SC dismisses Novartis petition for Glivec patent

(Reuters) – The Supreme Court has dismissed Swiss drugmaker Novartis AG’s(NOVN.VX) petition seeking patent protection for its cancer drug Glivec, a serious blow to Western pharmaceutical firms which are increasingly focusing on India to drive sales.

In a landmark judgment that has the potential to change the direction of India’s pharmaceutical business, the apex court said on Monday that the drug failed to qualify for a patent according to Indian law.

Novartis has been fighting since 2006 to win an Indian patent for an amended form of Glivec. In 2009 it took its challenge against a law that bans patents on newer but not radically different forms of known drugs to the Supreme Court.

Pakistan sees Afghanistan’s Karzai as obstacle to peace with Taliban

(Reuters) – Pakistan, seen as critical to efforts to stabilise Afghanistan, is finding it difficult to work with President Hamid Karzai due to mistrust and is reaching out to others to advance the peace process, senior Pakistani Foreign Ministry officials say.

Pakistan is uniquely positioned to promote reconciliation in neighbouring Afghanistan because of its long history of ties to militant groups fighting to topple Karzai.

But Afghanistan has accused Pakistan of backing the Taliban to further its aims, fearful it will try to install a pro-Islamabad government in Kabul, a charge Pakistan denies.

“Right now, Karzai is the biggest impediment to the peace process,” a top Pakistani Foreign Ministry official told Reuters. “In trying to look like a saviour, he is taking Afghanistan straight to hell.”

Karzai has said he wants peace on his own terms and could also be worried that the United States might cut a quick and risky deal with the Taliban, eager to get the bulk of its forces out of the country by the end of next year.

Either way, Pakistani officials say they are discouraged by what they call Karzai’s erratic statements and provocations, apparently designed to make him appear more decisive at home in dealing with the unpopular war, now in its 12th year.

Failure to reach an agreement between the Afghan government and insurgents would increase the chances of prolonged instability and even a push by the Taliban to seize power. The last time they did it, in 1996, it was with Pakistani help.

The stakes are also high for Pakistan, a strategic U.S. ally seen as vital to Washington’s global war on militancy. It fears turmoil in Afghanistan could spill over the border and energise homegrown militants seeking to topple the government.

“I have absolutely no doubt that there will be complete chaos in Afghanistan if a settlement is not reached by 2014,” said the Foreign Ministry official. “Afghanistan will erupt. And when that happens, Pakistan will have to pay.”

Pakistan and Afghanistan have long been suspicious of each other. A recent period of warmer relations raised hopes they could work together to lure the Taliban to negotiations.

Aziz Khan, a former Pakistan ambassador to Afghanistan, said it was not right to pin all the blame on Karzai.

“Everyone is hedging their bets at this point: the Pakistanis, the U.S., the Afghan government and the Taliban,” he said. “No one has been clear about what they want in Afghanistan.”

Although Pakistan will maintain contacts with Karzai, it is stepping up engagements with opposition figures, the Taliban, Washington and other parties to promote reconciliation, Foreign Ministry officials said.

“There is no other option but reconciliation – with or without Karzai,” said the top Foreign Ministry official. “If he continues to be this stubborn, him and his High Peace Council will naturally be sidelined.”

AFGHANS SAY KARZAI COMMITTED TO PEACE

A second senior Pakistani Foreign Ministry official cited several examples of how Karzai has blocked peace efforts. At a conference in January, for example, Karzai insisted there would be no more “back door” peace contacts.

The official also accused Karzai of delaying the opening of a Taliban office in Qatar that could be used in the reconciliation efforts. He did not say why.

Afghan officials say Karzai is fully committed to the peace process, but wants to ensure it is Afghan-driven.

Responding to the accusation that Karzai is an obstacle to peace, an Afghan government official said: “We totally reject this. It is a baseless allegation.”

Analysts say Pakistan has a long-standing fear of an Afghan government close to its old foe, India. Karzai has said “no foreign elements or entities should attempt to own Afghan peace efforts”. He also warned: “I am not going to allow other attempts to succeed.”

So far, Karzai has failed to secure direct talks with the Taliban. He has repeatedly asked for Pakistan’s support. Pakistan has helped Taliban representatives to travel to Qatar to make contacts with U.S. officials.

