www.yorkdispatch.com Article Last Updated: Friday, March 21, 2003 - 12:02:44 PM EST By RICHARD FELLINGER Harrisburg bureau

Responding to high motor fuel prices, state regulators have applied a special premium on milk prices to help dairy farmers cover the cost of shipping milk.

The Milk Marketing Board has added a 15-cent premium to every hundred pounds of milk. The premium, approved unanimously by the three-member board, will take effect in April and last through June.

Farming advocates including the Pennsylvania Farm Bureau petitioned the board for the special fuel premium because of soaring diesel costs, and the board agreed to it after holding an emergency hearing March 5.

"It's going to help a little bit," said Richard Waybright, co-owner of Mason Dixon Farms in Freedom Township, Adams County.

Waybright said his diesel fuel costs have nearly doubled since November. He now pays a wholesale price of $1.42 per gallon, compared to just above 70 cents in November. Retail diesel prices in the Harrisburg area averaged $192.8 yesterday, according to the Pennsylvania AAA Federation.

A dairy farmer with about 100 dairy cattle should receive nearly $360 extra per month from the 15-cent premium, said farm bureau spokeswoman Jayanna Yeakle. Though the farm bureau sought a 15-cent fuel premium, Yeakle said "nobody's getting rich off it."

The extra premium comes as the state is scaling back its over-order premium, which is the amount farmers receive for milk above government-mandated prices, in an attempt to keep Pennsylvania milk competitive with milk from other states. The over-order premium, now at $1.40, is down from $1.65 in December 2002.

The board's latest action means dairy farmers will receive a special fuel premium for the first time in more than a year. Farmers received a 25-cent premium from April 2000 to January 2002, said Milk Marketing Board spokeswoman Tracey Jackson.

Fuel prices have spiked in recent months because of the potential war with Iraq, a recent strike in Venezuela, cold temperatures and low inventories.

But there are signs that gasoline prices already have peaked, said Ted Leonard, executive director of the Pennsylvania AAA Federation. Crude prices dropped this week as producers cranked up supply and Saudi Arabia announced it would make up any shortfalls from Iraq, Leonard said.

"And I think some of the situation in the Middle East is becoming a little clearer. There will always be some volatility until that issue is settled, but I think we're on the road to settling it," Leonard said.

The Milk Marketing Board is expected to consider in May whether to extend the fuel premium past June. The over-order premium also expires in June, and they will likely be asked to extend the fuel premium as they consider setting the over-order premium for the last six months of 2003, Jackson said.

Latest travel advice

www.timesonline.co.uk March 20, 2003

The Foreign Office has urgently updated its travel advice following the start of the war with Iraq.

In a statement last night it said: "The risk of indiscriminate terrorist attacks in public places, including tourist sites, will be especially high. You should be vigilant, take sensible precautions, be aware of local sensibilities, monitor the media, and check travel advice for the country you live in or plan to visit.”

Britons living in the Middle East are advised that in the event of a chemical or biological attack they should follow local authorities and emergency services' advice.

Below is a guide to destinations that can be high-risk.

For more information the Know Before You Go website provides a searchable list of countries with the Foreign Office's latest travel advice.

For those who require more detailed information, such as emergency telephone numbers, the Suzy Lamplugh Trust's World Wise website is a comprehensive source. The Trust advises on matters of personal safety.

Jordan

All British nationals in Jordan should consider leaving while air routes remain open. There is a risk of the use of chemical and biological weapons by Iraq, as well as an increasing possibility of terrorist attacks.

If Jordanian airspace is closed or flights are disrupted, British nationals are advised to adopt a low profile, to minimise travel and take sensible security precautions. 

A US diplomat was killed in Jordan in October 2002. In particular British nationals should not travel to the southern Jordanian city of Ma'an.

The British Embassy has reduced staff to a core and will be running very restricted services. The dependents of all embassy staff have been sent home.

Bahrain

All British nationals in Bahrain should consider leaving. There is a risk of the use of chemical and biological weapons by Iraq, as well as an increasing possibility of terrorist attacks in the event of war.

