27/08/2012 World Business Report

credible. Those are the latest headlines, now

it is time for World Business Report.

Welcome to World Business Report. Global food prices are on the rise

after severe droughts in the US and Russia and a lack of sunshine in

Europe. As the US Republican Party tries to

swing the political debate back to the economy, exactly what are their

economic plans? Officials from the G20 group of

nations will decide this week whether to call an emergency

conference on food prices. The cost of corn, wheat and so we have

soared over the last couple of months -- soy.

In Europe, a lack of sunshine is also producing poor harvests. There

will be significant price rises in the months to come.

At any hint of a dry spell, you up's cereal farmers have been

scrambling to finish the harbour's -- Europe's.

The only relief for many farmers is that they have been able to sell

their grain at a higher price than usual. The price will save the day

for us, no question. The world prices rising almost daily. We are

riding on the back of that. While farmers might be delighted to see

cash being funnelled into their pockets, consumers will not be so

happy. Wheat prices are up, even though the quality of the harvest

is down. To give you a better idea of that, we can look at some of the

grain from last year's harvest. You might be able to see that they are

very fact and swollen. Great for making flower. If you look at some

of the grain from this year's harvest, you can see they're very

thin, not good for making flower. The real worry is the impact that

these prices could have on consumers all over the world. While

some regions of Europe has been getting too much rain, other parts

haven't been getting any. America is under pressure to reduce the

amount of corn that goes into ethanol production. Russia is under

pressure not to impose an export Supertext captions by Red Bee Media

- www.redbeemedia.com.au. Consumers are set to suffer -- ban.

A lot of staples will become a lot more costly. Even if the G20 does

decide to convene an emergency meeting on a food crisis, it's hard

to see what practical measures it could take. Russia, despite its

membership to of the WTO, could decide to store up all its grain

for itself. The Republican National Convention

was supposed to open later today but the arrival of Tropical Storm

Isaac has forced it to be postponed until Tuesday. The event is

supposed to be about nominating Mitt Romney and emphasising his

plans for the economy. As the party heads towards the election, it is

keen to turn the campaign focus back to the economy. What are the

Republicans' economic plans? I am joined by a market strategist. As I

was saying, last week Mitt Romney focused quite strongly on social

issues. This week, whenever the conference gets going, we're

expecting to hear him move on to the safer ground of the economy.

Executive competence has always been the core theme of his campaign.

I think he has had a huge problem getting his message across. Those

people who live away from the coastlines tend to vote Republican.

He has got a captive audience there. Without being offensive in any way,

the intelligentsia tend to be around the coast and they vote

Democrat. There is money in that area. They tend not to be listening

to carefully to what Mitt Romney has to say. I think what is

significant is, not so much the running partner for the Republican

nomination, but the fact that he has got an agenda. We may not like

it, but we are going to have to listen to Mitt Romney. What he's

saying is that the level of debt in the United States is completely

unacceptable. Let's talk about Paul Ryan, his running mate and that

strong statement that Mitt Romney has made by choosing him as his

running partner. They have put themselves forward, haven't they,

as the duo that are making tough economic decisions? There or that

axing public spending and taxation while Obama is apparently not.

is more of an emphasis. What Paul Ryan is saying, as I am

understanding it, is that there is a 16 trillion dollar budget deficit,

which is unacceptable. He insists that over the next four years they

cut it by five trillion dollars, and Obama is saying they will cut

it by four trillion dollars. Obama has already made it very clear that

defence is not high on his agenda, whereas the Republicans basically,

their mantra is that the defence of the United States is the most

important thing in the world, therefore spending on defence will

probably go up. What is likely to happen is that most people think,

and I think it right, that when we have this debate - we have had Ron

Paul, who has been a real irritant to the Grand Old People's Party,

for the fact that he is saying that he insists that the Federal Reserve

tells everyone what is going on. He wants total transparency. They're

all saying "Galway, you are irritating us". He has got his son

there, and his party there -- go away... His message will be heard

and it will make a very interesting debate. I suspect that what will

happen at the end of the day is that President Barack Obama will

probably be re-elected, but the problem is that he has had a rotten

relationship with Congress, which has not done him any favours.

mentioned defence spending - Mitt Romney has pledged to make it one

of the foremost things they do. Absolutely. Many thanks for your

thoughts. Shares of Samsung have taken a

tumble today. They had indeed taken something of

a tumble. They have suffered their biggest fall in a single day after

the US jury found the technology giant to have copied designs from

Apple. That was a decision from last week. The South Korean

company's shares fell as much as 7.5%, the most since October 2008.

The company was ordered to pay just over a billion dollars in damages

to Apple. Samsung says it will appeal that verdict. Fears are that

the case may not rest there. Samsung might be in for potentially

even more losses. Apple has said it will seek an injunction to block

sales of Samsung products in the United States at a court hearing

next month. One of the big concerns for Samsung is whether Apple will

target the Galaxy phone, which was not the case of that trial. This is

Samsung's best selling smartphone. It is included in a US ban of sales,

that will give Apple a key advantage in the market. Today's

sell-off in the market in Korea has wiped off some $12 billion.

Some of the business stories: Fires continue to burn their Venezuela's

because oil refinery after a deadly explosion earlier on Saturday.

Officials from the Venezuelan state oil company said they have that

situation under control now. The number of dead is up to 41. More

than 80 others were injured. A prominent Italian bank has

confirmed it is co-operating with an American investigation into a

possible breach of sanctions. The bank is thought to have brought

sanctions against Iran, according to reports by the Financial

Times.... This news follows similar