Regoverningmarkets South Asia Newsletter (Vol. 29, No. 44 October 13 – October 19, 2007)

No severe impact on rice prices: traders Wednesday, October 17,2007 NEW AGE

DHAKA: The ban on rice export from India may not make any sharp impact on rice prices in Bangladesh as the domestic stock of rice is good enough and the next harvest is just one and a half months away, said traders at Babubazar, the rice wholesale hub of the capital.

New Delhi on Tuesday banned export of rice except the Basmati variety as it plans increased government purchase of rice to build up a larger stock to rein in any possible price hike feared by many quarters in India.

In reaction, some quarters in Bangladesh have aired the fear that the ban will affect Bangladesh's rice market as it relies heavily on India for supply of coarse rice, especially during the off season.

But, Haji Nijamuddim, general secretary of the Bangladesh Rice Merchants' Association and a trader at Babubazar, told New Age on Thursday, ‘Although the domestic rice prices are high at the moment, I don't think the stoppage of rice import from India would push up the prices sharply in the coming weeks.'

The wholesale prices of major varieties of coarse rice at Babubazar have been almost stable for nearly a month, selling between Tk 21.35 and Tk 22 a kilogram on Friday. Their retail prices in different markets in the capital ranged between Tk 22.5 and Tk 24.

Haji Nijamuddim urged the government to continue with the Open Market Sale and fair price retailing of rice by the Bangladesh Rifles if it wanted to keep prices of coarse rice stable until the next harvest.

The major rice harvest, expected to start at end-November, supplies a few varieties of coarse rice, market sources said.

Munna Mia, a rice wholesaler at Karwanbazar in the city, said, ‘The stocks of paddy with rice millers in the northern districts and the supply to Mokams [major primary wholesale markets at district level] are quite satisfactory.'

‘I don't see any sharp rise in rice prices due to the ban on rice export imposed by the Indian authorities,' he added.

Bangladeshi importers procure Sharna and Ratna varieties of parboiled coarse rice from India and wholesalers say the share of Indian rice in sales in major cities of the country ranges from 10 to 15 per cent during the off season.

World Food Day observed Wednesday, October 17,2007 NEW AGE

DHAKA: Nations across the world obser-ved World Food Day on Tuesday with a goal to institute the right to food for all and eradicate hunger and poverty from the world.

The agriculture ministry arranged a seminar on the theme of the day, ‘The Right to Food', in the BARC auditorium at Farmgate in the capital in the morning.

The food and disaster management adviser, Tapan Chowdhury, attended the seminar as the chief guest and the agriculture adviser, CS Karim, as the special guest. Agriculture secretary M Abdul Aziz chaired the seminar.

The day was observed at a time when around 854 million people across the world were suffering from chronic hunger and the figure had been rising every day, the UN secretary general, Ban Ki-moon, said in a message.

We must recognise the role of human rights in eradicating hunger and poverty, and the connection between development, human rights and security, Ki-moon said.

Enshrined in the Universal Declaration of Human Rights of 1948, the right to food has been strengthened through legislative measures at the international and national levels, he observed.

The president, Iajuddin Ahmed, and the chief adviser, Fakhruddin Ahmed, in messages urged the government and the non-governmental organisations to join their hands to increase the food production in the country to ensure the right to food for its growing population.

Iajuddin in his message said Bangladesh still could not build food security for its people, despite its progress in food production.

Putting importance on strong ‘commitment' and ‘actions' at the national level to ensure the right to food, the president called for concerted efforts to achieve the goal.

The chief adviser in his message referred to the constitutional right of the citizens to get adequate food and said the government was committed to protecting the right.

Rice supply crunch hits Solu Wednesday, October 17,2007 THE KATHMANDU POST

SOLU: As the great Hindu festival of Dashain approaches, people in Solukhumbu district are compelled to buy rice at double price. Nepal Food Corporation (NFC) this year has not supplied rice subsidized by the government, citing different problems.

"We have to pay double price while buying rice on the eve of Dashain," said Tara BK, a local of Salleri-8. She lamented that celebrating Dashain was quite painful for the poor.

District Administration Office (DAO) is being heavily criticized for not taking any initiative to provide the rice in time. Local resident Hitman Lamichhane blamed the DAO for the supply problem and said the administration had to think in time to provide the food grain.

Chief District Officer (CDO) Shreekrishna Shrestha said NFC had not supplied the rice yet. According to him, the NFC head office took time approving the new contract for transporting the rice to the district.

Shrestha informed that some 300 quintals of rice was brought to Okhaldhunga. "But we cannot bring it here before Dashain," he added.

