Weather reports for Honduras and Guatemala
continue to make headlines for the second or third day.
Any idea on how this might shake out for the major
players in the banana industry? CQB, DOL, FDP, FYF.L,
Did anyone see it.
Friends tell me it
painted a picture that CQB would probably abandon
Honduras. Their opinion, NOT the comments from anyone
connected with La Tela or CQB
Does anyone have a transcript?
The EU has drawn up reformed rules, due to take
effect in January. Brussels says the new policy complies
with the WTO ruling, but Washington
The United States believes the new rules, which set
import quotas for Latin American bananas and for fruit
from former European colonies in the Caribbean,
discriminate against U.S. distributors of Latin American
bananas such as Dole <DOL.N> and Chiquita Brands
On Tuesday, the USTR published a long list of
European exports that could be hit with punitive duties,
ranging from wine, fruit juice and cakes to toys, light
fittings, ballpoint pens, vacuum cleaners and paper
If it persists with the sanctions threat, it would
whittle down the list of targeted goods by December 15
for sanctions to take effect on February 1.
exports to the United States of goods on the list were
worth 1.387 billion Ecus ($1.63 billion) in 1997, Nigel
Gardner, spokesman for European Trade Commissioner Sir
Leon Brittan, said. Gardner described the list as
"It's arbitrary in its value.
They make no justification for this value. And it's
arbitrary in what it covers," he said.
implemented the sanctions would have "widespread damaging
effects right across the economy of the EU," he said.
11/11 09:25 FOCUS-EU to take WTO action over U.S.
By Adrian Croft
11 (Reuters) - The European Union on Wednesday
condemned as "completely arbitrary" a U.S. threat to slap
sanctions on up to $1.63 billion of EU exports and pledged
legal action in two weeks unless Washington dropped the
Jacques Santer, president of the EU's executive
Commission, wrote to U.S. President Bill Clinton appealing to
him to give "urgent personal attention" to a row over
banana trade which is provoking a crisis in
usually-close transatlantic relations.
against the 15-nation EU "would be a grave political
misjudgment at a time when we should be working together...to
alleviate the world's economic difficulties," Santer
"I cannot overstate the political importance of this
The U.S. Trade Representative's (USTR) office on
Tuesday published a list of dozens of European products
-- ranging from wine to suitcases -- that could be
hit with punitive, 100 percent duties next February
if Washington judges that the EU has failed to
implement a World Trade Organisation (WTO) ruling that its
banana import policy broke world trade rules.
row between the two commercial giants, which in 1997
traded goods worth around $320 billion, has the
potential to be very damaging although EU officials say
they would refrain from retaliating with sanctions of
Santer told Clinton that unilateral
U.S. action would be a "clear breach" of U.S.
commitments to the WTO and said the EU would launch a case
against the United States at the Geneva-based world trade
body on November 25 unless Washington withdrew its
If the United States went ahead
with sanctions, it would severely damage the
multilateral trade system and "undermine the agenda for
positive EU-U.S. cooperation on which we have just
agreed", Santer said, referring to a new initiative to
remove technical barriers to transatlantic
He urged the United States to settle its argument
with the EU through the WTO's dispute settlement
procedures and said he believed EU governments would agree
to an accelerated WTO review of whether the EU's new
banana policy complied with WTO rules.
Renato Ruggiero said on Wednesday the United States and
EU must work out the problem. "Both partners have a
responsibility to settle the issue," he said in a
The row has flared over a product that EU officials
say is of "tiny" importance for the U.S.
In September 1997, the WTO ruled in favour of the
United States and a group of Latin American countries
which argued that the EU's banana import rules favoured
Caribbean growers over their producers and marketing
4) Do you leave, donating the land to the Govt,
workers, church, whomever. Does that negate item #3. Now
then, assuming that neither of those groups are
organized enough to run the ops, is that doomed to fail,
and thus spread negative goodwill to CQB. Or is that
a very (sneaky) way to help yourself out of a bad
situation knowing the end result will not be beneficial to
whomever you give the land to.
5) if you stay, what
do you do. Assuming that you need to basically start
from scratch, where does CQB/DOL get the cash? Current
ops? Do you apply for WTO/IMF/ relief loans that are
arriving to assist in the rehabilitation of the country?
If so, are you perceived as preying on the cheap
financing that should be used to help the citizens (I'm
just throwing out plusses and minuses here, no
commentary of my own), even though you are the biggest
employer(s) in the region, and the ONLY source of income for
tens of thousands of people in the region. (directly
6) Lets assume, that CQB
already has potentially impaired assets on the books
resulting from overpaying for banana lands in 89-91, as is
evidenced by their continuing announcements of charges for
"core asset redeployment", then would one assume, based
on the Enquirer's stories of nominee ownership in
Honduras, that some of that money is sunk in the San Pedro
Sula area. Then are they forced to go back in, as they
would have a hard time justifying the total amount of
the write-off, above and beyond TRR?
words is Honduras too big to fail? And if so, is it
only for CQB and not for DOL or the other players? If
it is only for CQB, then what does that do for CQB.
Does that force them to rebuild the 10,000+ acres at
Tela, and leave the other lands as a write-off?, or do
they do it all? If so, what does that do to the
volume/pricing scenario. What is the cost of the write off
versus the cost of rebuilding, and could either one be
more favorable than the other?