The British Embassy has reduced staff to a core and will be running very restricted services. The dependents of all embassy staff have been sent home.

Kuwait

British citizens in Kuwait should leave urgently while there are still commercial flights.The threat to Britons and organisations from terrorism is already considered high and is likely to rise further in the event of military action. Attacks in the region could involve the use of chemical and biological materials

Residents who do remain should check travel advice daily. Travellers are advised that the dependents of staff at the British Embassy have left the country. Staff levels are being reduced to a core and the ability to conduct consular services will be restricted.

Israel

The Government advises against travel to Israel, including holidays. As well as the continual threat of domestic terrorism there is a risk to Israel from Iraq, which may involve biological and chemical weapons.

Those who are already in the country should maintain a high level of vigilance and consider whether their presence is essential. The advice includes East Jerusalem.

Travel to the West Bank and Gaza and the Israel/Gaza border area is discouraged; and the area along Israel's border with Lebanon is also considered unsafe.

There are frequent fatal shooting attacks and car and suicide bombs. Targets include crowded public areas and public transport. Visitors should keep in touch with developments and monitor travel advice.

British nationals should avoid likely terrorist targets which include crowded public areas, shopping malls, cafes, bars, nightclubs, hotels, restaurants and public transport.

Syria

British citizens should avoid travelling to Syria. (except those in transit between flights, providing they do not break their journey)

The terrorist threat to British nationals in the country is considered high. Those remaining in Syria should "maintain a high level of vigilance" and "consider whether your presence and that of your dependants is essential."  Developments on Iraq and any further increase in regional tension could affect travel advice.

Iraq

All British citizens leave the country at once. Those considering remaining are advised to be aware that British passport holders were used as hostages during the 1990 to 1991 crisis. There is no British diplomatic presence in Iraq.

Qatar and Saudi Arabia

All non-essential travel to these countries is discouraged because of the risk of terrorist action. British residents are advised to consider whether their presence is essential, to take care over their security and be vigilant at all times

There have been a series of bombings in Saudi Arabia since 2000, seven of which have killed and injured Westerners. An American diplomat was killed in a terrorist attack in Jordan in October 2002.

The Government's advice is expected to change in the event of military action against Iraq and British nationals are advised to check the Know Before You Go website daily.  

Colombia

The British Embassy in Colombia was closed in December due to a specific threat to its buildings in Bogota. It has since re-opened.

The Foreign Office advises against all travel to Choco, Putumayo, Meta and Caqueta provinces and to rural areas of Antiquia, Cauca, Narino and Norte de Santander provinces.

In 1999 three US citizens were kidnapped and killed. Six British citizens have been kidnapped in the last four years, including one who was later killed.

Colombia has been in the throes of civil war for nearly four decades, and thousands of people have been killed in action involving right-wing paramilitaries, Marxist rebels and the Government. Attacks may not be directed specifically at British tourists, but they are still at risk.

Venezuela

Violent protests against President Hugo Chavez led the British Government to advise against all travel to Venezuela in December. However, it has now been taken off the "danger list" as the unrest of the general strike - during which thousands of demonstrators took to the streets - appears to have waned.

Kenya

East Africa's most popular tourist destination attracts 80,000 British tourists each year. The Foreign Office reviewed its advice on Kenya as a result of the bomb in Mombasa in 2002, but it does not discourage British tourists from visiting:

"We believe that Kenya is one of a number of countries in East Africa where there may be an increased terrorist threat," it says.

"UK nationals in Kenya should be vigilant, particularly in public places frequented by foreigners such as hotels, restaurants and shopping malls. In particular there is a potential threat against Western interests in Nairobi."

Pakistan

Holiday travel to Pakistan should be cancelled and any British nationals in Pakistan - except for those of Pakistani origin - are advised to leave unless they have a compelling reason to stay.