At the same time, Pakistan has been building bridges with the Northern Alliance, a constellation of anti-Taliban figures who have traditionally been implacable critics of Islamabad, and close to India.

But Kabul wants Pakistan to hand over top Afghan Taliban leaders which could prove useful in the peace process.

“All Taliban leadership are sitting in Pakistan. We need full cooperation of Pakistan in order for them to be allowed to travel and be allowed to talk,” Afghan Foreign Minister Zalmay Rassoul told a news conference in Sydney.

Karzai’s remarks during interviews and in meetings with Pakistani officials have led Islamabad to conclude he has become too inflexible. They cite Karzai’s recent accusation that the United States was colluding with the Taliban.

“What does Karzai have to show for his effort to bring insurgents to the table? We’ve released prisoners. We’ve facilitated talks,” said another senior Foreign Ministry official.

Late last year, Pakistan released more than two dozen Taliban prisoners who could help promote peace. It was the clearest signal ever that Pakistan had put its weight behind the Afghan reconciliation process.

Pakistan’s army chief has also made reconciling warring Afghan factions a priority, military sources say.

After the prisoner releases, Afghan officials said Pakistan shared Kabul’s goal of transforming the insurgency into a political movement. Such remarks signalled unprecedented optimism from Kabul.

“JOKER IN THE PACK”

But despite that, old suspicions that Pakistan uses Afghan insurgents as proxies to counter the influence of India have not been laid to rest.

Some Afghan officials believe Pakistan may still be hedging its bets and that even the prisoner releases were just a way to retain influence over the Taliban.

“The key fact here is that Pakistan has been investing in this dirty game of trying to control Afghanistan for the last thirty years through terrorist proxies,” said a senior Afghan government official.

“It is now trying to reap the harvest of its investments by waiting for what they see as the inevitable complete departure of the international community from Afghanistan and keeping their proxy assets, primarily the Taliban, for the post-2014 period.”

During talks last month at British Prime Minister David Cameron’s official country residence, Chequers, Karzai and Pakistani President Asif Ali Zardari agreed to consult on future Afghan Taliban prisoner releases.

But Pakistani officials now complain that Karzai does not appreciate the goodwill gestures.

Another Pakistani Foreign Ministry official said the government was incensed by an interview Karzai gave to the British press after the Chequers meeting in which he said the peace process was being impeded by “external forces acting in the name of the Taliban”, a veiled reference to Islamabad.

So exasperated was Pakistan with Karzai that at a meeting this month between Zardari, the army chief and senior officials, one top leader described Karzai as “the joker in the pack”, according to an official who attended.

Fishermen killing: Italian marines to return to India

(Reuters) – Two Italian marines accused of killing two Indian fishermen while on anti-piracy duty will return to India on Friday, the Italian government said, reversing a previous decision not to send them back to face trial after a home visit.

“The Italian government requested and received written assurances from the Indian authorities regarding the treatment of the marines and the protection of their fundamental rights,” the government said in a statement.

The Italian Foreign Ministry sparked fury in India earlier in March when they said the marines, Salvatore Girone and Massimiliano Latorre, would not return to India after being granted home leave to let them vote in last month’s election.

The Supreme Court subsequently ordered the Italian ambassador not to leave the country, escalating the stand-off and spurring European Union foreign policy chief Catherine Ashton to warn that India was violating international law.

The marines, part of a military security team protecting the tanker Enrica Lexie from piracy, are accused of shooting dead two fishermen in February 2012, apparently after mistaking them for pirates in waters off Kerala.

Girone and Latorre said they fired warning shots only.

They were detained in India to face trial, but the Supreme Court allowed them to go home for four weeks to vote in a parliamentary election on February 24-25, provided they returned to India by Friday.

Italian President Giorgio Napolitano called Latorre to tell him and Girone that he “appreciated the sense of responsibility demonstrated in their acceptance of the government’s decision”, according to a statement.

Napolitano assured the two marines that the Italian state would be “by their side in the path that awaits them” and that he hoped for “a correct recognition of their point of view”.

