UK biofuels industry looks to keeps its nerve

Britain's nascent biofuels industry faces its first crisis as producer profit margins evaporate and opponents lobby intensively against government incentives, industry sources said. ?It requires everyone to hold their nerve, including government," Clare Wenner, head of transport biofuels for the Renewable Energy Association, told Reuters.

UK biofuels company D1 Oils Plc is one of the producers that have been running refineries below capacity, with margins hit by a fall in mineral oil prices and a rise in feedstock costs. ?With prices where they are now, there is no point in ramping up volumes,? D1 Oils chief executive officer Elliott Mannis said, adding the company was just meeting its contractual obligations using soy purchased when prices were lower.?A refiner would lose money on every ton of material," he said of current margins.

The sector's struggles have hurt stock prices, with the D1 Oils share price cut by half in the past few months to trade on Friday at about 135 pence, down from as much as 315 pence in July last year.

Biofuels Corp plc, the leading UK producer of biodiesel, has also seen its stock price dive to trade on Friday at about 24 pence compared with more than 200 pence in May last year. Biofuels, mainly produced from grains, sugar and vegetable oils, can be substituted for fossil fuels and are seen as a way to reduce the emission of the greenhouse gases believed to contribute to global warming.

The European Union has encouraged governments to provide incentives to stimulate the industry's expansion.

South Korea and U.S. reach partial deal

South Korean and U.S. negotiators have reached partial deals for a free trade pact, Seoul?s trade ministry said yesterday, but agreement on opening up the hotly contested automobile and agricultural markets remained elusive.

Negotiators are racing to seal the deal, which studies said could add about $ 20 billion to their annual $ 71,5 billion in trade, before the end-March expiry of a White House authority to negotiate pacts Congress can approve or reject but not amend.

?The two countries reached agreement on the customs area focused on simplifying and speeding up customs procedures on cargo, inspection of place of origin to prevent imports of third-country goods and on procedures for cooperation on customs issues," South Korea's trade ministry said in a statement.

The agreement on customs procedures followed successful conclusion of talks on government procurement on Saturday and anti-trust regulations.

But negotiations on automobiles and farm goods remained far from over and were likely to extend beyond this last formal round of talks that are scheduled to end today, South Korea's chief negotiator told reporters.

Seoul is seeking an immediate removal of U.S. tariff on automobile imports while Washington wants the end of what it sees as South Korea's non-tariff barriers, such as auto tax based on engine displacement, which it says discriminates against U.S. cars.

Talks on opening South Korea's market to imports of another politically sensitive commodity, rice, have yet to begin.

Egyptian 4-year-old boy tests positive for bird flu

A 4-year-old Egyptian boy has contracted the deadly bird flu virus, bringing to 24 the number of Egyptians who have been tested positive for the disease, health ministry and World Health Organization officials said yesterday. A health ministry official said the boy had contracted the H5N1 bird flu virus after coming into contact with infected household birds. He was in ?good condition,? the official said. A World Health Organization official confirmed the case but gave no details. Egypt has the largest bird flu cluster outside Asia, with 13 deaths out of the 24 reported human cases.

Most of those infected in Egypt had contact with live birds kept at home. Bird flu initially caused panic across Egypt and did extensive damage to the poultry industry, although the sector has since largely recovered.