Karna Bahadur Shrestha, chief of NFC Solukhumbu, said that the branch office did not have any food grain now. "We cannot supply the rice before Dashain this year," he added.

Quality loss behind dwindling exports Wednesday, October 17,2007 THE KATHMANDU POST

KATHMANDU: A study has shown that a deterioration in the quality of the yarn of Himalayan goats was one of the main reasons behind the decline in the quality of pashmina and, hence, its export.

The study jointly carried out by the International Trade Center (ITC) and Trade and Export Promotion Centre (TEPC) also found that a decline in the number of Himalayan goats, insufficient post-harvesting infrastructure and inadequate young workers were other major obstacles to raising the export of pashmina.

The report of the study was presented at a program on Priority Nepalese Exports on Monday. According to government data, the export of pashmina made of yarn of the Himalayan goat plummeted by one-fourth in 2006/07 from the all-time high of $82 million registered in 2000/01.

Besides pashmina, the study covered other 13 non-traditional Nepali products that are said to possess a high export value including tea, ginger, large cardamom, natural honey, medicinal plants, selected essential oils, pulses, cut flowers, oranges, handmade paper, pashmina, leather, precious stones, handicraft and jewelry as the most promising exportable products of Nepal.

Farmers demand fertiliser, block road Thursday, October 18,2007 NEW AGE

JHENIAGADH: Several hundred farmers on Wednesday blocked the Jhenaidah-Kushtia Highway, set on fire a police motorbike and damaged three trucks, demanding smooth supply of fertiliser.

At least five policemen, including the Sailkupa police officer-in-charge, were injured in clashes between the farmers and law enforcers at Bhati Bazar of Sailkupa.

Witnesses said several the farmers assembled in front of two dealers' shops at Bhati Bazar at 8:00am as the dealers started distributing 7 to 10 kilograms of fertiliser among each of the farmers through slips.

An elderly farmer, Jamir Uddin, 75, of Dudsar, became agitated as he failed to get any fertiliser. The duty policemen then beat him up with truncheon. He became critically injured.

Enraged with police atrocities, the farmers who failed to get the fertiliser clashed with the law enforcers and pelted them with stones in which five policemen, including the officer-in-charge, Billal Uddin Tarafdar, were injured.

The farmers demanded fertiliser and blocked the Jhenaidah-Kushtia Highway for an hour. Several hundred vehicles remained stranded on both ends of the road.

The farmers at one point set fire to a motorbike, belonging to a policeman, and damaged three trucks.

The joint forces reached the place and tackled the situation at 1:00pm after promising the farmers smooth supply of fertiliser.

The farmers said the principal dealers did not supply the fertiliser and asked the farmers to get fertiliser from sub-dealers, which created the trouble.

Onion sells for Tk 60 a kilogram Thursday, October 18,2007 NEW AGE

DHAKA: Onions on Wednesday were retailed for Tk 60 a kilogram as its supply from India remains suspended.

Traders at Shyambazar said the price increased by Tk 8 a kilogram in three days. They said the price increased as onion import from India has remained suspended for a couple of weeks.

The local variety of onions was retailed between Tk 56 and Tk 60 a kilogram on Wednesday in city markets. Onions imported from Indian were retailed between Tk 46 and Tk 50.

Just before Eid-ul-Fitr, local-variety onions sold for prices between Tk 48 and Tk 52 and the Indian variety between Tk 42 and Tk 44.

According to daily price records of the Trading Corporation of Bangladesh, the retail prices of Indian onions increased by 26 per cent over a month and 207 per cent over the year. Local onions became dearer by 19 per cent over the month and 138 per cent over the year, the records showed.

Former Dhaka Metropolitan Perishable Importers' Association secretary Khandaker Babul on Wednesday said that Indian exporters had said that they would not be able to export onions until the early harvest of the item from Nashik in Maharashtra becomes available on the market.

Nashik is India's major onion-producing region and the early winter harvest from Nashik is expected early November.

‘Although India earlier suspended fresh export of onions for a fortnight from October 1, the Indian exporters are now saying they may not be able to export onions until the Nashik harvest becomes available on the market,' Babul said.

Wholesalers at Shyambazar said a few consignments of Indian onions, ordered before the restriction, were entering Bangladesh, but the volume is too small to meet the domestic demand. ‘Around 50 trucks of Indian onions are now entering Bangladesh every day. During normal supply period, about 200 trucks on an average entered Bangladesh a day,' a trader said.

At least one-third of the shop at Shyambazar ran out of onion stock by Wednesday afternoon, said market sources, and they are now running out of stocks of local onions, which pushed up the prices. Indian onions sold between Tk 38 and Tk 42 a kilogram and the local onions between Tk 46 and Tk 50 on the wholesale market at Shyambazar on Wednesday.