Tide turns against Watson in Australia’s ‘homework-gate’

(Reuters) – After 24 hours of the most withering abuse directed at Australia’s management for excluding Shane Watson and three other cricketers from the test team, the tide turned on Wednesday with a flurry of support for the “line in the sand”.

Australian cricket was plunged into crisis on Tuesday after Watson, James Pattinson, Mitchell Johnson and Usman Khawaja were banished from the team for the third test in India for failing to provide their thoughts on how Australia could improve.

Former test greats lined up to pour incredulous scorn on coach Arthur and captain Michael Clarke for taking such strong action for an offence likened by many commentators to a schoolboy forgetting to do their homework.

Watson, the most senior of the players and the team’s vice captain, arrived back in Australia to be with his pregnant wife late on Tuesday and dubbed the punishment “extremely severe”.

The 31-year-old sometime allrounder’s assertion that he still wanted to play test cricket for his country was reassuring with back-to-back Ashes series coming at the end of year.

After the recent retirements of former skipper Ricky Ponting and Mike Hussey, the prospect of losing a third top batsman, albeit one as injury-prone as Watson, for such a trivial offence was startling to many.

Word from team management on the sub-continent that the punishment was not isolated but the culmination of a build-up of minor disciplinary issues helped start the turning of the tide.

DEFINING MOMENT?

Arthur, in his blog on the Cricket Australia website, said his team had given a fair amount of “laxity and flexibility” to the players because of their youth and inexperience.

“This decision was about sending a strong message that it is about time all players had some accountability for their actions,” he wrote.

“Being late for a meeting, high skinfolds, wearing the wrong attire, back-chat or giving attitude are just some examples of these behavioural issues that have been addressed discretely but continue to happen.

“If we’re deadly serious about getting back to number one in the world, all players need to raise the bar and lift their game.

“This is a line in the sand moment,” he added. “A point we’ll look back on in a couple of years’ time when we’re back to number one in the world and say was a defining moment.”

Well-respected cricket journalist and author Gideon Haigh had already laid out his views in a column entitled “Coddled boys who expect it all laid on”, in which he said it was no surprise that Watson had been one of those punished.

“Probably more coaching and management resources have been poured into him than any cricketer of his generation – for the dividend of two centuries in 40 tests,” he wrote in the Australian.

“He is a handsome player of abundant talent. He is also wealthy, pampered, immature and self-involved. That’s what a life in modern professional sport can make of you.”

Richard Hinds in the Age said the failure of the quartet to perform the simple task of offering, via e-mail, their opinion on team improvements would invite questions as to whether they would follow more important instructions.

“If it has a positive impact on long-term performance, this might be considered a vital moment for a team in transition,” he wrote.

“One that has struggled to adapt to an age when a team is a collection of similarly gifted individuals with often different outlooks.

“Not the joined-at-the-hip band of mates who wouldn’t dare shave a hair off a moustache for fear of being considered a freak or a lone wolf.”

Clarke has shown a marked ruthless streak in his bid to take Australia back to the top of the world rankings since assuming the captaincy in the wake of the 2010-11 Ashes drubbing.

Far from being forced into a conciliatory position by the abuse he has suffered over the last two days, the 31-year-old was strident in his view that punishing the four players was the correct decision.

“This game owes us, the players, nothing. We owe it everything,” he wrote in his column in Sydney’s Daily Telegraph.

Delhi rape accused Ram Singh found dead in Tihar jail

(Reuters) – The man police say was the ringleader in a gang rape on a New Delhi bus in December that outraged India hanged himself in his cell on Monday, prison authorities said, raising questions about jail monitoring and security.

Ram Singh made a noose from the mat he slept on and hanged himself just before dawn from a grille in the ceiling of the cell he shared with three others, prison spokesman Sunil Gupta said.

While there were CCTV cameras throughout Tihar, India’s highest-security prison, there were none in individual cells, Gupta said. Singh had been placed in the “ordinary security” category, so did not receive any special surveillance, he said.

Gupta could not say how long it would have taken Singh to make the noose or how he had managed to loop it through the grille, which was eight feet (2.3 metres) above the floor. He may have stood on a plastic bucket, some Indian media reported.

