Mumbai: Jeera spot and futures prices may remain steady-to-firm over the next few days on increased offtake by upcountry traders supported by lower carryover stocks and shortfall in the new crop expected in Gujarat.
Jeera March 2009 contracts at the National Commodity and Derivatives Exchange of India (NCDEX) were traded at Rs 11,240 a quintal on Thursday. Jeera June 2009 contracts prices on Wednesday resumed trading and quoted higher at Rs 11,940 a quintal up by nearly Rs 400 over benchmark contracts.
“The market is weather-driven. With the fog conditions in some parts of Gujarat, traders expect the crop to be lower by 10%-15% in 2009 on unfavorable weather conditions,” a local trader said.
Spot prices at the Unjha market yard are hovering around Rs 1,800-Rs 2,500 per 20 kg depending on quality.
“The overall crop of new jeera in Gujarat and Rajasthan is expected to be the same as last season. But this year the yield is believed to be lower than that of last year. New arrivals from Saurashtra have reached to 15,000-16,000 bags (each of 50-55 kg) daily. There are export enquiries from Dubai, so the export demand may remain steady,” Amrutbhai Patel, a leading dealer and president, chamber of commerce (Unjha) told FE.
New inflows from Rajasthan will commence in the next 15-20 days. The picture will be clearer about quality. Total crop is expected to around 28-29 lakh bags, Patel added.
There are lower stocks with exchanges and stockists in the domestic market.
“Jeera prices are likely to find support around 11,000 from where the overall upward trend is likely to resume. We continue to hold our bias up for the target of Rs 12,800 with reversal below Rs 10,800,” an analyst with Sharekhan Commodities said.
The new crop from Turkey, Iran, and Syria are to arrive in the markets only in July and August, which would also be supporting the price of Indian jeera, the analyst added. (source: financial express)
Saturday, February 28, 2009
FMC raps NCDEX on fall in SGF, violation of rules
The Forward Markets Commission (FMC) has taken a serious note of the mismanagement of financial affairs and diversion of funds made by the National Commodity & Derivatives Exchange Ltd (NCDEX) in the dealing and utilisation of the Settlement Guarantee Fund (SGF) which has violated regulatory rules.
The regulator also noted that NCDEX’s SGF had slipped below the minimum amount of Rs 5 crore as prescribed in the exchange’s own bylaws. The fund size was reduced to just Rs 5.05 lakh as on December 31 from Rs 24.87 crore between March 2004 and March 2006.
In a 20-page document released by FMC on the transaction charges levied by the exchange, it has examined the issue of reduced transaction charges and said in its finding that transaction charges may make only marginal difference in the choice of the exchange as far as market participation is concerned. The drastic cut in transaction charges cannot by itself bring an substantial jump in the volumes as expected by the exchange.
The commission has also rejected the two likely scenarios given by the exchange that could increase the volume of the exchange. Firstly, that the exchange was able to attract new clients who were so far not present in the market. Secondly, that the exchange was able to attract clients of other exchanges in the evening hours which would result in an increase of 30%-35% of the average daily trade value, i.e. 200% growth in turnover of the exchange in the evening hours.
“First of all, expecting a 200% rise in volume only on the strength of reduced transaction charges is highly impractical. Secondly, it would be incorrect to presume that such a potential shift in volume would go without any retaliatory action from competitors,” said the regulator. (source: financial express)
The regulator also noted that NCDEX’s SGF had slipped below the minimum amount of Rs 5 crore as prescribed in the exchange’s own bylaws. The fund size was reduced to just Rs 5.05 lakh as on December 31 from Rs 24.87 crore between March 2004 and March 2006.
In a 20-page document released by FMC on the transaction charges levied by the exchange, it has examined the issue of reduced transaction charges and said in its finding that transaction charges may make only marginal difference in the choice of the exchange as far as market participation is concerned. The drastic cut in transaction charges cannot by itself bring an substantial jump in the volumes as expected by the exchange.
The commission has also rejected the two likely scenarios given by the exchange that could increase the volume of the exchange. Firstly, that the exchange was able to attract new clients who were so far not present in the market. Secondly, that the exchange was able to attract clients of other exchanges in the evening hours which would result in an increase of 30%-35% of the average daily trade value, i.e. 200% growth in turnover of the exchange in the evening hours.
