UPDATE 2-UN food aid funds growing, but needs growing too

Reuters: [2008-05-06 23:56:00]

(Recasts, adds additional needs, U.S. funding; adds byline)

By Missy Ryan

WASHINGTON, May 6 (Reuters) - The World Food Program, facing an unprecedented surge in the price of food it buys for the world's hungry, has secured about 60 percent of the extra funds it needs to cover planned aid donations this year, the head of the United Nations agency said on Tuesday.

"We put out an extra appeal for $755 million and we're about 60 percent of the way there," WFP Executive Director Josette Sheeran said during a speech at a Washington think tank.

But the agency said it already has had to cut some of the food rations it provides, and its $755-million gap does not include new, emerging hunger needs that will require an additional $418 million to $430 million this year.

Sheeran, a former Bush administration official, said the world's food delivery system was "groaning under the strain of sky-rocketing demand, the soaring cost of inputs, depleted stocks, crop loss due to drought, floods and severe weather."

Higher global prices for basic foodstuffs such as bread, rice and milk may have brought on a crisis that could be the first truly globalized humanitarian emergency, she said.

World leaders are calling for urgent steps to ease the soaring costs, to create a larger cushion of food across harvests, and to diffuse the food panic that has triggered protests across the developing world.

"It is said that a hungry man is an angry man," Sheeran said. Global food prices jumped an annual 43 percent through March, according to the U.S. government.

The trend is believed to be deepening poverty, especially for food-importing nations like Nicaragua, pushing more people into hunger as buying power shrinks for food aid budgets.

Donor nations like Canada, Australia and Britain have stepped up pledges to help WFP cope with soaring costs. The United States, the world's largest food aid donor and WFP's top supporter, last month released 260,000 tonnes of wheat from an emergency crop trust.

Last week, President George W. Bush announced plans, which must be approved by Congress, to spend an additional $770 million on food aid and agriculture development in the fiscal year beginning Oct. 1.

For countries where people spend up to three-quarters of their income on food, experts say time is of the essence.

The Bush administration already has requested $350 million in last-minute food aid funding for this fiscal year, a perennial addition to annual budgeted funds.

On Tuesday, Democratic leaders in the U.S. House of Representatives announced that they would try to add another $500 million for emergency food aid.

Rep. David Obey of Wisconsin, chairman of the House Appropriations Committee, said the money would be attached to a massive Iraq war funding bill that could be debated on the House floor on Thursday.

It was unclear if Bush would veto the spending bill if it contained too much spending that he did not call for.

The Bush administration also is seeking flexibility to buy more food overseas for aid programs, in hopes of making aid dollars go further. (Additional reporting by Richard Cowan; Editing by David Gregorio)

((missy.ryan@thomsonreuters.com; + 202-898-8376; Reuters Messaging: missy.ryan.reuters.com@reuters.net)) Keywords: USA FOODAID/WFP

COMMODITIES-Oil breaks $122; corn at new record too

Reuters: [2008-05-06 23:29:00]

