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Headlines: Mercosur rice farmers demand fair markets; World's leading soybean producer; Nuclear surveillance station in Punta Arenas; Lan Chile hikes air fares; Chilean depositors nervous; Inflation drops in Brazil; Lula tightens control on his party; The elusive ”Kraken project;

Mercosur rice farmers demand fair markets

Mercosur rice farmers demanded "energetic and fair" measures from the block and each of the country members to neutralize the negative effects of disloyal world trade practices such as the United States export subsidies and the European Union high tariffs. The official declaration was the closing act of the Third International Rice Conference held in Punta del Este, Uruguay, and in coincidence with Mercosur rice harvest threatened by highly subsidized imports in origin that will melt local prices. "Mercosur rice farmers demand that government authorities from Argentina, Brazil, Paraguay and Uruguay, duly compensate these market distortions following sovereign procedures", reads the declaration. Further on it states that in the event of no actions been taken, Mercosur rice farmers will appeal to national and international tribunals claiming their "legitimate fair employment rights, economic survival and social responsibility towards the millions of people involved in the rice industry and to ensure the future food security of our peoples". The international conference on rice convened farmers' delegations from 25 different countries with 250 presentations in different symposiums. "It was a very honest and frank conference", said Mr. Tabaré Aguerre from the Uruguayan Rice Farmers Association. "Several foreign delegates admitted that their income, particularly in the United States, comes mostly from subsidies rather than market selling prices".

World's leading soybean producer

Mercosur will confirm this season its leading role in world soybean production according to the latest United States Agriculture Department, USDA, estimates. World production 2002/2003 is estimated in 194 million tons, of which Mercosur represents at least 86 million tons, with Argentina contributing 35 million tons and Brazil 51 million tons. United States production, already harvested, reached 74,29 million tons. USDA estimates that Argentina will be exporting 9,7 million tons of soybeans and will be processing another 25,5 million tons of which 18,7 million will be sold overseas as flour and 4,4 million as cooking oil. Regarding purchases in the international market, China is one of the world's main soybean importers and according to USDA will be importing 16 million tons.

Nuclear surveillance station in Punta Arenas

United Nations authorities from the Disarmament Affairs Department, the Chilean Nuclear Energy Agency and scientists from the University of Magallanes will be inaugurating this Monday a nuclear surveillance station in the University campus in Punta Arenas. This will the first and furthest south of seven similar plants to be located in Chile, belonging to a world net of 337 whose main objective is to detect radioactive particles from possible nuclear tests in any part of the globe. The international monitoring system is one of the many decisions adopted by the Comprehensive Nuclear Test-ban Treaty, in the framework of the United Nations and which has been signed by 165 countries. Punta Arenas was chosen because of its privileged location regarding winds that can transport these radioactive particles for thousands of kilometres. Actually if nuclear tests are done in the Muroroa area in the middle of the Pacific Ocean they would be immediately detected by the Punta Arenas ground station. In Chile the co-ordination of the data gathering will be done by the Nuclear Energy Agency that will have permanent satellite communication with the Treaty's main headquarters and assessment station in Vienna, Austria. Rosamel Muñoz, spokesperson for the Chilean Nuclear Energy Agency said that the sophisticated equipment installed in Magallanes University station does not include any radioactive materials.

Lan Chile hikes air fares

Lan Chile is hiking fares between 5 and 10% as of Monday 17 because of higher fuel costs and the appreciation of the US dollar. Paola Contardo, Lan's Regional Manager said that the new fares to Santiago from Punta Arenas will be as follows: Super economic return increases from 99,500 to 105,500 Chilean pesos; Economic return, from 149,000 to 165,500 Chilean pesos; Full flexibility, one way, from 161,500 to 166,500 Chilean pesos, and return jumps from 323,000 to 333,000 Chilean pesos. Programmed flexibility return fare will now cost 233,000 Chilean pesos (206,500), and High Flexibility, 283,500 (253,000) Chilean pesos. Ms. Contardo said that the increase applies to all domestic flights in Chile and remembers that these fares do not include boarding tax that for a return trip to Santiago from Punta Arenas is equivalent to 9,050 Chilean pesos. Special fares for Junior and Senior passengers (students and pensioners) remain with rebates of up to 30% on the cheapest fare (super economic). During last week the US dollar in the free market in Santiago oscillated between 752 and 758 Chilean pesos.