Singh’s lawyer, V.K. Anand, said his client had been composed and calm when he spoke to him in court on Friday and “didn’t have any complaints”. Singh, who faced the death penalty if convicted of murder, had not been on suicide watch, Anand and Gupta said.

“I know he had a few complaints of jail authorities torturing him, but nothing that would make him take his own life. We can’t rule out foul play,” Anand said.

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Delhi rape accused Ram Singh made our lives hell, neighbours say reut.rs/ZfzGjx

Slideshow: Main accused Ram Singh dead reut.rs/ZDNkg4

Women’s activists shocked as man accused of India gang rape found dead reut.rs/WE5Nww

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Anand had previously denied that his client was being maltreated in prison. He would not elaborate on the “torture”.

Home Minister Sushil Kumar Shinde called the incident a “major lapse” in security and said an inquiry had been launched.

Singh and five others, including a juvenile, were put on trial for the December 16 attack on the 23-year-old trainee physiotherapist. The assault triggered nationwide protests, a toughening of rape laws and an intense debate about rampant crime against women in India.

All six accused have pleaded not guilty to rape and murder, although police say they admitted involvement in the attack in statements taken after their arrest.

Singh’s father said he did not believe his son had committed suicide and suspected that he had been murdered in his cell.

“He confessed about his mistake, then why would he commit suicide? He was prepared for any punishment the government would have given him,” Mange Lal Singh said.

BLOODSTAINED SCHOOL BUS

The trial of the five adult men started last month while the juvenile’s trial began last week. Ram Singh’s brother Mukesh Singh, gym assistant Vinay Sharma, bus cleaner Akshay Kumar Singh and fruit vendor Pawan Kumar are the other men on trial.

Police say the six attacked the woman and a male companion on the bus as the couple returned home after watching a movie. The woman was repeatedly raped and tortured with a metal bar. They were also severely beaten before being thrown onto a road.

The woman died of internal injuries in a Singapore hospital two weeks later.

Legal experts said Singh’s death did not undermine the prosecution’s case, which was largely based on DNA evidence and the testimony of the rape victim before she died and her friend.

“There will be no impact on the trial. This is a case of gang rape where all are held equally responsible, you can’t say one is more to blame than the other,” said Rebecca Mammen John, a Supreme Court lawyer who has worked on many rape cases.

The police report draws a picture of Ram Singh as the ringleader. On the night of December 16, the men gathered at Singh’s house for dinner, where he came up with the plan of taking the bus out to look for a victim to rape, the report said.

The police say they found him sitting in the blood-stained school bus, wearing a bloodied T-shirt, the morning after the crime. A DNA test revealed that the blood belonged to the rape victim, the report said.

The victim’s brother said he was “not very thrilled with the news that he killed himself because I wanted him to be hanged … publicly.

“Him dying on his own terms seems unfair. But, oh well, one is down. Hopefully the rest will wait for their death sentence.”

Delhi rape accused driver Ram Singh hangs himself

(Reuters) – The driver of the bus in which a young woman was gang-raped and fatally injured three months ago hanged himself in New Delhi’s Tihar jail on Monday, police said.

Ram Singh was the main accused of five men and a juvenile put on trial for the attack on the 23-year-old trainee physiotherapist in the Indian capital. The assault triggered nationwide protests and an intense debate about rampant crime against women in India.

A senior police official said Singh had committed suicide in his cell early on Monday. “It is true, he’s dead,” said the official, who spoke on condition of anonymity.

The CNN-IBN news channel said Singh hanged himself with his own clothes.

Tihar jail is India’s highest security prison and officials there are likely to face tough questions about how such an incident could have occurred.

“He knew he was going to die anyway because we had and still have such a strong case against him,” the physiotherapist’s 20-year-old brother told Reuters.

“I’m not very thrilled with the news that he killed himself because I wanted him to be hanged … publicly. Him dying on his own terms seems unfair. But, oh well, one is down. Hopefully the rest will wait for their death sentence.”

The trial of the five adult men began in a special fast-track court last month while the juvenile’s trial began last week. Ram Singh’s brother Mukesh Singh, gym assistant Vinay Sharma, bus cleaner Akshay Kumar Singh and fruit vendor Pawan Kumar are the other men on trial.

