Business
China’s Policy Worries World Stock Market
World markets lost earlier gains on Friday as investors worried about China’s decision to tighten its monetary policy to cool off growth and eurozone growth figures came in well below expectations.
Some indexes were higher, buoyed by hopes that the ED will provide support to its most heavily indebted member states, but by late morning in European trading that optimism was subdued, pushing the euro to a nine-month low.
Britain’s FTSE 100 benchmark index was down 0.5 percent at 5,135.57 while Germany’s DAX was up 0.2 percent to 5,515.29. France’s CAC-40 slid 0.3 percent to 3,607.69 and Greek and Portuguese stocks also fell. Stocks were mostly higher earlier.
Asia had largely closed higher before China announced its move to limit lending, and Wall Street was expected to fall on the open. Dow industrials futures were down 65 points at 10,045.00 and Standard & Poor’s 500 futures were down 7.6 points at 1,069.80.
In a bid to cool off growth, China raised its reserve rate by half a percentage point, which requires large banks to set aside more cash at the central bank, leaving less money to slosh around the economy.
Because Chinese growth has been one of the main drivers behind the global economy’s recovery from the downturn, the news unsettled investors.
Adding to the sour mood were official figures in Europe showing the 16-country eurozone grew by only 0.1 percent in the fourth quarter, with weak countries like Greece stifling the region’s recovery from recession. Even the currency bloc’s biggest economy and engine of growth, Germany, disappointed expectations as its GDP remained flat on the quarter.
“The slowdown in growth at the end of2009 is a blow,” said Jennifer McKeown, economist at Capital Economics.
She said surveys suggest the eurozone’s recovery will pick up speed again this year, “but with fiscal consolidation threatening to prevent a meaningful pick-up in domestic spending, the downside risks for the region are growing.”
The euro fell sharply after the data, from $1.36 before the figures to as low as $1.3538, the weakest level in nine months. It traded as high as $1.3693 late Thursday in New York. The dollar rose to 89.93 yen from 89.74 yen.
Friday’s news dampened the cautious optimism generated Thursday by ED leaders’ pledge to support Greece in case it has trouble handling its debt. Although some investors were disappointed with a lack of detail and concrete measures, the hope is that a finance ministers’ meeting next week will provide these.
“Yesterday’s announcement feels like only half the job has been completed, leaving the market dangling and hungry for more information,” said Stuart Bennett, analyst at Calyon.
In Asia, where markets mostly closed before China’s rate announcement, Japan’s market, closed Thursday for a public holiday, led gains, with the Nikkei 225 advancing 1.3 percent to 10,092.19.
Trading activity has been subdued the past few days ahead of holidays next week for the Lunar New Year in China, Hong Kong and elsewhere.
The Shanghai Composite index jumped 1.1 percent to 3,018.13. Hong Kong’s Hang Seng reversed early gains to close down 0.1 percent at 20,268.69.
Elsewhere, South Korea’s Kopsi dropped 0.3 percent to 1,593.66 and Australia’s benchmark added 0.2 percent. Markets in Singapore, Thailand, Malaysia and Indonesia also rose while Indian markets were shut for a public holiday.
Business
NASS Engages Agric Minister On Food Crisis
The National Assembly through its joint committee on Agriculture Production Services and Rural Development has engaged the Minister of Agriculture and Food Security, Senator Abubakar Kyari on an urgent solution to food inflation bedeviling the country.
The committee chaired by Senator Saliu Mustapha (APC Kwara Central), at an interface with the Minister, interrogated him on plans being put in place to arrest high cost of food prices in the country and make it affordable and available to the poor masses.
In his response, the Minister said the Federal Government has commenced distribution of 42,000 metric tonnes of grains to some focal points of state capitals nationwide.
“We have received directive and approval from Mr. President to distribute for immediate impact 42,000 metric tons of assorted grains free of charge to the Nigerian population.
“This was received in mid-February, as we are speaking, we have a record of the distribution being carried out, but I will want to plead with the honorable house and distinguished senators that some of the movements can’t be made public but a lot of states have started receiving their grains.
“We are distributing to state capitals in the first instance as you all are aware of the risk involved in the vandalism of foodstuff so we are working with the office of the national security adviser and other national security agencies.
“Furthermore, 58,500 metric tonnes of milled rice from mega rice millers will also be released into the market for stabilisation”, he said.
Speaking with newsmen shortly after the interactive session, Senator Mustapha expressed satisfaction with the steps being taken by the federal government.