Visitors should monitor events and be prepared to leave quickly. British nationals should register with the consuls in Islamabad and Karachi and make constant safety checks, including looking under vehicles for explosives. Karachi in particular has a history of civil disorder. The city is volatile and bombs are not uncommon.

On Christmas Day three girls were killed in a grenade attack by terrorist on a Protestant church in Daska, near Lahore. 

India

The Government no longer advises against travel to India and its website says the majority of visits to the country are trouble-free. However, travellers are told to avoid travel to Jammu and Kashmir. Also discouraged are visits to Gujarat, Rajasthan and Punjab. However, travel to Amritsar, Jaipur, Udaipur, Jodphur, Bikaner and Jaisalmer is acceptable.

There is an increased risk of terrorism to visibly British institutions and organisations. Visitors already in India should contact the British High Commission in New Delhi if they have specific concerns about their safety.

Nepal

Visitors to Nepal should monitor the situation extremely carefully as there is an increased risk of terrorism due to the ongoing Maoist insurgency.

Terrorism in Nepal is not thought to be directed specifically at British nationals, but "there is a risk of attacks in places where Westerners tend to gather, such as hotels, restaurants and tourist sites."

The Foreign Office says: "We do not warn against travel to Nepal, but you should be aware that there are risks, and be on your guard as far as possible."

Thailand

There is no recent history of terrorism in Thailand and the Government is not aware of any current, specific threat to British nationals. However, there is a continuing threat from terrorism in South East Asia generally, following the attacks in Bali.

Travellers are warned to monitor the international situation and not to become involved with drugs as the possession of even small amounts can result in prison or the death penalty.

Morocco

Most visits to Morocco are trouble-free, although travel to the Western Sahara, a disputed territory, is discouraged because of thousands of unexploded mines in the area.

Malaysia

Previously considered a safe tourist destination, Malaysia was named by the Australian Government as one of six states where its citizens are at risk after the bomb in Bali. However, the British Government continues to say that most visits to Malaysia are trouble free.

Turkey

Travel to Turkey is usually trouble-free, but tourists should take sensible precautions given heightened tension in the Middle East. There have been no recent terrorist incidents in coastal resort areas and the situation in eastern Turkey has improved considerably.

The Government says the Turkish authorities are tackling the threat of domestic and international terrorism effectively and with vigour, particularly in tourist areas. However it recommends against travel to the south-east of the country 

Bomb attacks, aimed at the security authorities, sometimes occur in Istanbul. On September 10 2001, a bomb attack in Istanbul's Taksim area killed two Turkish policemen and an Australian tourist.

Philippines

Visitors to the Philippines are advised that crime driven by poverty - including kidnapping - is a serious problem. There is also an increased risk of terrorist attack.

Tourists should not travel to central southern and western Mindanao or to Basilan or the Sulu archipelago. You should take particular care through Palawan and at all coastal resorts.

Regional tension could increase in a conflict with Iraq, so British nationals are advised to check advice daily.

Egypt

More than 340,000 British nationals visited Egypt in 2001, mainly as tourists. The country is generally considered a safe destination and visitors are protected by effective police and security forces.

However, there is a threat of terrorism and visitors are advised to follow the international situation and check travel advice regularly.

United Arab Emirates (including Dubai)

There is an increase in the threat to British nationals, including from Iraq. This threat is now considered high. It is likely to rise further in the event of a war. Terrorist attacks could involve the use of chemical or biological materials.

British nationals should maintain a high level of vigilance and exercise good security practices. You should check travel advice daily and follow developments closely.

Namibia

Travel to the immediate border areas with Angola is discouraged because of the dangers of landmines and munitions left over from the Angolan civil war. However, most visits to the rest of Namibia are trouble-free.

Information from Worldwise (Suzy Lamplugh Trust) and the Foreign Office

Know Before You Go Helpline 44 (020)  7008 0232/0233.

The Government recommends that in no circumstances should British travellers visit Burundi, Central African Republic, Ivory Coast, Liberia or Yemen. They should also avoid western Azerbaijan, the Chechen Republic and areas of Russia, Somaliland and Ethiopia.

