Personal finances advices

Africa money legalising rhino horn, ivory trade in focus


* Rhino horn now worth more than gold* Trade may be worth $234 million a year* Asian demand turbo-charged by economic growthBy Ed StoddardJOHANNESBURG, April 26 Almost two rhinos a day are being poached in South Africa for their horns, which are worth more than their weight in gold. This surge in rhino killings has coincided with a rise in elephant poaching for ivory across the continent and reignited debate about whether or not the trade in the commodities these animals are being killed for should be opened up. The questions raised are not just ethical or ecological but also economic, and we are not talking small change. Take rhino horn, which now has a street value of $65,000 a kg, making it more valuable than gold, platinum or cocaine. Used to treat a range of ailments in China and southeast Asia, its demand has rocketed in tandem with the region's blistering economic growth and appetite for other commodities. Trouble is, the sale of rhino horn is strictly banned under the Convention on International Trade in Endangered Species (CITES), the global treaty that governs trade in plants and animals. Almost 450 rhinos were poached in South Africa last year and at current rates, that number could reach 600 or more in 2012.

African rhinos have a pair of horns and in the case of the white rhino, the biggest and by far the most numerous of the two species on the continent, their average combined weight is usually close to 6 kgs, researchers say. The average weight of both horns on the smaller black rhino is about 2.5 kgs but over 90 percent of the poaching incidents involve white rhinos. So over 600 animals could mean 3,600 kgs of horn worth close to $234 million on the street. Advocates of reopening the trade including game farmers and end users make arguments similar to those who support the legalisation of drugs: they say such a move would remove criminals from the equation, allow the business to be regulated, and enable governments to tax it. In the case of rhino horn, the annual figures could far exceed $234 million annually if the animals were farmed for that purpose with their horns, which grow back after being cut off, harvested on a regular basis.

LIKE CATTLE, JUST BIGGER Sound far-fetched? Well, according to government data, in 2010, 4,531 of South Africa's population of 18,780 white rhinos were in private hands on game farms and ranches. In private collections there may be tens or perhaps hundreds of millions of dollars worth of rhino stockpiles. No one knows the precise figure but it almost certainly significant. Rhinos are a key species in game farming, which according to the Financial Mail, is now South Africa's sixth-biggest agricultural sector, employing more than 100,000 people. The argument goes that privately-owned rhinos could be bred and their horns harvested to meet the burgeoning Asian demand.

Horn harvesting could also be done in national and provincial parks with the proceeds put back into conservation. This part of the argument seems compelling when one considers the limited resources South Africa's government has compared to the country's pressing social needs. Spending money on animals may not go down well in poor black townships that still lack power or reliable water supplies. There are also huge stockpiles of ivory from elephant tusks locked in government vaults. The last CITES-sanctioned auction from such stores in 2008 by South Africa, Namibia, Botswana and Zimbabwe were supposed to generate funds for conservation. The bottom line is that in impoverished Africa, home to the last great numbers of what biologists term mega-fauna - meaning really big animals - wildlife must pay for itself. Opponents of opening up trade in rhino horn and ivory, including some conservationalists and animal welfare organisations, argue that wildlife in Africa is already paying for itself as it is the top draw in countries such as Kenya, east Africa's largest economy, which relies heavily on tourism. Tourism took a record 98 billion shillings ($1.19 billion) there in 2011. One concern is that "dirty" ivory or rhino horn will get laundered with the licit stuff - a point underscored by the involvement of organized crime groups in the illegal trade. The initial ban on the ivory trade in 1989 was credited with stemming a slaughter of African elephants at the time. Changing the rules for rhino horn or ivory is not easy and requires a two-thirds majority vote at CITES' Conference of the Party meetings, held every 2 to 3 years. South Africa has already signaled it will not put in a proposal to sell rhino horn at the next one in Thailand in 2013 but is widely expected to do so at a following meeting. One thing is clear: Asian demand for ivory and rhino horn, like its thirst for coal and oil, is only going to grow. Striking a balance and finding a way to meet it, while protecting African wildlife, may be essential.

Bnp paribas affirms commitment to commods trade


* Says plans no further job cuts* BNP Paribas plans new trade finance fundBy Emma FargeGENEVA, March 30 BNP Paribas said it had appointed the new managing director for Switzerland, turning to its global head of commodities trade finance as it expressed its commitment to the sector, which has come under strain from the euro zone crisis. Philippe de Gentile, who will move to Geneva and retain his role as global head of energy and commodity finance, replaces previous managing director Jacques-Olivier Thomann.

"This appointment illustrates the importance that BNP Paribas grants to the commodity trade finance sector, of which it is one of the top global actors," the bank said."Philippe de Gentile benefits from nearly 35 years experience at BNP Paribas in the commodities sector," it added.

BNP Paribas, Europe's trade finance leader in commodities, announced staff reductions in its corporate and investment banking division last year, including 18 jobs in Switzerland. A spokeswoman for the bank added that the consolidation plan was now complete and that no further job cuts were planned.

Trade finance, traditionally a low-risk and low-return business, is under pressure from the Basel regulations on capital adequacy and from a shortage of dollar funding among European banks. Reuters reported on Thursday that Thomann, who also heads the Geneva Trading and Shipping Association, planned to move into an advisory role at the bank's headquarters. Last week, Thomann told Reuters the bank was planning to launch a fund this year to drum up new liquidity for trade finance. In December, French banking rival Credit Agricole bowed out of commodity trading and financing due to strain from the euro zone crisis.

Brazils bndes considers emergency loan to utilities source


Jan 9 Brazil's state development bank BNDES is willing to make an emergency loan to ailing electricity distributors as long as two other state-run lenders join the operation, a senior bank executive told Reuters on Friday. BNDES, Banco do Brasil SA and Caixa Economica Federal SA should each contribute equally to a 2.5 billion real ($948.91 million) loan to help the utilities pay for high power prices, the BNDES executive said on condition of anonymity. The worst drought in 80 years and the government's failure to auction sufficient new generation rights has caused utilities' costs to soar. Without the 17.8 billion reais ($6.76 billion) of emergency credit already arranged for the distributors from private and government banks last year, much of the industry would be bankrupt.

"The bank is willing to participate but if we (state banks)all participate equally," said the executive. Banco do Brasil and Caixa Economica declined to comment. Already unable to pay current costs, Brazil's energy regulator plans to extend the deadline for utilities to pay for November and December power purchases until the end of January, giving more time to arrange an emergency loan.

Although the loan would not come directly from the government coffers it highlights the pressure President Dilma Rousseff is under to help an industry that is facing its biggest crisis in over a decade. New Finance Minister Joaquim Levy has said the government will no longer compromise its finances to aid distributors. He said costs should be shared with consumers.

Low water levels throughout 2014 have undermined a system that gets more than two-thirds of its electricity from hydropower. This has driven up the cost of alternative power, and squeezed distributors' cash flow. They can only pass higher costs onto consumers once-a-year after rate reviews by a government wary of boosting inflation. In Brazil's southeast and central west, a region responsible for 70 percent of the country's hydroelectric generation and the bulk of its use, water levels are at less than 20 percent of maximum, the lowest level for January in at least 15 years and below levels that led to rationing in 2002. Brazilian electrical-utility shares fell nearly 5 percent in Sao Paulo on Friday on the Sao Paulo BM&FBovespa stock exchange. Shares of Cia Energetica de Sao Paulo dropped 1.36 percent to 22.54 reais and Cia Energetica de Minas Gerais SA slid 4 percent to 11.76 reais.