He said: “From our interactive session, we are on the other side of the parliament; we are fully in the picture of what is happening, we are convinced that the steps being taken by the federal government are in the right direction.
“All we did again is to further emphasise on the need for certain things to be done on time, I think from this collaborative approach by the grace of God, Nigerians will have a better feel of the government policy on food security”.
Business
Obj Harps On Cheap Credit, Policy Consistency For Food Production
Nigeria’s former President, Olusegun Obasanjo, has called on the government to provide cheap credit and ensure policy consistency to enable farmers increase food production in the country.
The former President made the call as food inflation and nutrition security concerns grow in Africa’s most populous country.
Obasanjo’s made the call at the 9th Agrofood & Plastprintpack conference in Lagos recently, where he said farmers in the country were yearning for consistency in policy and single-digit interest loans to drive growth in the sector and attain food security.
“Policy sustainability and predictability is what farmers want. It helps them to plan. Availability of finance is also what farmers want. They cannot survive on the double digital interest rate”, Obasanjo, who is also a farmer, said at the conference.
According to him, food and nutrition security start with availability, then affordability by ensuring that everyone who needs food can get it.
He noted that food was one of the major imperatives in life, adding that “there cannot be food without agriculture and agribusiness”.
Obasanjo further stressed the importance of agriculture in changing the fortunes of the economy, with attendant exponential gains by way of earnings, employment, food security and other spin-offs.
He noted that agriculture must be made attractive to the country’s teeming youth population, saying this would address the rising unemployment, worsening insecurity and youth migration through the Mediterranean.
“We have to make agriculture attractive to the youths. We have to think within and outside the box to make it attractive to the youths so they are willing to get their hands dirty and feet wet”, he advised.
He continued that “Part of the security issue is owing to our inability to get them engaged. The need for agro-food and agribusiness is for food security, employment, wealth creation and income generation, particularly foreign exchange”.
Speaking also, Wouter Plom, the ambassador of the Kingdom of the Netherlands, said his country had faced challenges similar to those Nigeria confronts – feeding a growing population with limited resources.
He said as partners with a joint vision, the Netherlands and Nigeria recognise that the agricultural sector was one of the prominent drivers for economic growth.
He noted that the Netherlands has further strengthened its partnership with Nigeria to boost the agriculture sector in three main areas- economic growth, improved diets and youth employment.
The ambassador noted that all the challenges in driving growth through the sector, improving diets and tackling unemployment can be addressed when food production is efficient.
Paul Maerz, Managing Director of Fairtrade Messe, said with more investment in agro-food & plastprintpack solutions, products and technologies, brighter days were ahead for Nigeria’s agriculture.
Business
Abuja Farmers, Others Lose N12bn To Ginger Disease
The Federal Government, has confirmed the outbreak of ginger blight epidemic in four States in Nigeria, saying ginger farmers have lost over N12 billion due to the disease.
The government disclosed this at the inauguration of the National Ginger Blight Epidemic Control Taskforce in Abuja, revealing that the fungal disease had inflicted significant damage on ginger farms in Kaduna, Nassarawa Plateau and the Federal Capital Territory.
The Minister of State for Agriculture and Food Security, Aliyu Abdullahi, said the blight had caused billions of naira in losses, impacting not only the livelihoods of farmers, but also Nigeria’s position as the world’s second-largest ginger producer.
“Our preliminary estimates suggested that affected farmers in southern Kaduna lost over N12bn.
“Furthermore, considering that over 85 per cent of Nigeria’s ginger cultivation occurs in this region, we can safely assume a substantial loss of cultivated land, potentially exceeding 70 per cent of total land”, he stated.
Abdullahi, however, stated that the Federal Government through the National Agricultural Development Fund would launch a N1.6bn recovery package for affected farmers in ginger-producing areas.
He said the ginger blight epidemic served as a stark reminder of the importance of preparedness in safeguarding agricultural resources, adding that by investing in research, extension services and farmer support systems, “we can build a more sustainable future for our agricultural sector”.
On his part, the Chairman of the task force committee, Abubakar Abdullahi, said there was no doubt that the blight on ginger had negatively affected the Gross Domestic Product earnings from this subsector.
“It is of necessity and great urgency that various subcommittees are put in place to forestall these negative effects”, he stated.
Abdullahi assured the minister of the commitment of the team to salvage the situation, as he pleaded with the minister to give the committee the power to co-opt members that would add value to the task force to discharge their duties efficiently and effectively.
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