Business news in brief

QUOTE OF THE DAY

“Core inflation is still running too low. We probably have further weakness to see as retailers adjust prices to reduce the stockpiles that we know boosted growth.”

Laura Rosner, BNP Paribas SA economist Article, 1D

U.K. ready to open shale-drilling area

The U.K. government is ready to open an area the size of Wales for shale drilling next year, doubling the space available for exploration.

A licensing round for onshore oil and gas exploration will offer as many as 150 blocks covering about 7,700 square miles, Simon Toole, head of licensing at the Department of Energy and Climate Change, said Tuesday in London. There are about 170 onshore licenses currently.

The U.K. is offering lower taxes to increase drilling as North Sea reserves decline. An area stretching from England’s east to the northwest, known as the Bowland Basin, may hold as much as 1,300 trillion cubic feet of gas, according to the British Geological Survey. That’s enough to meet demand for almost 50 years at an extraction rate similar to fields in the U.S., where a shale-gas boom has propelled it to the world’s top producer.

Total SA’s Chief Executive Officer Christophe de Margerie told the British Broadcasting Corp. the company is interested in exploring for shale in Britain. Royal Dutch Shell Plc has also expressed interest. Centrica Plc, the largest energy supplier to U.K. households, and France’s GDF Suez bought stakes in acreages this year.

6-year cocoa-production deficit seen

Global cocoa supplies are headed for the longest production shortfall in more than five decades as chocolate demand surges in Asia.

Cocoa use will top output by about 70,000 metric tons in the 12 months that started Oct. 1 and deficits will persist through 2018, a six-year stretch that would be the longest since the data began in 1960, said Laurent Pipitone, head of statistics at the International Cocoa Organization in London. Prices may rally 15 percent to $3,200 a ton by the end of 2014, according to the median of 14 trader estimates in a Bloomberg News survey.

Global sales of chocolate confectionary will gain 2.1 percent to a record 7.3 million tons next year, after a 2 percent gain in 2013, estimates Euromonitor International Ltd. Sales in China more than doubled in the past decade, outpacing gains in Western Europe, the biggest consumer. Tighter supplies will mean higher costs for food makers including Nestle SA, Barry Callebaut AG and Lindt & Spruengli AG.

“Demand for chocolate is great,” said Ashmead Pringle, the president of Atlanta-based Green Haven Commodity Services, which oversees about $340 million. “A lot of the world population is moving to the middle class and will have more money to spend, in particular in emerging markets and Asia.”

Cocoa climbed 24 percent this year to $2,775 a ton on ICE Futures U.S. New York, the second-biggest gain among the 24 commodities tracked by the Standard & Poor’s GSCI gauge.

  • Bloomberg News

2 banks take aim at chat-room traders

JPMorgan Chase & Co., the biggest U.S. bank by assets, and Deutsche Bank AG are cracking down on multitrader chat rooms amid investigations into currency manipulation.

JPMorgan will ban its traders from using multiparty chat rooms with peers at other firms, and is reviewing one-on-one communications, said a person familiar with the matter, who asked not to be identified because the discussions are private. Deutsche Bank will widen its prohibition on such exchanges to include its investment-bank unit and transaction-banking business next year, Michael Golden, a spokesman for Germany’s biggest lender, said Tuesday.

The review comes as investigators around the world scour the chat forums for evidence of wrongdoing in investigations ranging from alleged manipulation of foreign-exchange markets to interest-rate rigging. UBS AG’s investment-banking arm banned its traders from using multibank chat rooms last month, and Royal Bank of Scotland Group Plc is considering such a step.

Citigroup Inc. has also banned the use of chat rooms to communicate with multiple traders at other banks, while still allowing their use to communicate on a one-to-one basis, according to a person familiar with that decision.

  • Bloomberg News

Generic Viagra set to hit market in ’17

WASHINGTON - Generic Viagra will hit the market more than two years earlier than expected under a settlement reached by Teva Pharmaceutical Industries and Pfizer, the maker of the impotence drug.

Teva can enter the market on Dec. 11, 2017, and will pay patent royalties through the expiration of the Viagra patent in April 2020, New York-based Pfizer said in a statement. Other terms weren’t disclosed.

Viagra, whose chemical name is sildenafil citrate, is one of Pfizer’s best-known medicines. Sales of the drug $2.05 billion in 2012, its best year ever. Pfizer earlier this year began selling the blue pill through a company-sponsored website to combat counterfeit versions sold online.

The medicine came from a group of compounds considered during research to treat high blood pressure and angina. The assistance with erectile dysfunction was a side effect discovered during testing, and the patent, issued in 2002, is for use of the compound to treat impotence.

  • Bloomberg News

Washington state makes Airbus pitch

SEATTLE - Even as they try desperately to hang on to Boeing Co., officials in Washington state have been courting the main competitor of the aerospace giant.

During the past several months, state officials have traveled to the U.S. headquarters of Airbus SAS in Virginia, moved to connect Airbus with Washington state suppliers, and signed a five-year confidentiality agreement with the company to allow further exploration of business opportunities, according to records obtained by The Associated Press under public disclosure laws.

In a confidential memo provided to Gov. Jay Inslee in July, state officials described dozens of potential ways to expand or recruit aerospace businesses in the state. At the top of the memo was Airbus, described as just one of a few major opportunities.

One expert said for years it was generally frowned upon for Washington state officials to jeopardize the relationship with Boeing by seeking ties with Airbus. However, the steps outlined in the memo came amid tension created when Boeing moved its headquarters from Seattle to Chicago and started an assembly line in South Carolina to build its 787 passenger plane.

Business, Pages 26 on 12/18/2013

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