Friday, March 21, 2003

LONDON — Just a day into the U.S.-led war against Iraq, oil importers have been handed an early economic victory by an unexpectedly quick and sharp fall in the price of crude.

But analysts caution against premature celebration. Speculative hedge funds have sold heavily short on crude futures on London and New York exchanges over the past two weeks, leaving prices vulnerable to a sudden leap on signs of a snag in the military campaign.

U.S. and British troops secured some of Iraq's southern oilfields on Friday in an early success for the invasion, but some wells were set on fire and traders are on alert for any sign of long-term damage to Iraq's oil industry.

"One should appreciate how easy it is for things to go wrong," said futures brokerage Fimat in a report. "Ignoring this would be terrifically imprudent."

For weeks, analysts had expected oil prices to drop once the attack got under way as the "war premium" was eroded.

But no one was prepared for a $10-a-barrel rout that began several days before the first shot was fired.

On Friday, benchmark Brent crude for May was trading close to $25 a barrel, down from a peak of $34.55 nearly two weeks ago. U.S. crude has fallen even more heavily, having hit $39.99 at the end of February.

The steady climb in Brent prices from a November low of $23 has been all but erased in the space of seven trading days.

Barring uncertainties from Iraq, many oil traders say a Brent price of $25 is roughly in line with fundamentals but that balanced view may yet turn bearish if ultra-thin U.S. commercial stockpiles build quickly during the low-demand second quarter.

"It is the weight of oil, rather than the force of bombs, which is pushing markets lower," said Leo Drollas of London's Center for Global Energy Studies. "OPEC is now producing more oil than has been lost."

Battered equities markets have raced higher as investors and funds switched from oil and safe-haven bonds into the financial sectors depressed by months of war worries and economic gloom.

Consumers and oil-importing governments grappling with the highest prices in a decade will have breathed a sigh of relief as prices deflated, easing fears of a fully-fledged price shock on economies struggling to escape recession.

"Clearly it's a positive thing that the price has come down. It should relieve inflationary pressures and improve business and consumer sentiment. But the pace of the fall has been a surprise," said Royal Bank of Scotland economist Tony Wood.

Even OPEC producers should be pleased by the fall back into the cartel's preferred $22-$28 price band because the high price was stalling demand from importers.

The abrupt plunge was led by speculative hedge funds. As diplomacy failed and war became inevitable they took profits from long positions and then began selling heavily short as U.S. forces prepared for what many dealers believe will be a quick, overwhelming victory.

But if the campaign drags on, oilfields are severely damaged or if further disruptions to world supply emerge, speculators desperate to cover exposed short positions could send prices bouncing sharply higher.

"Instead of positive news flows, prices have been moved by a speculative bet of staggering proportions," JP Morgan oil analyst Paul Horsnell said.

"In short, the market seems to have pushed far too far, far too fast and on the basis of far too little hard information."

Prices reacted similarly during the first Gulf War, falling as U.S. troops moved into battle -- but then they were helped by the release of emergency inventories held by the International Energy Agency.

This time around the Organization of the Petroleum Exporting Countries (OPEC) pre-empted any release by pumping extra oil months in advance, with Saudi Arabia sending tens of millions of extra barrels toward the United States since January.

These barrels coupled with recovering output from strike-hit Venezuela have helped offset the effective stoppage of Iraq's 1.7 million bpd of exports, which came to an end this week as international traders shied away.