“First of all, expecting a 200% rise in volume only on the strength of reduced transaction charges is highly impractical. Secondly, it would be incorrect to presume that such a potential shift in volume would go without any retaliatory action from competitors,” said the regulator. (source: financial express)
Nafed to sell cotton on NSEL platform
Mumbai: The National Agricultural Cooperative Marketing Federation (Nafed) has decided to offer cotton through online spot trading system, the National Spot Exchange Ltd (NSEL). The federation has so far sold about 2,500 bales averaged around Rs 20,000 per candy valued at Rs 3 crore - Rs 4 crore through the online platform and may gear up for the sale from next week.
“The federation has so far procured total of about 35 lakh bales from states including Maharashtra, Gujarat and Andhra Pradesh. We will continue to sell cotton through all methods including online trading. Small buyers have a good option to buy through online platform as there is no competition on sales up to 10,000 bales,” said UKS Chauhan, managing director, Nafed said. This week, cotton sales has evoked good response as the major buyers in the contracts were Vardhman Mills, JG Spinning Mills, GIMA Textiles and exporter Ram Gopal Ramesh Kumar.
“The spot contracts in which sale transactions happened were Wani, Aurangabad and Nagpur delivery contracts. Since Nafed stock is lying at CWC (Central Warehousing Corporation) or SWC (State Warehousing Corporation) warehouses, the same warehouses have been designated as delivery centers of NSEL. Hence, Nafed does not incur any expenses on transportation; rather it is sold on ex-warehouse basis from existing locations,” Anjani Sinha, managing director, NSEL, said. NSEL has launched 11 contracts for Maharashtra, 3 contracts each for Gujarat and Andhra Pradesh.
“We have started participating in NSEL. We want to experiment with this new initiative. I believe the future of commodity trading lies in such electronic markets only.This will help us in reducing our cost of procurement as well as eliminating all counter party risks,” an official of a leading export house said. (source: financial express)
“The federation has so far procured total of about 35 lakh bales from states including Maharashtra, Gujarat and Andhra Pradesh. We will continue to sell cotton through all methods including online trading. Small buyers have a good option to buy through online platform as there is no competition on sales up to 10,000 bales,” said UKS Chauhan, managing director, Nafed said. This week, cotton sales has evoked good response as the major buyers in the contracts were Vardhman Mills, JG Spinning Mills, GIMA Textiles and exporter Ram Gopal Ramesh Kumar.
“The spot contracts in which sale transactions happened were Wani, Aurangabad and Nagpur delivery contracts. Since Nafed stock is lying at CWC (Central Warehousing Corporation) or SWC (State Warehousing Corporation) warehouses, the same warehouses have been designated as delivery centers of NSEL. Hence, Nafed does not incur any expenses on transportation; rather it is sold on ex-warehouse basis from existing locations,” Anjani Sinha, managing director, NSEL, said. NSEL has launched 11 contracts for Maharashtra, 3 contracts each for Gujarat and Andhra Pradesh.
“We have started participating in NSEL. We want to experiment with this new initiative. I believe the future of commodity trading lies in such electronic markets only.This will help us in reducing our cost of procurement as well as eliminating all counter party risks,” an official of a leading export house said. (source: financial express)
Hold gold: mantra for investors
Gold investment has traditionally been the preserve of a minority of investors buying it on futures exchanges or through bullion dealers. There has been an unprecedented surge in investment demand. Everybody spoke about a gold rush last week when the yellow metal jumped back above $1,000 an ounce on last Monday – not far off last spring’s record of $1,033 – before slipping back on profit taking, raising its gains to 45% since October.
Gold usually moves inversely to the dollar, but it has gained around 13% this year, despite the greenback rising by around 10% against the euro. It has hit new records in a range of currencies, including pounds, euros and Canadian and Australian dollars.
During the first two months of 2009, gold London spot rose to $989.75 at the end of February, up by 14% from $869 in early January 2009. Over the year as a whole, the gold price averaged $872, up 25% from $695 in 2007.
During the current month, gold prices reached near the psychological Rs 16,000-mark, attracting more scrap sales, as consumers chose to cash in on this rally while imports continued to slacken to zero.
