01/05/2014 World Business Report


01/05/2014

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News. Now for the latest financial news.

:00:00.:00:17.

A new record for the Dow as the Federal Reserve reassures investors.

:00:18.:00:24.

Plus, a sticky dispute over the King of Fruit. Why EU`India trade

:00:25.:00:34.

relations are souring over mangoes. Welcome to World Business Report.

:00:35.:00:41.

I'm Alice Baxter. In a moment, upgrading Brazil's creaking

:00:42.:00:44.

infrastructure. The latest in our week`long series on challenges

:00:45.:00:58.

facing the country's economy. We start on Wall Street, where stocks

:00:59.:01:01.

have hit a new record high. Despite disappointing news on the US

:01:02.:01:04.

economy, and a further cut in stimulus measures by the Federal

:01:05.:01:07.

Reserve. The Dow Jones Industrial Average closed at an all`time high

:01:08.:01:13.

of 16,580.84. That means it has wiped out all the losses from the

:01:14.:01:16.

market turmoil earlier this year, and beaten its previous record set

:01:17.:01:20.

on the last day of 2013. Well, traders actually started the day in

:01:21.:01:23.

the mood to sell after really disappointing economic news. Initial

:01:24.:01:29.

figures showed US growth all but ground to halt between January and

:01:30.:01:32.

March, because of harsh winter weather. The Federal Reserve didn't

:01:33.:01:44.

seem worried though. It cut its economic stimulus programme by

:01:45.:01:46.

another $10 billion, to $45 billion dollars a month. Saying growth "has

:01:47.:01:51.

picked up recently" after the sharp winter slowdown. But it hinted that

:01:52.:01:54.

interest rates will stay low for some time. That sent the dollar

:01:55.:01:57.

falling and US stocks rising. The S 500 index is also just 0.4 per

:01:58.:02:01.

cent from a new record. Let's see how Asian markets are faring. How

:02:02.:02:15.

are they reacting? As you can imagine, the Dow is closing at a

:02:16.:02:23.

record high, it is lifting some of the markets that are open here,

:02:24.:02:27.

particularly Japan's currency, you are seeing that a lot higher

:02:28.:02:29.

following those upbeat statements from the US Federal reserve, about

:02:30.:02:31.

the outlook for the US economy, even though growth numbers were fairly

:02:32.:02:33.

weak, they were backward looking, essentially due to bad weather. Many

:02:34.:02:36.

investors here basically shrugging that. The US remains an important

:02:37.:02:41.

market for many in the economy, any sign of a positive outlook there

:02:42.:02:46.

will always good for a lift to stocks here. Other markets were not

:02:47.:02:51.

as positive, there was data in China which missed forecasts, Labour Day

:02:52.:03:00.

markets are closed in places like China, Hong Kong, South Korea and

:03:01.:03:08.

Taiwan as well. There was not too much reaction to Beijing's

:03:09.:03:13.

manufacturing measure, it came in at 15.4 in April, up slightly from

:03:14.:03:18.

March, but it was below the forecast at 50.5. It had something of a small

:03:19.:03:22.

impact on Australia's mining shares. Many export to China to feed what

:03:23.:03:27.

had been a voracious appetite for resources there. We know that China

:03:28.:03:31.

is beginning to slow as well. Thank you. Now from the stock market to

:03:32.:03:37.

the fruit market ` and a rather sticky dispute. Indian Alphonso

:03:38.:03:46.

mangoes are known as the King of Fruit, but from today they are

:03:47.:03:49.

banned from the EU after authorities in Brussels found some consignments

:03:50.:03:53.

infested with fruit flies. India says it has already addressed the

:03:54.:03:56.

problem, but the row has sent the price of the fruit falling sharply

:03:57.:03:59.

in its home market. The BBC's Simon Atkinson starts his report about

:04:00.:04:06.

100km north`east of Mumbai. Across India, tens of thousands of

:04:07.:04:12.

people do this job. Picking mangoes is tough work. This season is short

:04:13.:04:16.

and there is a few weeks to harvest the fruit, and get it out to the

:04:17.:04:20.

customer. More than half of the worlds mangoes are grown here in

:04:21.:04:24.

India. At the moment, just a small fraction of them are sent overseas

:04:25.:04:27.

for sale. Of those expert markets, Europe is one of the most

:04:28.:04:32.

important. Now, it has a new challenge. Last year, pests like

:04:33.:04:41.

fruit fly is similar to these were found in more than 200 shipments of

:04:42.:04:44.

fruit and vegetables sent to Europe from India. Because of the risk

:04:45.:04:46.

their prose to crops, the European Union has now banned products,

:04:47.:04:53.

including mangoes. For farmers, things are located now, most have

:04:54.:04:57.

contracts for this year, but the surplus fruit is a logistical and

:04:58.:05:01.

financial nightmare for wholesalers like this one. It specialises in

:05:02.:05:04.

Alphonso mangoes, the so`called King of fruit and the type most in demand

:05:05.:05:11.

in Europe. TRANSLATION: We are hoping if we can't export to the EU,

:05:12.:05:15.

we will find another country to buy them, maybe the USA or the Gulf.

