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According to RIA Novosti, the President of Russia, Dmitry Medvedev has approved a plan to boost domestic food production and reduce the country’s dependence on imports. Russia plans to enhance its food production through a new food policy which is expected to produce up to 95 percent of domestic grain needs followed by 80 percent of sugar and vegetable oil, meat and meat products to 85 percent, milk and dairy products to 90 percent and fish products to 80 percent.

During the Soviet era, Russia was a gross grain importer and over the last few years the country has grown as the largest grain exporter. Through the new food policy Russia seemed to have set an achievable target as grain exports to other countries are expected to reach 38mn tons by 2015.

Russia during the World Grain Forum in June, 2009 had initiated a food security tie up with the largest wheat consuming states such as India, China and Turkey to build wheat reserve stocks as well as to cushion future price slides, which has been faced by Russian farmers today. Despite the second-best year for exports and increasing demand from livestock farmers, grain prices still remain low on account of high domestic grain inventory.

Viktor Zubkov, the first Deputy Prime Minister of Russia during the Forum had urged foreign investors to develop the 20mn hectares of unused arable land in Russia. The country’s wheat production has crossed 65mn tons, and has set eyes at producing 100mn tons this year despite sinking wheat prices.

In a last week’s report by RIA Novosti, it stated meat production in Russia was also witnessing significant growth over the past few years. Agriculture Minister Elena Skrynnik while she met Medvedev informed domestic meat production grew 14 percent to 3.3mn tons last year, reducing imports by 20 percent.

Similarly, though Russia is short of poultry production, the recent ban on the US poultry is intended to stimulate domestic poultry production. Russia banned imports of the US chlorine-treated poultry as of 1 January on non-compliance to country’s safety standards, a decision likely to hike domestic poultry prices.

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Several reports suggest the fizzled out redenomination or currency swap enacted by North Korea to contain inflation has literally brought the country to its knees. Last November’s decree which gave citizens one week to surrender/exchange 100,000 old won (North Korean currency) for 1,000 new won sparked off mad rush for essential goods and fast depleted stocks to ignite hyperinflation thenceforth.

The decree stipulated that any cash in excess of a certain limit would become invalid. This in turn forced citizens to convert the old won to goods including electronic items, kitchenware and so on to avoid losing their lifetime earnings. The Tribune News Service reported the price of rice last month in the North rose tenfold at private markets, and residents hoping to purchase food often had to wait in line for hours in subzero temperatures.

The North Koreans largely saved money in the physical form as they mistrusted state-run banks. Song Jung-su, a former railroad security official who defected from the North in 2006 but who is still in touch with his relatives apprised that the wresting of people’s life savings by the totalitarian government had made many to commit suicide.

The currency change is understood to have designed in a bid to check inflation as well as to re-establish Communist Kim Jong-Il regime’s control over the economy that was slipping from its hand for sometime from now to the increasing free market forces. As the direct fallout of the redenomination debacle, the dictatorial government has shown the door to the Workers’ Party finance and planning department chief Pak Nam Gi, the one who spearheaded the currency revamp. It is been rumoured that Pak has been made a whipping boy in an attempt to save the heir apparent to the Kim Il-sung dynasty, Kim Jong-Un, the third son of the current leader.

A diplomatic source is understood to have informed Chosun Ilbo newspaper that if the redenomination had been a success North Korea would have attributed it to the leadership of Jong-Un and used it to justify a third-generation succession. The situation is believed to have made worse by an order which permits shops to be opened only for four hours a day and operated by women above 40, and many have already downed shutters.

The North which is reeling under the pressure of hyperinflation has witnessed sporadic violence where any protest against the state is meted out with death penalties. Such incidences clearly indicate that people do not fear for their lives anymore as many feel they have already lost almost everything. The move which was supposed to curb rising prices backfired as the limited supply of goods in the public distribution system failed to keep up with the demand.

Ever since the formation of the North, it has largely suffered while yielding to be misused by failing states and emerging powers as a deterrent to the constantly intervening Western interests in the regional affairs. The Communist Korea has relied on the overseas essentials aid since the mid-1990s, when the economy crumpled owing to famine and mismanagement, which wiped out 2mn people. The absence of aid from the former and now defunct Soviet Union has also made it worse since then for the Stalinist state.

