merger of Bamburi and Portland Cement will lead to an entity with a market share of 55 per cent in East Africa — especially after Lafarge’s stake in Mbeya Cement becomes part of the merged regional operation.

Industry sources also believe that the merged company will have the financial and strategic muscle to reach into other inland markets including the Democratic Republic of Congo, Rwanda, Burundi and Southern Sudan.

Proponents of the merger also say that with Bamburi’s sound financial standing in the Kenyan capital markets and ability to raise funds, a merger with East Africa Portland can be achieved at a very low cost and without compromising the interests of the government.

Indeed, Bamburi remains the best candidate for the merger with Portland, because no third party can provide the same synergies, especially considering that the respective production facilities of Portland and Bamburi fit into each other as a result of the tight grid of cement facilities in Mombasa, Nairobi, and Uganda.

How is the merger to be effected? Five proposals have been advanced:

First, allow the current shareholders of East African Portland wishing to exit to receive sale proceeds either in cash or shares.

Second, integrate Lafarge’s stake in Mbeya into the new company.

Third, offer a sales premium by maximising the assessed value of East African Portland through the combination of its current value with a projected value generated by the potential synergies with Bamburi.

Fourth, maintain or increase the local shareholding stake in the merged company.

Finally, consider cross listing of the new company on the three East African stock exchanges.

Sri Lanka bans import of live Indian chicken over bird flue scare

Sri Lanka has temporarily banned the import of live fowl from India following an outbreak of bird flu in the country, officials said Saturday.
The decision comes after India's government on Thursday confirmed an outbreak of H5N1-strain bird flu at a poultry farm in the northeastern state of Manipur, marking the country's first reported outbreak since February last year.

Sri Lanka bans import of live birds from India

Sri Lanka has banned imports with immediate effect, after we received reports of an outbreak of bird flu in Manipur, India," said D.D. Wanasinghe, president of the All Island Poultry Association.

Sri Lanka, which has had no reported cases of the H5N1 virus, also imports a large quantity of maize from India.

"The government has not made a decision to ban Indian maize so far. India supplies 90 percent of our maize requirements. The health ministry told us that they would take a decision shortly," Wanasinghe told AFP.

Foodstuffs such as maize and soya, which Sri Lanka also imports from India, carry a risk of infection because they are grown in fields where chickens live, and crops and packing bags can come in contact with fowl excrement, he said.

Colombo's decision came after India reported that the Manipur government had ordered the culling of thousands of birds.

Sri Lanka has already lifted the ban on imports of birds and chicken flesh from the US and Australia, but not from Britain, he said.

The island nation produces between 11 million and 12 million chickens a year, according to Wanasinghe. Sri Lanka imports poultry mainly for food processing to make sausages that are packaged and sold in supermarkets.

Does N-deal really solve issues?

Instead of coming out clean on the text of the 123 agreement by making it public, both India and the United States in collusion have chosen to keep it under wraps and are selectively issuing rosy statements that all is well and all our concerns have been fully addressed.

While one wishes it is really satisfactory, it is unfortunate that the Cabinet committees, the political parties and the public are deprived of constructive analyses and unbiased expert opinions.

What we are fed up with is one-sided interpretation of the text by the official side though there is promise that the text will be made public soon in consultation with the US.

The article India has same rights as nuclear weapons States based on off the record briefings, which appeared on rediff.com makes one wonder how far the government is attempting to sugarcoat.

Some of the points made in this article do not need the full text to comment.

If the July 18, 2005 joint statement where India was lifted to the moral high ground is kept by the side of the Hyde Act, a legally binding document based on which the 123 Agreement will largely actually be implemented, it is not difficult to see to what extent India has been given the same rights and privileges of a Nuclear Weapons State.

As just one example, while a Nuclear Weapons State can voluntarily place under civilian list any of their nuclear facilities and exclude any facility as military facility and make changes at will, India was made to fight for every facility during the preparation of the separation plan.

Also, the safeguards' implementation as far as Nuclear Weapons States are concerned is hardly intensive and India can never hope to get that sort of parity judging by many of the stipulations in the Hyde Act.

It is to be expected that while negotiating a bilateral agreement there will always be constraints on both sides. However, in this case it is the US, by passing the Hyde Act disregarding the concerns expressed by Prime Minister Manmohan Singh [Images] and his commitments to Parliament has left India to compromise.

More than the substance, the negotiators seem to have concentrated more on fixing the language to make the text look palatable on paper.

So far we have only the negotiators' interpretation of the deal without the access to how the various issues are actually worded. The government seems to be working on garnering support from various quarters to gain psychological advantage before releasing the text.

The reprocessing issue is still confusing.

Contrary to what is being told in the briefings there seems to be conditional clearance with actual bottlenecks still not being fully removed. This is where the text is important to really ascertain whether our interests are fully protected.

It is reported that the Japanese model is followed. If it is so, I can say with my experience it is not too pleasant in practice. They have in the past suffered under the US restrictions.

On the issue of the fate of the cooperation agreement in case of testing, there is no ambiguity as far as Hyde Act is concerned. What seems to have been achieved is language couching, vague complex wordings to circumvent and give an impression of having adequately addressed the issue.

This is nothing but absolute fooling!

When implemented in the present form, there is no doubt that in future any government in power will be constrained to decide in favour of testing having dug deep into foreign investments in nuclear power plants and pressures on the political and economic fronts among others.

The government during the negotiations may be under advice from certain influential quarters that actual testing could be replaced by computer simulation. This is a dangerous prospect indeed! On this issue there seems to be no escaping the Hyde Act and supreme national security concerns.