Bangladesh consumes around one million tonnes of onions and supply from Indian meets about a half of the demand, the sources said.

Bangladeshi farmer wins FAO award Thursday, October 18,2007 NEW AGE

DHAKA: Abul Kalam Azad, a Bangladeshi horticulturist, has been among the five ‘model farmers' in the Asia-Pacific region awarded this year for their outstanding achievement in farming.

 The regional office of the Food and Agriculture Organisation of the United Nations has given the awards to encourage farmers of Asia and the Pacific, home to majority of the world's hungry people, in spite of significant progress in poverty alleviation.

 Princess Maha Chakri Sirindhorn presented the five Asian farmers with the FAO awards in a ceremony on the occasion of the 62nd anniversary of the UN body in Bangkok on Wednesday.

 Azad, the secretary to the local farmer's association in the Comilla district headquarters, was honoured as a model horticulturist representing South Asia.

 After he had been discharged from the air force for being proved colour-blind in 1990, Azad chose to become a farmer and started with some fish ponds, and began growing vegetables along the pond banks. Later he also grew rice.

 Azad learnt farming techniques and technologies, experimenting with new vegetable crops, and also a hybrid strain of rice called Hira that doubles the yields, said a release issued by the UN body.

 The organisation believes there is no better solution to securing the right to food for the poor other than by empowering them with the capacity to enhance productivity and to eliminate poverty.

 ‘The rise in inequality, of incomes as well as non-income dimensions such as education and health services, especially in rural areas of Asia, is a major cause for concern,' said He Changchui, the UN body's Asia-Pacific chief.

 The global body maintains that there is a need to address the policy bias against sectors and individuals in which the poor are engaged.

 Four other awarded are Pramuan Charoenying of Thailand for community forestry, Ponifasio Ricky Westerlund of Samoa for home gardening, Nget Sareng of Cambodia for aquaculture and Ochirbat Ganzorig of Mongolia for agribusiness.

Govt pays highest price for B'onions Thursday, October 18,2007 DAILY NEWS

COLOMBO: The Government has decided to purchase a kilo of big onion at Rs.36 per kilo which is the best price recorded for the crop so far. This is despite allegations of inefficiency on purchasing the farmers' harvest. Addressing the media, Trade, Marketing Development, Co-operative and Consumer Affairs Minister Bandula Gunawardena said that the high quality big onion harvest of farmers in Matale, Dambulla and Anuradhapura is being purchased through the two centres in Dambulla and one centre in Anuradhapura at Rs. 36 by the Government.

The production is expected to be distributed with assistance from Cooperative Societies and Sathosa branches at a lower price with the objective of providing greater relief to the consumers.

He said farmers have conducted protests recently urging the Government to offer a good price for their big onion harvest. "It is clear that several parties are using farmers as tools to implement their political agendas," he said.

He said that price of the kilo of big onion was Rs. 70 in March. "We have been able to bring the price down to Rs. 50 after removal of taxes under the Government's price stabilisation programme," he said.

"We are also providing 60 MT of red onions cultivated in Jaffna to the market," he said.

Basmati for Pak, chilgozas for India Friday, October 19,2007 Indian Express

NEW DELHI, OCTOBER 18: As India and Pakistan began expert level talks on conventional and nuclear confidence building measures (CBMs) on Thursday, the two countries are actively moving forward on another CBM - trade across the Line of Control (LoC) in Jammu and Kashmir.

On a visit to India in August, the Pakistani Commerce Secretary had said Pakistan was open to allowing in specific goods across the LoC without imposing any duty. Pakistan's offer, however, came with the expectation that India would treat its products similarly.

While India has decided to scuttle the idea of duty-free imports, both sides have almost finalised the list of goods to be traded across the LoC.

India had proposed 14 items for export, out of which Pakistan has cancelled five - leather and leather products, juices and jams, copper and silver, tinned food and fabricated items like gold ornaments. The items that Islamabad has cleared for import are carpets, furniture, silk, Kashmiri fruits and spices, aromatic plants, dhania, moongi, Basmati rice and Kashmiri saffron. However, some of these are part of their sensitive list under the South Asian Free Trade Agreement (SAFTA).

India, on its part, has accepted six of the 16 items proposed for export by Pakistan. While turning down Islamabad's proposal to export spices, apples, walnuts, rice, paper and carpets, New Delhi is willing to import precious stones, namdas (a type of mattress originally from J&K), furniture, medicinal herbs, embroidered items and chilgozas.