The five men have pleaded not guilty to rape and murder.

Police allege the six attacked the woman and her male companion on the bus as the couple returned home after watching a movie on December 16. The woman was repeatedly raped and tortured with a metal bar. The couple were also severely beaten before being thrown onto a road.

The woman died of internal injuries in a Singapore hospital two weeks later.

Singh was a bus driver, despite an accident in 2009 that fractured his right arm so badly that doctors had to insert a rod to support it. He appeared on a reality television show in a compensation dispute with a bus owner, who in turn accused Singh of “drunken, negligent and rash driving”.

In the show, the moustachioed, slightly-built man was seen walking stiffly and holding his right arm at an awkward angle.

Singh’s neighbours in the south Delhi slum where he lived described him as a heavy drinker with a temper. One young woman said he used to get embroiled in violent rows and a relative recalled a physical altercation with her husband.

India trumps Pakistan’s Iran rice trade boom with oil rupees

(Reuters) – Iran’s oil export revenues are helping Indian rice exporters to claw back some of the lucrative business lost to cross-border truckers in Pakistan as a result of Western sanctions.

Indian rice exports direct to Iran have bounced back, thanks to shippers being paid up front in rupees from a huge pool of oil money owed to Iran by Indian refiners.

“Now business is being done directly because Iran is allowed to open letters of credit in Indian rupees because the government has to pay money to Iran for the oil,” said Suresh Manchanda, marketing director of a Delhi-based company which exports rice, wheat and sugar globally.

“For the importers back in Iran, Indian rupees are easily available to them via the government, so they can do business in a much easier way than doing business in any other currency,” Manchanda told Reuters at the Gulf Food trade show in Dubai.

“For all practical purposes the money never leaves anywhere, the money is already in India.”

India is Tehran’s biggest rice supplier but shipments were held up in early 2012 after Iranian buyers defaulted on payments. Many Indian suppliers then stopped sales on credit.

Tightened sanctions on shipping and bank transfers between Iran and India started a boom in Pakistani rice trucked across the remote border into Iran by groups based in Quetta, grains traders from Pakistan and India said at the world’s biggest food show last week.

Problems getting paid by private Iranian buyers hit by a slide in the value of the rial also saw the rice flow from India being routed through Dubai, with wholesalers there taking on the payment risk in return for a mark-up.

Before Western sanctions aimed at stopping Tehran’s disputed nuclear programme began to bite, Indian official data show rice sales to the Islamic Republic were surging.

They more than doubled in the financial year of 2009-2010 and also rose in value by nearly 35 percent to over $600 million from April 2011 to the end of March 2012, but this was a period when India’s overall rice export earnings almost doubled in value globally.

Dubai’s role in the India-Iran rice trade has withered since oil pool payments started.

From April 2011 to the end of March 2012, $821 million of Indian rice was shipped to the United Arab Emirates, more than anywhere else. But in just nine months from April to December last year Iran imported over $725 million of Indian rice, up 20 percent on the previous 12 months, while Indian exports to the UAE slumped to $287 million, official figures show.

There is effectively no limit to how much Indian rice exports to Iran can be funded by the oil money pool, because even when India’s oil imports from Iran fell more than 40 percent from January 2012 to 2013, their value was still nearly $1 billion in one month.

“The new payment mechanism has been helping Indian rice exporters. Competitors in Pakistan don’t have any such facility,” M P Jindal, president of the All India Rice Millers Association said.

“This year we are estimating at least a 10 percent rise in basmati rice exports. Exports are booming, especially to Iran and Iraq.”

Pakistan exported around 30,000 tonnes of rice, worth $21 million, directly to Iran in the second half of 2012, a sharp fall from the 12 months to the end of June 2012 when sales approached 140,000 tonnes, according to the Rice Exporters Association of Pakistan (REAP).

Pakistan’s rice sales to the UAE, the main shipping route into Iran, also dropped sharply to less than 52,000 tonnes in the second half of 2012, compared to nearly 228,000 tonnes in the previous 12 months, REAP data showed.

Iran relies on imports for about 45 pct of its annual rice consumption of 2.9 million tonnes, according to U.S. Department of Agriculture data.