A state that used most of its revenues to build defense infrastructure is already facing the UN sanctions for its recent nuclear test. Prima facie, its economy looks frail with the country’s latest suicidal redenomination move. It is hoped that both the international community and the North Korean government would come to their senses to save the people of this failing economy.

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Based on the last month’s report on El Nino by the US Climate Prediction Center, the global rice production as well as other food products will be drastically impacted by the ongoing climatic phenomenon. El Nino, characterized by a warming of the equatorial Pacific, brings increased rain to the South American region and drought or reduced rainfall in Asia, hurting crops.

Consequently, several Latin American and Asian countries will be importing more rice to offset the resulting shortage. The South American countries such as Brazil, Venezuela, Columbia and Panama and the Asian countries like India and the Philippines are understood to have increased their import quotas as El Nino effect is likely to last till June.

The US Rice Producers Association President Dwight Roberts told Bloomberg that Brazil may start buying this month, a total of 1mn metric tons throughout the year, direct fallout of El Nino. In another statement, the Agriculture Undersecretary of the Philippines Bernardo Fondevilla said his country, the world’s biggest rice buyer could lose more than 0.8mn tons of paddy rice, from a severe dry spell caused by El Nino triggering renewed rice imports.

Brazil would be importing from Vietnam, the largest rice exporter behind Thailand after the latter fulfills its November and December tenders from the Philippines. As per the Philippines National Food Authority figures, the delivery of four tender amounting to 2.25mn tons mostly from Vietnam would start from January to June.

The Filipino government has set aside about $37mn to mitigate the impact of El Nino on crop and fishery production this year. The phenomenon is expected to devastate 453,204 hectares of rice, 227,843 hectares of corn fields and 14,160 hectares of the fishery industry in the Philippines alone.

Robert on a rice update to Bloomberg informed that Iraq, the fifth largest rice importer, might buy at least 120,000 tons by next week. El Nino effect is likely to peak this month causing speculative buying in the global rice market.

Robert told that the apparent decline in Mercosur production and increased demand in the South American and other Central American countries, supplies will be tight and some markets could pay considerably higher prices for imported rice. The data on rice stockpiles and production trickling in from almost all regions across the globe indicate world rice market is in for severe price rice which in a worst case scenario could even reach the all time high of 2008.

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China’s Administration for Industry and Commerce will soon keep tabs on its online businesses to check fraud and generate revenue through one of the country’s fastest growing industries. A new proposal which is expected to be rolled out by mid-March this year will force entrepreneurs of online stores to register and pay tax.

According to sources, the department responsible for business registration and regulation of China is likely to charge a registration fee between $15 and $30 depending upon the area of business. Similarly, sales tax of 3 percent will be charged on total online sales.

Though Beijing province promulgated similar registration and taxation process back in 2008 none of the online firms got enrolled in the program till date due to non-enforcement of the rule. An official of the Beijing Bureau of Industry and Commerce, Wu Song stated that all internet business entities should be in accordance with any other businesses in the country.

However, there was no confirmation on how the department would tackle those who infringe on the law. It is been assumed that the penalties would range from onsite warning that could damage the reputation of the firm to complete shutting down of the access to the respective perpetrator’s portal.

A recent release by an online marketing research firm, iResearch says that the online revenue generated in the country from advertising, games and shopping totaled about $11bn last year, up by 30 percent. Besides, the company is upbeat on the prospect of online revenue generation to grow by 51 percent to reach $16.5bn this fiscal.

On the flipside, some fear that the new regulation on e-tailers would hamper the industry’s stupendous growth as startup cost and prices of the merchandise on offer would rise significantly. Currently, online stores offer lower prices than the physical ones.

Nevertheless, another school of thought feel the new regulation would substantially reduce online frauds, and would rather streamline the industry. Online stores have negligible or no inventory cost, and therefore, they are able to offer products for lower prices as compared to its brick and mortar counterparts.

The figures from the Beijing Bureau of Industry and Commerce show that around 4,700 complaints on e-tailers were investigated in Beijing alone in 2009, with 1,067 prosecuted. The county which has close to 400mn internet users has today more than 1mn online stores to shop from.