The list of items and modalities of trade were debated by a Committee of Secretaries headed by Cabinet Secretary K M Chandrashekhar. It was decided that border trade duty concessions should exclude items in the sensitive list under SAFTA.

The Department of Revenue and the Department of Agriculture and Cooperation (DAC) are expected to take the ultimate decision on the finalised trade lists and modalities.

They will then inform the Ministry of External Affairs, so that the issue can incorporated in the agenda for the next LoC meeting between the two countries. However, a date for the next LoC meeting is yet to be finalised.

Wheat shortage feared Friday, October 19,2007 DAWN

ISLAMABAD: Wheat shortage is feared next year as experts anticipate up to 25 per cent less water availability between October 1 and April 30 during Rabi season. Gram, lentil, tobacco, barley and mustard, other Rabi crops, may also be affected by water shortage.

Sources told Dawn on Thursday that the Federal Committee on Agriculture (FCA) was expected to finalise next year's crop estimates on October 24. It would, however, find it difficult to fix for next year higher wheat production target than official claims of 23.5 million tonnes output this year.

The sources said the Indus River System Authority (Irsa) had yet to officially communicate estimates of water shortage to the FCA.

The Irsa advisory committee is expected to meet early next week to approve water estimates to enable the FCA to finalise crop estimates.

Irsa's technical committee, in its October 8 meeting, had deliberated upon the availability estimates for Rabi and was informed by the Punjab government that water shortage would be about 25 per cent.

Other stakeholders including Irsa, the Water and Power Development Authority and other provinces are also apprehending water shortage in the range of 20-25 per cent on the basis of historical data on rains and river flows.

"Last year, we carried forward wheat stocks of half a million tonnes and were blessed with about a million tonnes higher than targeted production, but we faced one of the worst flour crises in our history.

The current season has already begun on October 1 with carried forward wheat shortage and anticipated 25 per cent less water availability," said an official who claimed that the government was facing difficulties in finalising next year's crop estimates.

The sources said Kharif crops in Sindh and Punjab had either been already harvested or matured, reducing their indents to about 45,000 cusecs and 30,000 cusecs of water, respectively.

Sindh would now start sowing in the first week of November, followed by Punjab in mid-November and hence current releases to the provinces were taking place smoothly and without any dispute, they added.

Mushroom cultivation popular in CHT Friday, October 19,2007 FINANCIAL EXPRESS

CHITTAGONG: Mushroom cultivation is gradually becoming popular in the Chittagong Hill Tracts (CHT) region. The people of this region are encouraged to cultivate mushrooms as it is possible to earn more profit at a less expenses. The Department of Agriculture is also motivating the people to cultivate mushrooms on a commercial basis, sources said.

People of CHT region have achieved some success in this field and mushroom cultivation has begun there on commercial basis.

A good number of youths, both male and female, has become involved in this profession to get rid of the curse of unemployment.

According to concerned sources, mushroom is an important nutritious food item.

Department of Agriculture arranged a workshop recently at Kaukhali under CHT region to make mushroom cultivation popular in the region.

Agri rehabilitation goes on in north Friday, October 19,2007 NEW AGE

RANGAPUR: Post-flood agri-rehabilitation and other activities including relief distribution are going on in the 10 districts of the country's northern region.

The additional cabinet secretary M Zahid Hossain, who is now on a three-day visit to the flood-hit northern districts, distributed vegetable seeds among 60 flood-affected small and marginal farmers of three union parishads under Gangachara upazila in Rangpur on Wednesday.

He also visited the flood-hit and poverty-prone areas of Rangpur, Kurigram, Lalmonirhat, Nilphamari and Gaibandha on Tuesday and Wednesday and attended several meetings with senior officials.

During the meetings, he directed deputy commissioners and senior government officials concerned to smoothly

conduct VGF, VGD, post- flood relief and rehabilitation activities.

Under the programme, the government allocated Tk 15.89 crore to the Department of Agriculture Extension for the agriculture sector and also provides assistance for the flood-hit small and marginal farmers to recoup losses caused by the recent floods.

The departments concerned have completed assessment of losses in all sectors, including the agro-sector in these districts, officials at the DAE said adding that field-level committees have been formed and the list of the affected farmers prepared under the supervision of army officials.

Each of the affected small and marginal farmers are getting paddy saplings, seeds of various crops like boro,

maize, wheat, mustard and vegetables as well as fertilisers, pesticides and other agro-inputs free of cost for cultivating the crops on 33 decimals

of land.

The DAE and the other departments concerned have already completed distribution of T-aman seedlings among the affected farmers of 10 districts of greater Rangpur, Bogra, Pabna and Rajshahi.