END OF MONOPOLY

Iranian buyers prefer Indian basmati rice, but shipping and payment problems faced by Indian suppliers created an opportunity for Pakistani dealers based near the border with Iran to make big profits, rice exporters based in Karachi said.

Those willing to take the risk of trucking goods along hundreds of kilometres of highways of western Pakistan to the remote border area with Iran could charge premiums well above Indian rice prices.

“Last year India had a lot of currency issues and then Pakistan was selling at around a $150 premium over India because India could not sell to Iran directly… It became a monopoly,” Mohammad Raza, a Karachi-based rice exporter, said.

“This year that’s not happening… This year it has shrunk considerably, but it has not completely finished.”

The success of India’s oil pool for funding exports direct into Iranian ports over the last few months has hit Pakistan’s rice truckers’ profits hard, slashing premiums to well below $80/tonne in early 2013, he said.

These border traders who have problems getting paid by Iranian buyers are also driving a boom in barter of fuel for food, several rice traders at the show said.

“The trucks are not going to Iran. They used to go there but not anymore because the money is not coming from Iran to Pakistan so the trade has virtually stopped,” Tariq Ghori, director of Karachi-based Matco Rice Processing Ltd, told Reuters at the Gulf Food trade fair in Dubai last week.

Matco, one of Pakistan’s biggest Basmati rice exporters with sales of over 100,000 tonnes last year, and Raza’s company were not part of the border food trade boom because the risks of shipping across Pakistan are high and the competition from Quetta-based groups fierce.

“They are done by people at the border. They have links with the Iranian people… Family ties, they know each other, speak the same language, so they do the trade,” Ghori said.

“Big companies like us, sitting in the big cities, cannot do that trade.”

Many mainstream competitors shipping out of Karachi still rely on Dubai middlemen buy their product and sell it on to Iran, putting them at a disadvantage to Indian exporters now able to ship direct.

Many Indian rice sales to Iran were also done through Dubai on credit until a slump in the rial in early 2012 prompted several Iranian buyers to default on payments. Since then most Dubai traders will only deal with Iranian buyers paying up front or brandishing a letter of credit from their government to tap the oil revenue pool in India. (Additional reporting by Rajendra Jadhav in Mumbai, editing by William Hardy)

India trumps Pakistan’s Iran rice trade boom with oil rupees

(Reuters) – Iran’s oil export revenues are helping Indian rice exporters to claw back some of the lucrative business lost to cross-border truckers in Pakistan as a result of Western sanctions.

Indian rice exports direct to Iran have bounced back, thanks to shippers being paid up front in rupees from a huge pool of oil money owed to Iran by Indian refiners.

“Now business is being done directly because Iran is allowed to open letters of credit in Indian rupees because the government has to pay money to Iran for the oil,” said Suresh Manchanda, marketing director of a Delhi-based company which exports rice, wheat and sugar globally.

“For the importers back in Iran, Indian rupees are easily available to them via the government, so they can do business in a much easier way than doing business in any other currency,” Manchanda told Reuters at the Gulf Food trade show in Dubai.

“For all practical purposes the money never leaves anywhere, the money is already in India.”

India is Tehran’s biggest rice supplier but shipments were held up in early 2012 after Iranian buyers defaulted on payments. Many Indian suppliers then stopped sales on credit.

Tightened sanctions on shipping and bank transfers between Iran and India started a boom in Pakistani rice trucked across the remote border into Iran by groups based in Quetta, grains traders from Pakistan and India said at the world’s biggest food show last week.

Problems getting paid by private Iranian buyers hit by a slide in the value of the rial also saw the rice flow from India being routed through Dubai, with wholesalers there taking on the payment risk in return for a mark-up.

Before Western sanctions aimed at stopping Tehran’s disputed nuclear programme began to bite, Indian official data show rice sales to the Islamic Republic were surging.

They more than doubled in the financial year of 2009-2010 and also rose in value by nearly 35 percent to over $600 million from April 2011 to the end of March 2012, but this was a period when India’s overall rice export earnings almost doubled in value globally.

Dubai’s role in the India-Iran rice trade has withered since oil pool payments started.