    By Barani Krishnan 
    NEW YORK, May 6 (Reuters) - The bull run in U.S. energy 
markets showed little signs of slowing on Tuesday, with crude, 
gasoline and heating oil all hitting record highs before ending 
off their peaks, fueling a rally in other commodities too. 
    U.S. corn futures hit new peaks as well, leading wheat to a 
higher close. [GRA/] Precious metals such as gold and silver 
rose but modestly. [GOL/] Copper bucked the trend with a lower 
close after Monday's record high in New York. [MET/L] 
    "I think oil is just pulling everything higher and because 
of that, all these commodities have turned around again," said 
Edward Meir, energy and metals analyst at commodities brokerage 
MF Global in New York. 
    Another positive factor was the dollar's weakening for a 
second straight day after being up in two previous sessions on 
speculation that the U.S. Federal Reserve may be ready to stop 
interest rate cuts which began in September. [USD/] 
    "The dollar was giving the bears some hope last week when 
it rallied. That seems to have stalled and we seem to be back 
to the original kind of trading strategy, which is go short the 
dollar and long the commodities," Meir said. 
    Crude <CLc1> on the New York Mercantile Exchange, or NYMEX, 
settled up $1.87 at $121.84 a barrel after touching a record 
$122.73, extending a rally that has doubled prices over the 
past year. [O/R] 
    Analysts attributed the run-up mainly to Iran's refusal to 
accept inspections of its nuclear program which the West fears 
could be linked to weapons. Iran is also the world's fourth 
largest oil exporter. [ID:nL05474341] 
    Nigerian disruptions from militant attacks and a strike 
have also underpinned prices since late April, along with the 
weaker dollar and growing demand from emerging markets like 
China and India. 
    The mounting supply problems and strong demand prompted 
Goldman Sachs to forecast oil could reach $200 a barrel within 
the next two years.[ID:nL06914488] 
    NYMEX heating oil for June ended up 4.70 cents, or 1.42 
percent, at $3.3535 after an intraday record of $3.3712. 
    RBOB gasoline for June, settled up 5.26 cents, or 1.72 
percent, at $3.1055 on NYMEX, after an all-time high of 
$3.1260. 
    U.S. corn surged 3 percent as the pace of seeding in the 
United States, the world's top producer and exporter of the 
grain used in feed and ethanol, was the slowest in a decade. 
    Spring rains across wide swaths of the Midwest grain belt, 
which is home to the bulk of corn grown in the United States, 
have delayed planting. As a rule of thumb, farmers need to seed 
the crop by May 15 to avoid yield loss. 
    Benchmark corn for May delivery <CK8> on the Chicago Board 
of Trade closed up 12-3/4 cents at $5.94-3/4 per bushel. The 
July <CN9> 2009 contract reached a record high of $6.60-3/4 per 
bushel during Tuesday's session before ending up 10 cents at 
$6.49. 
    CBOT wheat for May <WK8> closed up 13-1/2 cents at $8.06 
per bushel. 
    The Reuters-Jefferies CRB index <.CRB>, which tracks 19 
commodity futures, was up 1.13 percent at 418.54. 
 (Editing by Marguerita Choy) 
 ((barani.krishnan@thomsonreuters.com; +1 646 223 6192; Reuters 
Messaging: barani.krishnan.reuters.com@reuters.net)) 
    For the latest news and prices, click on the codes in 
brackets: 
    CBOT grains and oilseed futures 
    <0#W:> <0#C:> <0#S:> <0#SM:> <0#BO:> 
    COMEX gold futures <0#GC:> 
    COMEX copper futures <0#HG:> 
    CME livestock futures <0#LC:> <0#FC:> 
    CME lumber futures <0#LB:> 
    NYBOT softs, cotton and juice futures 
    <0#KC:> <0#SB:> <0#CC:> <0#CT:> <0#OJ:> 
    NYMEX crude oil <0#CL:> 
    Reuters/Jefferies CRB Index <.CRB> 
    NYBOT RJ/CRB futures <0#CR:> <0#CI:> 
    RELATED NEWS AND OTHER TOPICS All commodities news [C] 
    Energy markets news [O] 
    Precious metals news GOL All metals news [MTL] 
    All agriculture news GRO Grains news [GRA] 
    Livestock news LIV Softs news [SOF] 
    Foreign exchange rates [FX=S] 
    SNAPSHOTS of all commodity reports [SNAP/GOL] [SNAP/COF] 
    [SNAP/COT] 
    SPEED GUIDES COMMODS REUTERS 
Keywords: MARKETS COMMODITIES 
    

NYMEX to raise margins for crude, related futures

Reuters: [2008-05-06 23:25:00]

NEW YORK, May 6 (Reuters) - The New York Mercantile Exchange said on Tuesday it will increase margins for its crude oil and related futures contracts, beginning at the close of business on Wednesday.

Margins for the crude oil, crude oil calendar swap, and crude oil financial futures contracts will go up to $7,250 from $6,500 for clearing members, to $7,975 from $7,150 for members and to $9,788 from $8,775 for customers, NYMEX said in a release.

Margins for the NYMEX miNY crude oil futures contract will rise to $3,625 from $3,250 for clearing members, to $3,988 from $3,575 for members and to $4,894 from $4,388 for customers.

Margins for the NYMEX MACI index futures contract will increase to $1,450 from $1,300 for clearing members, to $1,595 from $1,430 for members and to $1,958 from $1,755 for customers. (Reporting by Gene Ramos; Editing by David Gregorio) ((Email: gene.ramos@thomsonreuters.com; + 1 646 223 6054; Reuters Messaging: gene.ramos.reuters.com@reuters.net)) Keywords: MARKETS NYMEX CRUDE/MARGINS

UPDATE 4-High-flying crude gives boost to Toronto stocks

Reuters: [2008-05-06 23:10:00]

(Adds details, quotes)

By Leah Schnurr

TORONTO, May 6 (Reuters) - Oil and gas companies led the way higher for the Toronto Stock Exchange on Tuesday, helping the main index climb nearly 1 percent as crude oil prices notched another record high.

Suncor Energy <SU.TO> was among the biggest gainers, up C$4.62, or 4 percent, at C$121.12 as the price of oil flew up over $122 a barrel on a weaker U.S. dollar and concerns over supply.

The Toronto market's heavily weighted energy sector jumped 3.3 percent. Canadian Natural Resources <CNQ.TO> was up C$4.05, or 4.6 percent, at C$92.00, and Canadian Oil Sands Trust <COS_u.TO> added C$3.68, or 8.3 percent, to C$48.18.

Crude settled up $1.87 at $121.84 a barrel, easing back from a record $122.73 reached earlier in the day. However, Goldman Sachs forecast oil could hit $200 a barrel within the next two years.

"How high can it go? Who knows," said Andrew Martyn, portfolio manager at Davis-Rea.

The S&P/TSX composite index <.GSPTSE> closed up 139.96 points, or 0.98 percent, at 14,414.30 with half its 10 main sectors higher.

The materials sector, home to resource issues, rallied 1.2 percent, while the base metals mining subindex gained 2.4 percent, pulled up by oil's momentum. Teck Cominco <TCKb.TO> rose C$1.48, or 3.2 percent, to C$48.18.