www.forbes.com Reuters, 03.21.03, 11:40 AM ET By Tim Ahmann WASHINGTON, March 21 (Reuters) - U.S. consumer prices posted their biggest gain in more than two years in February as energy surged on the march to war with Iraq and food costs jumped, the government said on Friday. But the government's Consumer Price Index showed inflation well-contained apart from volatile food and energy costs. The CPI, the main U.S. inflation gauge, rose 0.6 percent last month, the Labor Department said. It was the biggest gain since a matching rise in January 2001 and was a touch above the O.5 percent increase expected on Wall Street. Energy prices shot up 5.9 percent, the largest increase since June 2000, while food costs staged their biggest climb since June 1996, gaining 0.7 percent. However, the so-called core CPI, which strips out food and energy, edged up just 0.1 percent, a notch below the 0.2 percent economists had expected. That meager gain brought the 12-month rise in core prices to just 1.7 percent, the smallest in nearly 37 years. In contrast, the overall CPI has risen a strong 3.0 percent over the last 12 months, mostly on higher energy costs. Markets shrugged off the data, focusing instead on the progress of the U.S. conflict with Iraq. "Most people should not be concerned about inflation," said Lynn Reaser, chief economist at Banc of America Capital Management in St. Louis, noting that oil prices have receded sharply in recent days on optimism the U.S.-led war in Iraq would lead to little disruption in supplies. A separate report released on Friday suggested the fate of the U.S. economy depends on a quick resolution of the U.S.-led war in Iraq. The Economic Cycle Research Institute said its weekly leading index fell to a 10-week low due to war worries. "If it is quicker and more decisive, we have a chance at tipping away from a recession," ECRI Managing Director Lakshman Achuthan said. "If something goes wrong and things get bogged down, we can tip toward more vulnerability which would lead to recession." OIL One big factor coloring the U.S. economic outlook has been the price of oil, which many economists warned could take a big bite out of the wallets of the consumers who have kept an uneven recovery afloat. The cost of gasoline rose 9.9 percent in February, the largest monthly gain since June 2000, while the cost of fuel oil spiked up 15.8 percent, the sharpest increase since February of 2000. While pump prices for gasoline hit a record high of $1.73 a gallon this week, relief may be on the way soon. Oil prices had climbed steeply through February after a now-ended workers' strike in Venezuela cut into supplies and as the United States prepared for war with Iraq. But as war began to appear inevitable and bombs started to drop, prices reversed course, shedding a quarter of their value from recent highs. Crude oil futures extended a week-long plunge on Friday as U.S. and British troops captured key Iraqi oil facilities intact. Crude futures in London traded near a three-month low. Most economists focused on the benign underlying inflation picture presented by the core CPI. The scant increase in core prices reflected a 0.2 percent drop in apparel costs, a 0.1 percent decrease in new vehicle prices and a 0.3 percent plunge in prescription drugs prices. Another factor holding core prices down was an unchanged reading in shelter costs, which had been rising sharply. WHAT NEXT? Federal Reserve policymakers think inflation will likely drift lower this year given a high degree of slack in the economy, minutes from a January rate-setting meeting released on Thursday showed. However, officials spoke about a number of "crosscurrents" that made the inflation picture hard to judge. Still, the recent rise in oil and gold prices has eased fears that the United States could face deflation -- an outright drop in the general price level. "Inflation is in existence. We are nowhere near close to a deflationary environment," said David Durrant, chief currency strategist at Bank Julius Baer in New York. Rising service prices have ensured a modest inflation in the United States despite falling goods prices. Fed officials held interest rates steady at 1961 lows this week and said that given the high degree to which war clouds had shrouded the outlook, they could not "usefully" characterize whether economic risks were weighted toward inflation or weakness or balanced between them.

www.abs-cbnnews.com By ESTRELLA TORRES and MIA GONZALEZ TODAY Reporters

In an effort to fully destroy the regime of Saddam Hussein, Washington is pressing foreign governments to expel all Iraqi diplomats stationed in their countries and freeze their bank accounts.

In Manila, Foreign Affairs Secretary Blas Ople said his department will study Washington’s request, noting that the Philippine government exercises sovereignty on the matter of expelling diplomats.

“We are not going to be stampeded into acquiescing to any request of a friendly foreign state. We have to study this in the light of our own interests,” Ople said in an interview with Malacañang reporters before the oath taking of newly appointed ambassadors at the Palace Ceremonial Hall.

In a separate interview with diplomatic reporters, Ople recalled that, “I expelled an Iraqi diplomat. Nobody requested it but in the interest of national security, it had to be done.”