Lately, China has taken several initiatives to regulate internet activities including alleged disinformation campaigns; and the new proposal is largely designed to protect consumer rights. According to China Internet Network Information Center, combined retail sales amounted to only about 2 percent of total retail sales of consumer goods in 2009, and the online retail sales grew 94 percent in the year to total $36.6bn.

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The president of South Africa (SA) Jacob Zuma and the FIFA’s secretary general Jérôme Valcke at separate occasions informed there was no security threat to the forthcoming football (soccer) World Cup (WC) to be held in SA this year in June and July months. Zuma said this at the World Economic Forum (WEF) in Davos while Valcke was responding to the censure by British and German media over granting the WC to an ‘unsafe’ African country.

At WEF, Zuma again downplayed concerns over security, which was sparked off by the recent deadly attack on Togo footballers in Angola. On the other hand, he stressed the mega event offered great business opportunities for investors to showcase their merchandise.

According to the FIFA, 2mn tickets have now been sold, around two-thirds of the total that will be available. The third ticketing sales phase, which will conclude with a random draw for oversubscribed matches on 1 February, saw a total of 1,206,865 applications from 192 countries.

In the wake of the attack on Togo players at the Africa Cup of Nations in Angola, many famous football personalities as well as the English and German media have been making concerted effort to brand SA as an unsafe destination. In response, Valcke on the premise of nowhere is safe in the world, argued “Where can we organize the World Cup? On the moon, where there is no one?”

Franz Beckenbauer, the former West Germany captain and coach who won the WC in both capacities, has said slow ticket sales were due to doubts over the cost and security. Likewise, the manager of Hull City, an English Premier League club, Phil Brown, has said the Angola incident put a “question mark” over the WC.

The FIFA blamed both the media and the football personalities for making potential investors and spectators to panic over the eagerly awaited global event of the year. Valcke urged the media to stop publishing articles such as, the WC is the biggest mistake by holding in SA, don’t fly to SA – it is dangerous and so on.

Zuma as a rebuttal to the criticism said that no security breach has ever happened in previous international sporting tournaments hosted by SA. He expressed confidence by saying that SA was truly ready for business and football fans from across the globe.

The SA president told that what happened in Angola would not happen in SA as the former had just emerged from a war. He informed his country was prepared for the big event with the backing of its police force, army and other security elements.

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Avatar, the most expensive and the largest grosser movie ever made has given a big boost to the New Zealand (NZ) film industry and the economy as a whole. The 3D mega visual has delivered USD$218mn to the NZ economy while it was made in the country as against the politically criticized grant of about $32mn.

Penelope Borland, CEO of the Screen Production and Development Association of NZ (SPADA) said the success of Avatar would resonate around the world and alongside NZ’s huge advances in intellectual property in the film industry. She added Criticism of Avatar’s box office success relative to the NZ Large Budget Screen Production Grant (LBSPG) it received was short sighted.

Since the inception of the LBSPG in 2003, overseas movie and television productions have spent more than $1bn in NZ, which has resulted in grant payments of $134mn. The industry has received total revenues of $384mn from overseas film companies in 2008, and makes NZ number 3 in the world for foreign exchange revenues behind Canada and the UK.

Under the LBSPG scheme, a 15 percent rebate on total qualifying production expenditure is allowed for movies crossing $10.6mn on expenditure in NZ. The Economic Development Minister Gerry Brownlee says “Attracting large budget film productions here offers wider benefits to the economy, including increased opportunities for citizens as well as tourism benefits from having NZ locations shown to an international audience.”

The NZ industry is agog with particularly Avatar’s success as many such projects will now move to the country not only for its locales but also to seek technical talents. NZ’s acclaimed visual effects company Weta Digital (WD) is behind the technology that has created the new generation 3D special effects for the movie which, according to the global film fraternity, is the biggest event in the history of film-making since colour film.

WD is already popular with their works in Hollywood blockbusters such as Lord of the Rings and King Kong. WD’s senior visual effects supervisor Joe Letteri claimed that Avatar was the first major international film came to NZ purely for the technological filmmaking knowledge built up there, rather than primarily because of country’s advantages as a location for shooting.

WD’s general manager Tom Greally said around 60 percent of the $218mn spent on Avatar in NZ would have gone on crew costs, with the rest going towards “technical infrastructure”. While Film NZ acting CEO Sue Thompson said for the Kiwi industry to continue growing it had to keep marketing itself as a destination for high quality filmmaking.