From April 2011 to the end of March 2012, $821 million of Indian rice was shipped to the United Arab Emirates, more than anywhere else. But in just nine months from April to December last year Iran imported over $725 million of Indian rice, up 20 percent on the previous 12 months, while Indian exports to the UAE slumped to $287 million, official figures show.

There is effectively no limit to how much Indian rice exports to Iran can be funded by the oil money pool, because even when India’s oil imports from Iran fell more than 40 percent from January 2012 to 2013, their value was still nearly $1 billion in one month.

“The new payment mechanism has been helping Indian rice exporters. Competitors in Pakistan don’t have any such facility,” M P Jindal, president of the All India Rice Millers Association said.

“This year we are estimating at least a 10 percent rise in basmati rice exports. Exports are booming, especially to Iran and Iraq.”

Pakistan exported around 30,000 tonnes of rice, worth $21 million, directly to Iran in the second half of 2012, a sharp fall from the 12 months to the end of June 2012 when sales approached 140,000 tonnes, according to the Rice Exporters Association of Pakistan (REAP).

Pakistan’s rice sales to the UAE, the main shipping route into Iran, also dropped sharply to less than 52,000 tonnes in the second half of 2012, compared to nearly 228,000 tonnes in the previous 12 months, REAP data showed.

Iran relies on imports for about 45 pct of its annual rice consumption of 2.9 million tonnes, according to U.S. Department of Agriculture data.

END OF MONOPOLY

Iranian buyers prefer Indian basmati rice, but shipping and payment problems faced by Indian suppliers created an opportunity for Pakistani dealers based near the border with Iran to make big profits, rice exporters based in Karachi said.

Those willing to take the risk of trucking goods along hundreds of kilometres of highways of western Pakistan to the remote border area with Iran could charge premiums well above Indian rice prices.

“Last year India had a lot of currency issues and then Pakistan was selling at around a $150 premium over India because India could not sell to Iran directly… It became a monopoly,” Mohammad Raza, a Karachi-based rice exporter, said.

“This year that’s not happening… This year it has shrunk considerably, but it has not completely finished.”

The success of India’s oil pool for funding exports direct into Iranian ports over the last few months has hit Pakistan’s rice truckers’ profits hard, slashing premiums to well below $80/tonne in early 2013, he said.

These border traders who have problems getting paid by Iranian buyers are also driving a boom in barter of fuel for food, several rice traders at the show said.

“The trucks are not going to Iran. They used to go there but not anymore because the money is not coming from Iran to Pakistan so the trade has virtually stopped,” Tariq Ghori, director of Karachi-based Matco Rice Processing Ltd, told Reuters at the Gulf Food trade fair in Dubai last week.

Matco, one of Pakistan’s biggest Basmati rice exporters with sales of over 100,000 tonnes last year, and Raza’s company were not part of the border food trade boom because the risks of shipping across Pakistan are high and the competition from Quetta-based groups fierce.

“They are done by people at the border. They have links with the Iranian people… Family ties, they know each other, speak the same language, so they do the trade,” Ghori said.

“Big companies like us, sitting in the big cities, cannot do that trade.”

Many mainstream competitors shipping out of Karachi still rely on Dubai middlemen buy their product and sell it on to Iran, putting them at a disadvantage to Indian exporters now able to ship direct.

One size doesn’t fit all: IKEA goes local for India, China

(Reuters) – Without a willingness to lug cheap flat-pack wardrobes home and wrestle with self-assembly, there would be no IKEA, but in Asia, where the locals have other ideas, the Swedish furniture giant thinks it still has a bright future.

As it expands in China and prepares to break into India, IKEA Chief Executive Mikael Ohlsson trusts that its core concept, influenced by painstakingly acquired local knowledge, will, over time, give it an edge.

“Most people don’t really know and can hardly imagine that we visit thousands of homes round every store in the world every year,” he told Reuters at a store in Malmo in southern Sweden.

“We sit down in the kitchen and talk to them … That’s the way we try to learn and understand. ‘What are you annoyed with? What are your frustrations? What would you like to have? How much can you afford? What are your alternatives?’” he said.

The group has already taken its huge out-of-town stores packed with modern Scandinavian style to 26 markets, with the product and experience instantly recognisable across them all.