Distribution of seeds and agro-inputs is continuing and all varieties of rabi crops are expected to be cultivated on more land than the fixed targets in every flood-hit district to recover the losses, said Kamal Shariful Alam, DAE deputy director of Rangpur.

Special emphasis had been given to farming other crops, including rabi crops and vegetables, from mid-September and a huge quantity of early variety vegetables had already appeared in the local markets, he added.

He said special steps had been taken to use the government allocation at the field level for the affected farmers by preventing all sorts of corruption and irregularities to make the programme a success.

Similarly, Departments of Fisheries, Livestock and Animal Husbandry, Cottage Industries and Handloom, LGED, Public Health and Engineering Department, and District

Relief and Rehabilitation Departments are conducting post-flood rehabilitation activities in the affected districts, the officials said.

Tea board invests in analytical lab Friday, October 19,2007 Daily Mirror

COLOMBO: The Sri Lanka Tea Board (SLTB) is to open an analytical laboratory worth Rs.70 million to conduct experiments needed for the development of the industry in the country.

"The building has already been constructed and the SLTB hopes to open it before the end of this year" SLTB Director General H.D. Hemarathne told the Daily Financial Times.

As there is only a chemical section in the current tea laboratory, the Tea Board plans to introduce two new sections - the Micro Biological section and the Pesticides section. The new building is within the Tea Board's premises and although the only employees at present are the Officer-in-charge and four chemical officers, the Board intends to provide more employment opportunities once the building is opened.

The analysis of pesticide residue will help prevent the illegal sprinkling of Methyl Salselate, a process used by some tea leaf manufacturers who bring a distraught image to Sri Lankan tea while the Micro Biological section will assist tea producers conduct tests for bacteria and other microbes."The Sri Lankan tea industry should overcome many challenges to increase the popularity of its good name" said Industrial Development Minister Kumara Welgama at the signing of the Memorandum of Understanding (MoU) between the Ministry and the Tea Board on behalf of the obtaining of Pesticide Residue Analysis. Through this MoU the Ministry and the Tea Board intends to remove the bottleneck faced by several tea exporters.

The Tea Board also expects to use new machines and advanced technology to develop the tea industry and they have already purchased machines worth Rs.25 million for the Micro Biological sector. Mr. Hemarathne said that an estimated value of Rs.25 million would be invested to purchase the advanced equipment needed for the Pesticides division as well.

The SLTB has not received any loans from any foreign country or international organization and intends to use a grant (of Rs.18 million) given by the Minister of Industrial Development Kumara Welgama.

Simultaneously the Tea Board will allocate one third of its funds to renovate the tea factories under the Private and Divisional Estate Unit and also plans to replant the estates in the upcountry areas for which funds have been already been allocated.

Floriculturists await better govt policy Friday, October 19,2007 THE HIMALAYAN TIMES

KATHMANDU: Lack of proper government policies and low investment is affecting the development of floriculture in Nepal.

Janga Bahadur Tamang, programme coordinator of Floriculture Association Nepal (FAN) today told The Himalayan Times that the nursery entrepreneurs have not been able to produce enough flower and other decorative plants to meet the national and international demands all because of the lack of proper policies and enough investment by the government in this sector.

During Dipawali only there is an estimated demand of 10 million marigold flower garlands in the Kathmandu valley only and the demand has to be met by importing flowers from India. There is no large-scale production of flowers because there are no large-scale investors. On top of that, since the past few years various diseases are spreading on the flower plants causing much loss, said Tamang.

The situation, however, is gradually improving, Tamang said adding that there were only 80 nurseries in only two districts in 1992 when the FAN was established but in the fiscal year 2004/05 there were 550 nurseries in 34 districts.

"The increasing number of nurseries in the country shows that the nursery-owners are waiting for better government policies so that they can extend their business with larger investment to meet the demand of international market," he said.

The FAN has already drafted a policy document on floriculture and has submitted it to the Ministry of Agriculture and Cooperatives, he said, adding: "Hopefully the government adopts the document from the coming fiscal year."

In the fiscal year 2006/07 there was a transaction of around Rs 240 million in the floriculture industry within the country and that of Rs 360 million in the international market, he said.

Nepal exports cut flowers to India and Japan whereas tissue culture plants and tuberose are exported to European countries too, he informed.

"Nepal's climate and abundant sunlight, cheap labour, appropriate soil and adequate water are the major advantages for floriculture. Nepal has six phyto-geographical provinces and 10 bio-climatic zones, which makes the cultivation of varieties of flowers and plants possible," Tamang added.