:05:16.:05:20.

India is self has a lot of buyers, but because there are many extra

:05:21.:05:23.

mangoes, the price in the markets is falling fast. The EU says less than

:05:24.:05:30.

5% of Indian producers affected by the band. For this British importer,

:05:31.:05:36.

that is little consolation. It relies on these mangoes to sell at a

:05:37.:05:39.

premium so it can get through the quieter months. Australia, New

:05:40.:05:45.

Zealand, Japan, they all allow the import of these products even though

:05:46.:05:48.

they are known to have strict borders for agriculture. They need

:05:49.:05:53.

to come up with treatments, which they will do. They should do that

:05:54.:05:58.

rather than put in place a ban. The EU was in talks with Indian

:05:59.:06:01.

authorities and if it is satisfied the produce is saved, it says the

:06:02.:06:05.

ban will be lifted in plenty of time for the next mango season. With

:06:06.:06:11.

realistic prospects, a more immediate solution, that is a

:06:12.:06:15.

prospect that more mango farmers would rather pick.

:06:16.:06:22.

When Brazil won the right to host the World Cup, promises were made to

:06:23.:06:26.

overhaul its major infrastructure. But seven years on and progress has

:06:27.:06:31.

moved at incredibly slow speed. As part of our week`long series on

:06:32.:06:34.

Brazil's economy, Katy Watson reports from Brazil's biggest port,

:06:35.:06:39.

Santos. This man draws fire was sons of

:06:40.:06:44.

kilometres across Brazil each week to deliver soya beans to Santos.

:06:45.:06:47.

Last year was terrible, there were queues outside of the port that

:06:48.:06:53.

lasted days. This year, it is different. But life can still be

:06:54.:06:58.

tough. `` this man drives thousands of miles. TRANSLATION: There were a

:06:59.:07:03.

lot of trucks on the road that caused huge traffic jams. There are

:07:04.:07:06.

no toilets, places to eat, and robberies on the roads as well.

:07:07.:07:10.

Brazil's infrastructure problems are well known. Not only rose, but

:07:11.:07:17.

airports as well. And harbours. They all need upgrading `` roads. 1.5% of

:07:18.:07:23.

GDP is spent on infrastructure here. The global average is twice

:07:24.:07:28.

that. The past ten years has seen huge economic growth here.

:07:29.:07:30.

Agricultural production has soared and Brazil is one of the biggest

:07:31.:07:36.

exporters of soy, copy, and sugar, which is being loaded on behind me.

:07:37.:07:43.

`` coffee. At the same time, Brazilians are becoming more

:07:44.:07:47.

affluent. This port moved hundred and 50 million tons of goods last

:07:48.:07:51.

year and it wants to double that number in the next decade. They are

:07:52.:07:54.

ambitious numbers but will not be recognised and is infrastructure is

:07:55.:07:59.

Boston improved. Traditionally opposed to infrastructure and

:08:00.:08:02.

investment, Brazil's government has realised that without it, the

:08:03.:08:04.

economy which is slowing, will suffer. `` is quickly improved. It

:08:05.:08:15.

is still early days. The man in charge of Sant says there needs to

:08:16.:08:23.

be new priorities. TRANSLATION: We have space to grow, we have

:08:24.:08:26.

terminals that can still be developed, but we do not have

:08:27.:08:31.

access. We can encourage railway investments. Most transports come by

:08:32.:08:37.

road. Industry experts are not impressed. Delays to promised

:08:38.:08:44.

projects, and huge costs. TRANSLATION: The World Cup was an

:08:45.:08:49.

excuse to do a series of investments in the country. We need investments,

:08:50.:08:54.

independent of the World Cup. It is an event that lasts only a month,

:08:55.:08:59.

there is so much planning that everything is left to the last

:09:00.:09:02.

minute and because of that, we always end up paying far more.

:09:03.:09:09.

Promises to upgrade infrastructure were made when Brazil was growing

:09:10.:09:13.

strong, but now, they are being delivered in a different

:09:14.:09:17.

environment. Work has to continue to keep economic wheels turning.

:09:18.:09:26.

Time for some other news, the boss of General Electric has had talks

:09:27.:09:32.

with the French government about a takeover of engineering firm Alstom

:09:33.:09:37.

have been "productive". Jeff Immelt expressed confidence the deal will

:09:38.:09:40.

go ahead despite a potential rival offer from Germany's Siemens.

:09:41.:09:42.

Earlier on Wednesday Alstom said it would review the offer from GE for

:09:43.:09:46.

its energy business by the end of May but left the door open for a

:09:47.:09:49.

competing bid from Siemens. Shares of Twitter have slumped to their

:09:50.:09:52.

lowest level since the company's Wall Street debut back in November

:09:53.:09:55.

after the company added fewer new users than expected. The stock

:09:56.:09:57.

closed down 8.6% to $38.97. Though still above its initial public

:09:58.:10:00.

offering price of $26, Twitter has lost nearly half its value since its

:10:01.:10:02.

peak in

:10:03.:10:04.

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