On the issue of full civilian nuclear cooperation it is amazing to see the new definition given by the spin-masters on both sides. What is simple and straight forward at least in definition is being made to look oversimplified. Part cannot be full as US wants to define.

If recognising our strategic programme, allowing us to import reactors and fuel and have the right to reprocess and enrich uranium and also export heavy water through our own efforts could constitute full civilian cooperation, what is the big deal?

It is being argued that we have the technology in the entire fuel cycle and why do we bother? If it is so, we have the technology for designing, building and operating reactors. Why are we going in for this technology import?

Are we getting over the embargoes on import of equipment and components and any other materials on all parts of the fuel cycle, specifically including enrichment, reprocessing and heavy water, flagged by the Hyde Act or restricted to only those parts of the fuel cycle like reactors which are of commercial interest to suppliers?

There seems to be a calculated move to denigrate critics who really care for long term interests in energy and national security of having defeatist mentality and paranoid about the deal.

They should bear in mind that some critics among former nuclear scientists have spent their professional careers in the nuclear establishment and helped build a strong foundation showing achievements as a consequence of which India has been able to stand up with its head high.

India could not have been discussing this deal without their contribution. They do not have any vested interests nor need for protecting the chair they once occupied. Their only interest is to see that the inherent strength of the country in the nuclear field is suitably harnessed to grow even stronger.

Weakness of Uranium shortage is a known factor and it has been factored into the Indian nuclear programme for more than five decades now. Long term energy independence cannot be driven by externally controlled imports. Thinking ahead and cautioning against hasty actions detrimental to national interests cannot be termed inferiority complex.

A deal, which can truly takes us out of the shell and allow us to interact as a global player on honourable terms, is always welcome. We should not be treated as receivers of technology but we are capable of offering a lot in the nuclear field.

Let us not consider ourselves as weak partners in this game and compromise. We should stand up fight for our rightful place.

DJ Indian Edible Oil Prices Dn As Govt Cuts Import Duties

MUMBAI (Dow Jones)--Indian edible oil prices were down in the week to Friday as the government reduced import duties by 5-10 percentage points to check rising inflation.

Some signs of revival of rains in the country's main oilseed growing central and western regions after a gap of more than 10 days also kept prices down, traders said.

Monday, India reduced the import duty on palm and soy oils by five percentage points and cut the duty on refined sunflower oil by 10 percentage points.

The across-the-board cut in the import duty of all major edible oils was aimed at keeping a check on local prices of these commodities, government officials said.

"The reduction in import duties on all edible oils is meant to ensure adequate supplies ahead of the festival season, but it will only have a temporary impact as supplies will remain tight till the new crop hits the market around October," a Mumbai-based analyst said.

India's oilseed production in the crop year that ends in October is around 23 million metric tons, down 4 million tons on the year.

Latest, weather data, however, showed that rains in the week to Wednesday were estimated 30% below average at 47.7 millimeters.

July is the most important month of the monsoon season in terms of the volume of rain and crop sowing operations.

The Southwest monsoon is crucial for India's oilseed crop as large tracts of agricultural land aren't irrigated.

Friday, local groundnut oil prices were at INR74,500/ton, down from INR75,000/ton a week earlier.

Crude palm oil was at INR42,200/ton, down from INR42,500/ton from the week before.

Refined, bleached and deodorized palm olein was at INR48,000/ton, down from INR49,000/ton a week earlier.

Refined soyoil prices were at INR48,200/ton, down from INR48,500/ton a week earlier.

Crude soyoil prices were higher, at INR46,200/ton from INR46,000/ton a week earlier.

Govt to ease cement import to cut prices

NEW DELHI: Government will ease rules on importing cement to rein in high domestic prices, which have angered both the construction industry and policymakers trying to tame inflation, a senior government official said on Thursday.

Industry Secretary Ajay Dua said the government would relax certification norms to make cements imports easier and help bridge the demand-supply gap. He said prices would fall once imports began to arrive.

"If the economy grows by 9 per cent plus, the growth in demand for cement will be 10 per cent, while supplies from domestic firms have been only increasing by 6-7 percent," Dua told reporters. "We hope to bridge it partially through imports," he told reporters at an industry conference.

In April, India cut duties on cement to increase supplies but shipments from Pakistan could not be distributed as the foreign firms did not meet certification norms issued by the Bureau of Indian Standards (BIS).

Present rules mandate that a cement firm can sell its products only after BIS officials inspect its plants and issue clearance certificates.

Dua said rules would be relaxed and BIS could be allowed to issue foreign manufacturer certificates to overseas cement firms within two months of an application being lodged.

So far Pakistani firms have expressed the most interest in exporting to neighbour India. By June cement prices in India were up by close to 10 per cent from a year ago, as Asia's third largest economy scales up infrastructure to sustain high growth rates.

In 2005/06, cement prices surged by 50 per cent in some regions, far above the rise in input costs.

Monopolies and Restrictive Trade Practices Commission (MRTPC) has ordered notices of inquiry against 14 Indian cement companies including Ambuja Cements, ACC Ltd, Grasim Industries Ltd, UltraTech Cement, Birla Corp Ltd and India Cement Ltd. If the firms are found guilty of cartelisation, Dua said, they could be penalised.

The Cement Manufacturers' Association of India estimated that output grew 9.5 per cent to 155.31 million tonnes during 2006/07. Cement makers have pledged to add 100 million tonnes of additional capacity by 2010 at a cost of Rs 400 billion.