The success of Avatar and several other movies shot in NZ is expected to give a fillip to the country’s tourism industry too as its tourist destinations are showcased to the global audience in a very tempting manner. However, the NZ film industry feels that any attempt to withdraw grants will discourage overseas film projects coming to the country, and may go elsewhere as some countries offer 30 percent grant upfront whereas NZ paid after the project completion.

Brownlee feels “NZ’s connection to the success of Avatar will continue to deliver huge benefits to the country and will help to attract larger budget productions here in the future.” He adds “it is unlikely these productions would have decided to film in NZ if this grant had not been available as most locations offered an incentive to film in their territory or country”.

Recent PriceWaterhouseCoopers research: Economic Impact of the Film and Television Industry (2009) in NZ found that the film and television industry contributes $2.5bn to the New Zealand economy and contributes additional financial benefits to the country by enhancing international awareness and equity in the NZ brand.

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The trade ministers of an alliance of Latin American Countries (ALBA) will meet today to discuss the operational launch of a regional electronic currency. In last April, Venezuelan President Hugo Chavez and the leftist leaders of the region agreed to minimize the US dollar dependence by launching a Latin American currency styled in line with the euro.

Chavez during a political rally on Saturday apprised that the leaders would meet on Monday in Caracas to further shape an extraordinary project” on a currency that will “break the dependency on the dollar, its economic and financial colonialism.

The currency called Sucre was named after Jose Antonio de Sucre who fought for independence from Spain alongside the Venezuelan hero Simon Bolivar in the early 19th century. The currency is expected to initially function as an electronic instrument before it is made to a paper format.

The Sucre is likely to be in circulation as the ECU, which was a forerunner to the euro. Then, the ECU was operational as an account unit managing the stable exchange rates between member states before the national currencies were assimilated to the euro.

Since the signing of MOU on the Latin American currency last year, Chavez has repeatedly urged his member states to cut down foreign reserves in the form of the US dollars. Most South American countries stored their reserves in the US dollars, and for the past several years the socialist states of the region wanted to detach them from the US domination in regional trade. The growing influence of China in the region has also compels the left countries seeking new ways to store cash.

The ALBA comprises of Venezuela, Bolivia, Cuba, Ecuador, Nicaragua, Honduras, Dominica, Saint Vincent and the Grenadines, and Antigua and Barbuda. The ALBA was founded in 2004 by Venezuela and Cuba as a counterweight to the Free Trade Area of the Americas that the US and some Latin American nations were proposing at the time.

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The International Trade Centre (ITC) has launched a comprehensive, interactive trilingual online version of its Cotton Exporter’s Guide as an outreach to improve the skills and abilities of developing countries in cotton trading and marketing. The ITC’s latest press release stated the new online initiative featured an open source content management platform that will enable users to update information on recent trends in cotton trade.

The ITC is the technical cooperation agency of the United Nations Conference on Trade and Development (UNCTAD) and the World Trade Organization (WTO). It largely helps businesses across the world to interpret the WTO rules and also to develop strategies for businesses to enhance trade.

The online guide is a reference source that contains pragmatic and operational information on the international cotton market. The objective is to provide all those engaged in producing and exporting cotton to be knowledgeable about the nuances of the international cotton trade.

Ms. Patricia R. Francis, ITC’s Executive Director said, “Our aim is to reach out to cotton stakeholders around the world and stimulate cotton trade, especially in the poorest African countries.” While Matthias Knappe, ITC’s Program Manager for Cotton, Textiles and Clothing remarked the completion of the online version of the Cotton Exporter’s Guide was an important step in further enhancing its capacity-building activities in cotton trading and marketing.

The development of the Cotton Exporter’s Guide, including its on-line version, was funded by the
Government of Denmark. It is available in English, French and Spanish at these web addresses:
http://www.cottonguide.org/ http://www.guidedecoton.org/ http://www.guiadealgodon.org/

As per the guide, it is targeting all cotton producers, ginners, exporters and traders in cotton producing developing countries, particularly in Africa. It also offers an overview on the world cotton market (production, consumption and trade), analysis of factors influencing supply and demand, market trends and major issues affecting the industry, including trade policy and the WTO issues.

