Fri, Feb 11, 2011 - Page 10 News List

World Business Quick Take

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AGRICULTURE

Shortfall in wheat expected

Global wheat harvests may trail demand for a second year, spurring hoarding and further price gains, the UN said. “Whenever you get the market as tight as we are now, hoarding becomes widespread,” Abdolreza Abbassian, a senior economist at the UN Food and Agriculture Organization in Rome, said in an interview. Wheat, corn and soybeans soared to the highest levels since 2008 on Wednesday as a US government report showed that smaller crops and rising demand are eroding global inventories. Governments from Beijing to Belgrade are raising imports, limiting exports or releasing supply from stockpiles to curb inflation. Wheat in Chicago, the global benchmark, soared 72 percent over the past year as drought and floods ruined crops. Dry weather threatens production in China, the top producer. Wheat prices may keep rising until the next harvest as importers speed up purchases to cool inflation, Abbassian said.

OIL

Inventories at two-year low

The International Energy Agency (IEA) raised its forecast for global crude oil demand this year for a fifth month, and said inventories in developed economies fell to their lowest level in two years. Worldwide oil consumption will increase by 1.5 million barrels per day this year, or 1.7 percent, to 89.3 million per day, the Paris-based adviser said yesterday in its monthly Oil Market Report. The gain from last month’s estimate, amounting to 140,000 barrels a day, is driven by developing Asian nations and signs of recovery in North America. OPEC , accounting for about 40 percent of global supply, will need to provide 29.9 million per day this year to meet worldwide demand, the IEA said.

BANKING

CSG cuts profit targets

Credit Suisse Group (CSG), Switzerland’s second-largest bank, cut its goal for profitability in response to stricter capital rules and reported fourth-quarter earnings that missed analysts’ estimates. Credit Suisse will now aim for a return on equity of more than 15 percent over three to five years, down from its previous goal of more than 18 percent, the Zurich-based bank said yesterday. Net income amounted to 841 million Swiss francs (US$876 million), less than the SF928 million estimate of 18 analysts surveyed by Bloomberg. The bank, which also lowered its dividend for last year to help meet Basel III and Swiss capital rules, fell as much as 3.2 percent in Zurich trading. Chief executive officer Brady Dougan lowered risk-taking following the financial crisis, making the bank’s performance more reliant on client trading, which slumped in the second half of last year.

GERMANY

German ECB head unlikely

The government is unlikely to propose a new candidate to head the European Central Bank (ECB) after central bank chief Axel Weber apparently threw in the towel, media reports said yesterday. Weber’s decision to pull out of the race, which has not been officially confirmed, but is widely assumed to be the case, would represent an “affront” to Chancellor Angela Merkel, the Financial Times Deutschland newspaper said. Merkel “will not send another German into the arena, because you don’t switch horses in mid-stream,” the Frankfurter Allgemeine Zeitung quoted a source close to the government as saying. Speculation ran rampant on Wednesday after press reports said Weber now planned to move to the biggest private German bank, Deutsche Bank.

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