Global retail investment in quarter four of 2008 jumped by almost 400%, with retail investors in France becoming net buyers of gold for the first time in 25 years. Indian consumers at the retail level invested an all time high figure of Rs 88,056 crore on gold in the calendar year 2008, as opposed to Rs 71,761 crore in 2007 - an increase of 22.7% over the previous year and 71% of this value went towards the purchasing of gold jewellery and 29% was towards investment products like gold bars and coins.
“Gold will not lose its value. I think investors should keep themselves open to acquire gold at every dip. A year from now we could see these prices as a bargain,” Prakash Jain, a bullion trader said.
As shares on stock markets around the world lost an estimated $14 trillion in value, identifiable investment demand for gold, which incorporates exchange traded funds (ETFs) and bars and coins, was 64% higher in 2008 than in 2007, equivalent to an additional inflow of $15 billion. A major shift was witnessed in gold buying from traditional jewellery to coins and bars.
“The global recession and financial crisis will hit the entire investment basket. Gold will be affected in its dual role of currency as well as commodity. Commodities across the board have fallen by more than 50% from highs. Gold would be affected to a lesser extent due to its characteristic of being a safe investment and a hedge against inflation. The physical demand for jewellery would reduce due to the current global economic conditions. Reduction in oil prices would reduce investment surplus for oil exporting nations, this would drive away another important investment group from gold,” Bhargava Vaidya, a leading bullion analyst said.
Inflows into gold exchange traded funds (ETFs) have continued to surge this year. The gold holdings of the world’s largest gold trust, the New York-listed SPDR Gold Trust has absorbed 10% of worldwide annual mine output in the past seven weeks.
At this rate, 2009’s ETF purchases would be enough to surpass the tonnage of jewellery bought last year, replacing jewellery as the top source of demand. It is now the world’s seventh-largest gold bullion holder, behind a handful of central banks.
“Gold is expected to develop a stronger trading link to the currency world as risk premia on money stabilise. Then, as the US fiscal and trade deficits get un-manageable, the weaker dollar could then help gold break through $1200/oz,” Gnanasekar Thaigrajan, director, Commtrendz Research said.
Gold jewellery demand globally fell by 6% to reach at 538.9 tonne in quarter four of 2008 from 570.3 tonne in the same quarter of 2007.
Gold in the year 2008 outperformed most of the asset classes and has provided a 32% return on investment in rupee terms for the year 2008, according to latest report of the World Gold Council (WGC).
The compounded annualised returns provided by gold in the last five years ending 2008 have been 19.54%. (10 year figure is 13.63%), the WGC report said. (source: financial express)
Gold usually moves inversely to the dollar, but it has gained around 13% this year, despite the greenback rising by around 10% against the euro. It has hit new records in a range of currencies, including pounds, euros and Canadian and Australian dollars.
During the first two months of 2009, gold London spot rose to $989.75 at the end of February, up by 14% from $869 in early January 2009. Over the year as a whole, the gold price averaged $872, up 25% from $695 in 2007.
During the current month, gold prices reached near the psychological Rs 16,000-mark, attracting more scrap sales, as consumers chose to cash in on this rally while imports continued to slacken to zero.
Global retail investment in quarter four of 2008 jumped by almost 400%, with retail investors in France becoming net buyers of gold for the first time in 25 years. Indian consumers at the retail level invested an all time high figure of Rs 88,056 crore on gold in the calendar year 2008, as opposed to Rs 71,761 crore in 2007 - an increase of 22.7% over the previous year and 71% of this value went towards the purchasing of gold jewellery and 29% was towards investment products like gold bars and coins.
“Gold will not lose its value. I think investors should keep themselves open to acquire gold at every dip. A year from now we could see these prices as a bargain,” Prakash Jain, a bullion trader said.
As shares on stock markets around the world lost an estimated $14 trillion in value, identifiable investment demand for gold, which incorporates exchange traded funds (ETFs) and bars and coins, was 64% higher in 2008 than in 2007, equivalent to an additional inflow of $15 billion. A major shift was witnessed in gold buying from traditional jewellery to coins and bars.
“The global recession and financial crisis will hit the entire investment basket. