MercoPress. South Atlantic News Agency

South America News

Dairy farmers of the world unite; Mega cruise conglomerate; Looking for investors; Chile and Mercosur; “The Argentine Consensus”; Argentine inflation recedes; Omega 3 fish oil from squid; Chilean red please;Salmon and trout exports drop in value...

Dairy farmers of the world unite

Countries that dominate a significant percentage of the world's dairy production agreed last week in Buenos Aires the creation of a Global Dairy Alliance to combat farm subsidies in developed countries, which have such a harmful impact in the milk industry international trade. With the support of their governments and industries, Argentina, Brazil, Chile, Uruguay, Australia and New Zealand began working in the elaboration of a common strategy to remove world dairy trade conditions that promote subsidies to inefficient milk industries in the European Union, United States and Japan. According to the rich countries group, Organization for Economic Cooperation and Development, in 2001, 39 billion US dollars were paid in support of the milk industry, time and a half the total world trade of dairy products. "They are the champion industry as far as protection by developed countries is concerned", said Osvaldo Capellini president of the Argentine Milk Industry. "This is achieved by tax payers money funnelled to farmers or by higher prices for consumers". The first step in this long term agenda will be to develop a common policy regarding world dairy markets reforms in the framework of the World Trade Organization. This will be considered by the Cairns Group (of non subsidising agriculture countries) in a coming meeting to be held this month in Bolivia. In spite of some differences members of the Global Dairy Alliance have a common dominating vision of the issue. None of its members subsidise dairy farming and therefore will be demanding "a substantial improvement in market access; elimination of export subsidies and a significant reduction in domestic support measures that distort world transactions". "We are confronting common obstacles and we pretend, in a unified way, market access improvements", said Mr. Den Geard from New Zealand's dairy coop Fonterra. And regarding success prospects after so many years of sterile discussions, Brazil's president of the Dairy Committee of the National Agriculture Confederation Rodrigo Alvim was forceful, "Our expectations are founded on the fact we represent 55% of the world's dairy products trade, and that's our strength".

Mega cruise conglomerate

United Status Trade Commission approved last Friday a merger of P&O Prince Cruises with either Carnival Cruises or Royal Caribbean of the US opening the way for the creation of a mega cruise-ship conglomerate. The US decision follows the approval last summer of both deals by the European Commission. P&O shareholders will now be able to choose between Carnival's hostile bid for the company and P&O agreed merger with Royal Caribbean. "We are pleased that the regulatory situation is now clear", said P&O's CEO Peter Ratcliffe, adding that the main concerns about the Carnival proposal have now been removed, so "we can and should begin talking to them". However it was made clear that P&O would move along the alternative proposal to the original hostile takeover, and that is a "dual listed company". This means the two companies would come under a single economic conglomerate but they would continue to trade both in the London and New York stock exchanges. A possible merger with Royal Caribbean would also be under a dual listed company umbrella.

Looking for investors

A Chilean delegation of government officials and private businessmen is currently in Europe with the purpose of promoting foreign investment in Chilean real estate, tourism and infrastructure. The delegation is headed by Chilean Housing and Urbanism Minister Jaime Ravinet, Tourism Office Director Oscar Santelices and leading representatives from the Manufacturing and Promotion Association. The list of projects to be offered mainly in Great Britain and Switzerland includes 3,3 billion US dollars in real estate and tourism and 1,5 billion US dollars in public works concessions. The delegation will also be participating in the Barcelona Real Estate Fair, Meeting Point 2002 which annually attracts over 130,000 people. In London, Minister Ravinet and the head of Foreign Investments Committee, Karen Poniachik will give a conference titled, "Chile, investment opportunities in real estate". "With the coming bicentenary of Chile (2010) we have programmed several emblematic projects in the country's main cities, combining an orderly urbanization with a quality of life development approach, in joint effort with the private sector", pointed out Minister Ravinet in Santiago before leaving for Europe.

Chile and Mercosur

Chilean Deputy Foreign Affairs Minister Critian Barros Belet said Chile wishes a full integration to Mercosur but "our tariff structure is far below that of the block's full members". "For a full incorporation we would have to raise tariffs but this would mean breaking all of our bilateral trade agreements", explained Mr. Barros Belet adding that "our economic policy is targeted towards a gradual reduction of the whole universe of tariffs that should be reaching 6% in 2003, and this does not run parallel with Mercosur". During the latest Mercosur "bilateral consulting mechanism" meeting held in Paraguay last week, Mr. Barros Belet recalled that Chile belongs to all of the block's Committees but one involved in tariffs, "Common Market". "Once the regional crisis is over, it could be a good opportunity to relaunch Mercosur", stressed the Chilean official for whom the coming presidential elections in Brazil, Paraguay and Argentina, "should translate into a great political thrust for the whole area in 2003". Mr. Barros Balet reiterated that Mercosur represents a vital alliance for Chile, not only because of trade, but politically and culturally, and "in spite of the regional situation it's still top priority of our agenda".