Chilean depositors nervous

A difficult week lies ahead for the Chilean financial and banking system following the robbery from a government agency of the equivalent of 100 million US dollars in bonds similar to those held by pension and mutual funds, which must now remain retained in independent accounts until a final decision is reached. Many small Chilean investors are uneasy about how much of their money was actually deposited in these financial instruments, and financial institutions fear the government may eventually decide some drastic action regarding the stolen bonds that could erode trust in the whole system. Or depositors could end over reacting to a difficult situation when the current government faces a series of setbacks. However over the weekend the president Lagos administration and brokers apparently agreed to let Justice decide who will finally have to absorb the losses from the stolen bonds. Although banks assured clients these bonds will continue to generate interest, towards the end of last week an unusual number of clients began asking questions and others expressed their desire to withdraw their holdings even if this meant potential losses. With a particularly itchy regional neighbourhood in financial matters, it's not good news for the Chilean banking system.

Inflation drops in Brazil

Brazilian inflation dropped to 1,57% last February, signalling that the Luiz Inacio Lula da Silva administration has began to manage some of the most vulnerable variables of the economy. High interest rates helped stabilize the Brazilian currency and therefore wholesale and retail prices, particularly food, a most sensitive issue given the emphasis of the current administration in ensuring the population has access to basic items. Food prices actually rose 1,22% in February after having reached 2,15% in January. Other goods rose 1,68% following January's 2,28%, while fuel increased 3,29% after jumping 8,82% the previous month. However in spite of the good news, current annual inflation is estimated in 12,5%, four points above the government's target, and retail prices in the last twelve months reached 15,85%. Mr. Lula da Silva's administration has indicated it's determined to bring inflation down to 5,5% by 2004. Brazil's economy is expected to expand by 2,8% this year after a dismal 1,5% in 2002. The good news also means the Central Bank will keep the prime rate that now stands at an incredible 26,5%, unchanged. High interest rates are the weakest point of the current policy and have come under strong attack from the business community.

Lula tightens control on his party

Brazil's Workers Party, PT, National Directory approved a resolution that openly supports the current economic policy of the Lula da Silva administration. The 54 to 21 vote, the first taken since Mr. Lula took office last January is binding and forces al party members to support the orthodox policies of the left wing former Marxist oriented union leader government. The resolution comes as a blow to the party's "radicals" who claim the current policies are but a continuation from the previous Fernando Henrique Cardoso administration and are demanding lower interest rates and a more generous budget. "The approval of the resolution by an ample majority indicates that the party's main task is to support the government. Discussing support to President Lula and his administration is out of the question", said Jose Genoino, PT's president. The resolution is crucial for Mr. Lula who has a relative majority in Deputies and is the third force in the Senate. Besides it forces all party members to support any political alliances needed in Congress to approve important reforms in fiscal and social security policies. The National Directory also voted down "radical" proposals to change current orthodox economic policies. "Investors are returning to the country, we've recovered international credibility, and have managed that inflation, the US dollar and country-risk begin falling", stressed Senator Aloisio Mercadante, PT's spokesman in the Brazilian Congress. The resolution supporting economic policy was approved after President Lula da Silva appealed for the party's support to "transform" Brazil.

The elusive "Kraken project"

The international race to catch the first pictures of a live giant squid continues. The Spanish expedition under the name of "Kraken project" has so far spent over two million US dollars in two consecutive campaigns to no avail Nor have any of the other expeditions that have attempted to film the "architeuthis", a BBC team and the National Geographic. The Spanish team commanded by Dr. Angel Guerra from the Royal Spanish Marine Research Institute during the October 2001 and September 2002 incursions used five underwater cameras, two of them completely mobile and an underwater mini-sub capable of working 24 hours in very poor light conditions. The operation took place to the northeast of Gijón in the Cantabric Sea, operating at depths ranging between 400 and 1,000 meters. "Actually we have an advantage over our competitors because 10% of all giant dead squids ever found, trapped in nets, stranded in beaches or in the bellies of predators, it all happened in this area", said Dr. Guerra. The "architeuthis" weights up to a ton, a thousand kilos, and measure twenty meters. Scientists believe it lives between 400 and 1,500 meters deep where the sea pressure is extremely high and almost completely dark. Dr. Guerra said the Institute has plans to try again next September with the research vessel "Investigador", however, "we need sponsors to help support the one million US dollars expedition".