"The mining sector, the gold sector also got boosted, meaning that the whole commodities game seems to be back for who knows how long," said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

"We keep saying it's a fad, but (the oil price) comes down and starts to move back up," said Nakamoto, noting that ultimately it's underlying supply and demand that will make a price level sustainable.

Methanex <MX.TO> shares jumped C$3.02, or 12.4 percent, to C$27.40 after the methanol supplier upped its quarterly dividend by 11 percent and said it will buy back up to 10 percent of its common stock.

Fertilizer company Potash Corp of Saskatchewan <POT.TO> was up C$3.03, or 1.5 percent, at C$199.39, and competitor Agrium <AGU.TO> rose C$2.52, or 3 percent, to C$86.75.

Sun Life Financial <SLF.TO> weighed on the index after the insurer warned of a difficult year ahead as it reported that credit market troubles and a strong Canadian dollar stung its operating earnings.

Sun Life finished down C$1.76, or 3.6 percent, at C$47.44, while the financial sector overall gave up 0.5 percent.

Also on the downside, BlackBerry maker Research In Motion <RIM.TO> slid C$2.37, or 1.8 percent, to C$132.25.

Market volume was 393 million shares worth C$7.6 billion. Advancers outpaced decliners 890 to 693. The blue chip S&P/TSX 60 index <.TSE60> closed up 8.71 points, or 1.03 percent, at 855.12.

On Wall Street, stocks rallied after U.S. home finance company Fannie Mae <FNM.N> sought to reassure investors over the outlook for the credit and housing markets.

The Dow Jones industrial average <.DJI> rose 51.29 points, or 0.4 percent, to 13,020.83, while the Nasdaq composite index <.IXIC> was up 19.19 points, or 0.78 percent, at 2,483.31. ($1=$1.00 Canadian) (Editing by Rob Wilson) ((leah.schnurr@thomsonreuters.com; +1 416 941 8056; Reuters Messaging: leah.schnurr.reuters.net@reuters.com))

Keywords: MARKETS CANADA STOCKS

Keywords: MARKETS CANADA STOCKS

Border coffee roaster helps keep migrants in Mexico

Reuters: [2008-05-06 23:04:00]

By Tim Gaynor

AGUA PRIETA, Mexico, May 6 (Reuters) - A small coffee roaster on the U.S.-Mexico border is tapping into the growing fair-trade market, convincing Mexican farmers to stay home and grow beans instead of abandoning their crops to migrate north.

When coffee prices crashed in the late 1990s because of an excess in global supplies, many coffee farmers simply left their lands to search for jobs in the United States or in the booming manufacturing sector on the Mexico side of the border.

But with coffee prices recovering in recent years and increased border monitoring making life harder for migrants, some have decided to return to their towns and take advantage of new niche markets for high-quality organic blends.

The Cafe Justo roaster in the border town of Agua Prieta, just south of Douglas, Arizona, is using techniques pioneered by export factories -- or maquiladoras -- to distribute coffee from the southern state of Chiapas to U.S. consumers.

After the coffee crisis, coffee farmers from the village of Salvador Urbina in Chiapas were looking for ways to keep more of the profits whittled away by roasters and retailers.

They formed the Cafe Justo cooperative near the U.S. border in 2002 with the help of a priest and a former factory manager and began to process their own beans, marketing their brand directly to socially conscious consumers.

"We wanted the people who had left because of low coffee prices to go back to their communities," said coffee farmer Daniel Cifuentes, who left Chiapas a decade ago and now runs the Cafe Justo's office in Agua Prieta.

With a $20,000 loan from a local church, Cafe Justo, which means Just Coffee, bought their first coffee roaster and began toasting the shade-grown arabica, marago and robusta beans shipped up from Chiapas on the same bus line that for years had brought migrants north.

Drawing on the expertise of former export-assembly plant manager Tommy Bassett, the cooperative set up a distribution network using UPS <UPS.N> to export coffee to church groups in the United States on demand.

"The only way they will get it as fresh is if they get from the roaster direct," said Rev. Mark Adams, speaking at the project's U.S. office in Douglas.

MORE BUSINESS

The popularity of fair-trade products, which claim to more directly benefit producers, has helped Cafe Justo grow their business five-fold.

In 2003, the cooperative exported the equivalent of 101 96-pound (44-kg) sacks of toasted, ground coffee, generating income $72,000 to help two dozen families in the village near Mexico's southern border with Guatemala.

Five years on, sales have grown to 485 sacks of grounds generating revenues of $367,000 to support 40 families.

With the profits the co-op has built processing facilities and a water purification plant in the village and set up a pension plan and health insurance for members.

Cafe Justo is now working to recreate the successful model by setting up roasting and export operations in the border towns of Tijuana and Ciudad Juarez.

"What the farmers have started creating is the most effective response to the immediate crisis of immigration that I know of," said Adams. "People are going back because there are possibilities," he said. (Editing by Marguerita Choy) ((tim.gaynor@thomsonreuters.com ; +52 81 8345 7553; Reuters Messaging: noel.randewich@thompsonreuters.com@reuters.net)) Keywords: MEXICO COFFEE/