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In the wake of repeated requests from International Confederation of European Beet Growers (CIBE) and other sugar agencies of Europe to export surplus sugar, the EU as a ‘matter of urgency’ is planning to seek legal means to breach the WTO ceiling on sugar exports. A month ago, it was estimated by CIBE that the quantity of sugar available for exports, at the end of 90 percent of the beet harvested was 2.4mn tonnes i.e. 800, 000 tonnes more than the export licenses already authorized.

In 2004, based on a complaint from Australia, Brazil and Thailand, which argued the EU was dumping its excess sugar into the global market, the WTO enforced a ceiling of 1.374mn tonnes on the EU sugar exports. Then, the WTO’s directive was in line with the world sugar prices which was comparatively far lower than the EU prices. Last month, Brussels had rejected beet growers’ demands to allow more of Europe’s sugar surplus onto the global market.

According to Agrimoney, a website that informs on the agriculture markets, Mariann Fischer Boel, the EU agriculture commissioner has received legal advice on whether, “in these exceptional circumstances”, the region can breach its export limit. Ms Boel told a meeting of European farm ministers this week that she was likely to announce a decision on surplus sugar exports by this month end.

As the sugar producers in France and Germany, Europe’s top producers, reaped the biggest harvest since 2006 are reported to be in favour of surplus export. The CIBE in its latest press release stated while the world was crying for sugar, it was inexplicable why the sector was not allowed to obtain licenses to export more sugar now.

The EU sugar growers argue that since the world sugar prices are high the EU sugar injection to world market would not tantamount to dumping. They also feel the availability of sugar to the global market will remove shortage, help farmers an opportunity to earn more and provide consumers to get sugar at a lower cost.

Severe shortage and price spiraling of sugar has already created serious problems to consumers as well as the ruling party in India, the largest sugar consumer. The price of sugar in India has more than doubled in a period of 12 months.

There are clear indicators that in the coming quarters, several countries will line up for more sugar by increasing their import limits. An estimate from Moscow analysis group, Ikar that Russia will raise imports of raw sugar by 66 percent to 2.45 tonnes in 2010, and Pakistan for 50,000 tonnes of white sugar.

World sugar production is short of demand by over 14mn tonnes this year primarily due to vagaries of weather in Brazil and India, the largest sugar producers. Furthermore, the price of refined sugar is expected to reach a 20-year high of 30 cents per pound on the commodity market.

This year, India faced shortage after several years of excess sugar production due to monsoon failure and growers moving on to other crops. On the contrary, Brazil failed to produce enough owing to excess rain and increase in ethanol use.

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The Chinese Premier Wen Jiabao gave assurance to the visiting Indian Commerce and Industry Minister Anand Sharma that his country would do everything to iron out trade imbalances with India. New Delhi had been complaining about the trade deficit for the past few years as its largest trading partner’s exports recorded lopsided growth after years of bilateral trade.

Sharma who was in China to attend the eighth Joint Economic Group dialogue urged the host country to remove tariff and non-tariff barriers on import of Indian rice, fruits and vegetables. He also requested to facilitate landing rights for Indian TV channels in China, and the import of more Indian films.

Sharma informed that New Delhi had doubled its foreign workers visa quota to 40, a decision that likely to help more Chinese firms than any other. However, the number of immigrant workers is still not allowed to exceed more than one percent of the total number of workers employed in any project. While China’s Commerce Minister Chen Demin reciprocated by saying that Indian workers would also get visas on liberal basis.

During the meet, Wen showed keen interest in improving bilateral ties with India and said that only if India and China shared common development platform that they could translate this century into an Asian one. Similarly, Sharma said the time for exclusivity in the international governance structure was over; and both nations would have to be at the front of a new global governance architecture.

After meeting several Chinese leaders, Sharma claimed the meet was very positive and substantive as it covered every component of the bilateral ties. He said that he received assurance from Beijing to encourage the Indian firms in the information technology, pharmaceutical and construction sectors to work with local partners to have ‘more presence and access’ in China.

In 2008–09, China exports to India stood at about $27bn while India’s remained around $11bn. China and India plan to take advantage of its vast consumer base of about 2.5bn people which could be larger than any bloc or region excluded of these two nations.

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