Sorry for the
rambling message, let's start some good discussion
What are the upsides for CQB and/DOL?
Well, again, as Lazio stated it, let us not
forget that while we are speculating on earning a few
dollars, this has become an absolute catastrophe for
people in the region. We should be more concerned about
the setback these people are suffering.
points to ponder:
That AP article on pricing for
bananas seems to not have a whole lot of support behind
the statements. Yes there is/was an oversupply of
bananas, but good lord, when CQB and DOL both say that all
of Honduras is wiped out, that's a @%*! load of
bananas stripped from the market. Surely at least 40MM
boxes (and that's probably on the low end) Warshaw
claimed that there may not be production in Honduras
until 2000!!!!!!!!!!!!! Is this the first sign that CQB
won't be there to harvest?
If anyone has seen
banana land after a major flood, you realize that not
only do you lose the hanging crop, but the damage to
the infrastructure is even more costly. How much
would it cost to redig the primary and secondary
drainage in La Lima? Could it even be justified in today's
economy? You would basically have to recreate the
plantation! Anybody care to guess what that would cost in
today's prices. Start digging out those financial reports
from the boom years, and we could possibly figure it
if you suppose, as the Enquirer printed, that CQB
actually owns the "independent grower" land through
nominee owners, then what does that add up to in dollar
cost of investment. Add that to the amount of the CQB
owned land at Tela Railroad.
Now, some scenarios
come to mind.
1) You don't rebuild. Too
expensive. can't justify it in today's market (perhaps
assuming no real change in EU quota conditions).
you watch market conditions, get an idea of pricing
volatility after the true impacts of supply and demand come
to light. Then do you make a decision based on what
your rebuild costs are.
3) do you wait and
watch to see if DOL or others rebuild or walk. If they
walk, what do you do. Is there some risk (either
politically or in terms of negative goodwill) to abandoning
the ops when Honduras is most in need. Is that risk
greater if you are first or last to leave the
More in part 2
Did you ever think that if this stock goes to 15,
maybe there isn't anything wrong with it to provoke
shorting? After all, the bad news is out. Go ahead short
away. But read my post # 226 before you do.
I have to agree with Opt4stocks this is a GREAT
I am hoping it will continue to go
up then short at 13-15 range.
They are going to
have a very hard time in the next 12 months.
luck to all!
First of all, I will not participate in the
general downgrading of the atmosphere on this board, if I
offended you, my apologies. My comments stand, and as has
been mentioned many times before, there is not enough
volume/float on this stock by individual investors (non fund)
for ANY comments on here to influence any movement of
this stock. Period. The Lindners control most of it
and they can have a big impact, they have just chosen
My comments have been very clear that
I am long in this stock, and continue to be.
Nothing I have said would cause anyone to sell or short
this stock, however I have stated the truth and if you
don't like that, well I can't help it. Sorry if I seem
to have a little more insight that might cause you
to question your investment choice. My comments are
for the most part objective and backed up with fact,
and aren't the usual pump n dump or short seller BS
that floods the message boards. I've been in this
stock since before it hit 50 (1991) and I've ridden
(averaged) it down along the way ever since.
the votes cast, etc, you have to remember that all of
the shares held in the employee benefit plans are
voted in direct proportion to non-plan held shares
voted. Add to that the shares held by upper management
(Non Lindner family members) and you can come to a
considerably higher number. Does that Lindner block include
any/all shares held by the successor to American
Financial Corp? That number seems quite low when I always
remember that the Lindners
directly/indirectly/beneficially owned or managed about 38% of the shares
outstanding. For the record that is my shoddy memory and
probably is not accurate. Maybe someone else can give us
that exact percentage, family and AFC/AIG/A?? and all
of the Trusts.
As for liking Management, I'll
tell you, I don't. Hagin is the best asset they have,
Sims is VERY good, and the rest of Senior Mgt would
have been tossed from any other company years ago if
they didn't have such strong ties to the Lindners,
especially Keith. Paz is still new to the organization, and
it will be interesting to see how he does.
Ask yourself this question: Considering the extremely
high percentage of their total $$ production is
sourced in 7 countries that are Spanish speaking, what
percentage of Senior Management do you think can even speak
Spanish? Now, how many members of Middle mgt? Do you see
the problem? And this isn't gringo bashing, it's just
that if you can't talk to the people who are rowing
the boat, how can you steer it.
don't mention Senior mgt (or my views of them) on this
board, but since you brought it up, there you have it. I
still have little faith in their earnings announcements
and financial statements, and Tim Ramey at Deutche
Securities states the same thing every time he does a review
of the company. That information is public and comes
from a voice which DOES move markets, as opposed to
this tiny little board.
The other frequenters
to this forum can add their comments, but nothing
would make me happier (and richer) than if this thing
went to the moon.
Now, if you'd like to take
this offline, we can take this to private email.
What DelMonte news reports are you reading?
Wasn't there one today that mentioned a 10% banana hit
and a $35 million charge to go with it?
the record CQBholder I'm no "company stooge" and I
wonder if you'd show any better manners in person. I am
however an owner of this and many other stocks and you're
not doing me any favors. I'd like to see this
business perform better, and so far this year it has. If
you don't like management, as the book says, don't
invest and leave it to the folks who do. According to
the quarterly report this summer, the current board
got 52.9 million out of 53.5 million votes cast. The
proxy statement I got said the Lindners were only
voting 24 million of them.