"The Argentine Consensus"

In spite of the fact that over 90% of Argentines have no confidence in their democratic institutions or their government, 65% still believe that democracy remains as the best alternative. According to the latest Latinobarometro survey, done by the local Mori polling organization, 88% of Argentines have no confidence in the people running the country; 95% are dissatisfied with political parties and over 90% are also dissatisfied with the other branches of government, Congress and the Judicial system, plus banks and even markets. Marta Lagos from Mori polling remarks that the "absolutely extraordinary" results of the survey indicate that the overall sense of disillusionment among Argentines can be interpreted as the "non existence of institutions in Argentina", or rather that people don't even bother to consider their existence. However this type of consensus, the "Argentine consensus", according to Marta Lagos could also be the indicator of a strong demand for a proper and working system in Argentina, which might well involve further political upheaval until the political system correctly interprets the message.

Salmon and trout exports drop in value

Chilean salmon and trout exports during the first seven months of 2002, compared to the same period in 2001, dropped 20% in value reaching 510 million US dollars according to the local Salmon Industry Association. Shipments on the other hand increased 17% totalling 210,041 tons between January-July. However the release from the Association is optimistic in so far that "there's evidence the industry is starting to recover following the strong drop in value experienced at the beginning of the year". Furthermore in the last two months there's a "steady strengthening of prices, helping to cover the deficit of the first months of the year". Besides, sales in the last twelve months, (August 2001, July 2002), reached 839 million US dollars, indicating a strong recovery, points out the Chilean salmon industry release.

Chilean red please

Chilean wine exports reached 389,5 million US dollars during the first eight months of 2002, a 2,14% increase over the same period in 2001. As far as volume, 227,4 million litres were shipped representing a 15%, according to Chilevid, the country's wineries organization. Bottled wine overseas sales increased 4, 7% from 14,2 to 15,7 million boxes. However the average box price in August dropped one dollar compared to a year ago, from 23, 40 to 22, 23 US dollars. Wholesale wine sales dropped 15, 9% in value, in spite of a considerable 23% increase in volume shipments, 85,7 million litres. During last August the average price for wholesale Chilean wine was 47 US cents.

US unemployment down

Unemployment in the United States dropped slightly during last September, 0, 1%, and now stands at 5,6%, according to the latest US Labour Department report. The unexpected news comes as a separate government survey indicated that 43,000 jobs were lost during September. However the same survey showed that 107,000 new jobs were created during that month. Basically this could mean that the number of new jobs created by the US economy is growing faster that the number of people being fired. Unemployment among Hispanics in September dropped to 7,4% from 7,5% in August, while blacks remained unchanged at 9,6%. The percentage of Americans with jobs increased slightly from 62,8% in August to 63% in September, while the number of people without jobs reached 12,8 million. Regarding workers average pay increase, in September they increased 0,3%, following a flat August. So far this year, during the last twelve months, August-September, average pay increase was 3%, the lowest since March-March 1995/1996. Wall Street analysts believe the mixed labour market reports could very well contain expectations of an easing of monetary policy next November 6th by the Federal Reserve.

Argentine inflation recedes

A stable US dollar and recession contributed to keep inflation down with the consumer price index recording a 1,3% increase in September reports the Argentine Statistics Institute. September is the fifth consecutive month that inflation in Argentina keeps dropping in spite of having accumulated so far 39,7%. However the basket of basics, food, beverage, clothing, in September increased 3,9% with a total increase of 73,5% during the first nine months of 2002. Stable public utilities rates, plus a drop in education and health costs and rents in the private sector helped to keep prices under control. But wholesale prices, although easing, experienced a 2,3% increase, (the lowest so far in 2002), and for the nine months totalled 121%. "If some kind of understanding is reached with the IMF and the US dollar remains stable in the local money markets, Argentine inflation should stabilize at 1 to 1,5% monthly", according to Ricardo Delgado from Ecolatina. This means Argentina will finish the current year with a 45/50% inflation, far above the original government estimate of 15%, but below the over 70% cataclysmic forecasts.

Omega 3 fish oil from squid

A fish plant recently inaugurated in Mar del Plata is processing a daily ton of fish oil rich in Omega 3, a fatty acid considered beneficial for the prevention of heart and circulation related disorders. Vicami S.A. demanded a two million US dollars investment and exports its entire production to the United States and the European Union, according to Carlos Abruza, a chartered engineer and one of three partners of the company. Mr. Carlos Abruza said the main source of production for the fish oil rich in Omega 3 are the eviscerated remains of squid, "since there's a close link between these qualities in plankton and squid". Vicami's technical advisor, Chemist Roberto Martínez Medrano indicated that poly non-saturated fatty acids, better known as Omega 3 apparently are rich in vitamins A and D; help to combat blood pressure, prevent heart conditions, fight anaemia and rachitis, and lessen psoriasis conditions. Mr. Martínez Medrano added that there's ample scientific research with evidence that diets rich in Omega 3 help to reduce the risk of different types of cancer both in men and women. "Vicami is currently selling all of its fish oil wholesale but is preparing for the production of soft gel Omega 3 capsules", indicated Mr. Abruzo. Apparently Vicami Omega 3 concentration averages 40%, above the world market Omega 3 that stands at 30%. "Normally this fish oil is extracted from a derivate of fish meal, while in Vicami we only use fresh and frozen squid eviscerations", underlined Mr. Abruzo.