But as it ventures further afield, it is tweaking its range and showrooms and adding services to accommodate new cultures.

One size doesn’t fit all. In regions where apartments have smaller rooms, its showrooms have to be smaller. A sample balcony exhibit will be kitted out differently in northern China, where balconies are widely used for food storage, than in the south, where they often double as laundries.

Beds are bigger in the United States, but mattresses are firmer in China. And while stores will continue to carry about 10,000 products, the bulk of them from its standard range, the company stocks rice cookers and more chopsticks in the latter.

“As we become more and more global and we expand more in China and we grow into India, we will need, probably, to have a wider range,” Gillian Drakeford, IKEA’s China retail chief said.

“Then each country will be able to secure relevance by taking the part they really need. But of course we will still secure IKEA’s identity.”

UNDER ONE ROOF

In developed markets, IKEA is positioned as a low-priced mass-market brand, but in emerging markets where low prices are the norm, it targets a growing middle class that aspires to international lifestyle products. For these customers, design and a comprehensive range under one roof are the attraction.

“They have numerous kinds and styles of furniture in one mall, mostly covering all the furniture I need,” said Jane Wang, 21, an airport security inspector at an IKEA store in downtown Shanghai.

Price is much less a selling point in these new markets.

“IKEA loves little slogans like ‘for the many people’. Those things are still true, but might be less true for some emerging markets,” said Neil Saunders at retail consultancy Conlumino.

“As IKEA expands globally, the price of global expansion is that the company does become less cohesive.”

Having more than doubled sales in the past decade to 27.6 billion euros last year, the firm plans to double them again by 2020 and open 20-25 new stores a year from 2015.

Growth will mainly be in existing markets – in China it has reached 11 stores in about a decade and aims to triple that pace – but also in new; in India, where it is expecting the final go-ahead to enter soon, it has a plan for 25 stores.

Ohlsson expects it will take four or five years to open its first stores in India once it has the all-clear.

Ohlsson said IKEA was expanding its services for delivery, assembly and installation, as well as offering IKEA staff to get goods off the shelves for customers, very rare in mature markets. That is likely to be important for catching on in Asia.

“DIY (do it yourself) works very well in Europe and the United States; they are used to it. If you look at markets like China and India, people are not used to DIY. That is a reason why Home Depot has failed in China,” said Kantar Retail analyst Himanshu Pal.

“Indians have been used to local furniture shop owners making entire furniture units and delivering it to your house.”

KNOWLEDGE BANK

Another issue for China has been the sheer volume of visitors, with 28,000 on an average Saturday in Beijing – roughly what a European store has in a strong week.

That means IKEA is building larger stores in China. It also builds them closer to customers, as fewer people have cars, and is likely to aim for the same in India.

“I’m not sure if I will want to travel to the end of the city to buy their furniture. Plus I have heard about how you are encouraged to pack your furniture up and then take it home and set it up yourself, and that is not something we Indians are used to,” said Ridhika Mandavia, a playschool teacher in Mumbai.

“So if they can change that model and help pack and deliver furniture at no extra cost, it may work.”

In China, buyers tend to buy lower-priced articles – last year the Beijing store was IKEA’s biggest by volume, but only number nine by sales, Drakeford said.

IKEA finds red tape everywhere, but specific to India is the need for approval from state governments, and paperwork for transport between the highly autonomous states. The government also requires it to source 30 percent of its inputs locally.

When entering China, IKEA found itself more expensive than local low-priced firms, and only became profitable after big price cuts to come closer to the competition.

Prices there are now on average 50 percent lower than at the start. The classic Klippan sofa costs 999 yuan, a third of what it did in 2002, against 2,995 crowns in Sweden.

Drakeford said IKEA’s main advantage in a country with a growing urban population with Western aspirations, but little knowledge of Western styling, lay in its co-ordinated range and in presentation. “IKEA is their knowledge bank.”

Turning a profit in India could also take time, but IKEA can afford to be patient.

“They have the financial strength to just bank upon sales growth without worrying too much about profit margins,” said Kantar Retail’s Himanshu Pal. “If they don’t make money for the next two, three years, it does not become a huge crisis.”