He added, “It is the prerogative of a sovereign country to do so.”

President Arroyo said in an ambush interview that she was “leaving that [US request] for Secretary Ople to handle.”

Karen Kelley, first secretary and press attaché of the US Embassy in Manila, said the US State Department has requested foreign countries hosting Iraqi missions to expel the Iraqi diplomats.

“There is a worldwide request [from the US] where there are Iraqi missions. We have a formal request to have Iraqi diplomats suspended on a temporary basis and to take steps to assure their prompt departure [from those countries],” said Kelley in a telephone interview Friday.

Washington also plans to seize all the documents and records of the Iraqi officials located in the foreign governments.

“But the US State Department asks foreign governments to respect and protect property of the Iraqi diplomats and prevent destruction of records and documents of the Iraqi mission,” Kelley said.

The US government has also asked the foreign governments to freeze the bank accounts and assets of Iraqi diplomats being kept in the name of the Iraqi government.

Kelley said the request was made to foreign governments, including the Philippines, because of Saddam’s refusal to disarm and withdraw its weapons of mass destruction.

According to an earlier report from Washington, the US wants to expel some 600 Iraqi diplomats deployed in 30 countries, including the Philippines.

Relatedly, Ople said the DFA has not been directed to make a position on the possible US military use of Philippine airspace during war in Iraq, as there has been no request.

He indicated that the request, if it is ever made and granted, is not likely to draw opposition from Congress, as it had been done during the attack on Afghanistan.

He said the likelihood of such a request “is not great because all of their assets appeared to be already massed in the Persian Gulf in the vicinity of Iraq.”

Fearing retaliatory attacks, around 22 US embassies and consulates all over the world have shut down while 12 other posts have authorized their staff and their families to return home.

Kelley said the closure of the embassies and consulates were not based on the directive of the US State Department but decided upon by the respective ambassadors in every post.

“As a result of military action in Iraq, there is a potential for retaliatory actions to be taken against US citizens and interests throughout the world,” stated the US Worldwide Caution dated March 20, 2003.

According to a report on CNN website, the US embassies and consulates that closed down their operations are located in the cities of Almaly, Khazakstan; Amman, Jordan; all posts in Australia; Bucharest, Romania; Buenos Aires, Argentina; Cairo, Egypt; Caracas, Venezuela; Damascus, Syria; Istanbul, Turkey; Kabul, Afghanistan; Lagos, Nigeria; Paris, France; Nairobi, Kenya; Oslo, Norway; all posts in Pakistan; Riyadh, Saudi Arabia; Savanna Yemen; Skopje, Macedonia; all posts in South Africa; Surabaya, Indonesia; Tel Aviv, Israel and Jerusalem.

In Manila, the embassies of Canada and United Kingdom renewed travel advisories for their traveling citizens.

“The travel advisory is necessary because of the history of many incidents that travelers should be aware of,” said Paul Dimond, British ambassador to Manila.

“Heightened tensions as a result of the Iraq situation, together with increased threats globally from terrorism, put Canadians at greater risk. Canadians should maintain a high level of personal security awareness at all time as the security situation could deteriorate rapidly without notice,” stated Canada’s travel advisory dated March 21.

As for the Filipino workers in Kuwait, an area nearest to Iraq, Ople said they are already out of harm’s way.

He said some have crossed the border to Saudi Arabia, where they were received by a special team created by the Philippine foreign affairs department in Riyadh.

“The Filipino workers are more concerned about the panic reactions of their relatives in the Philippines,” Ople said.

Ople said the President has decided to retain Ambassador Bayani Mangibin in Kuwait “by popular demand.”

The President earlier disclosed a plan to send Mangibin to Iraq after the conflict because of his expertise in after-war construction.

“We have an excellent foreign service and we have a very deep bench in the Department of Foreign Affairs. So, if we send an ambassador to Baghdad, you can be sure that he will be very first class. He doesn’t need to be Ambassador Mangibin,” he said.

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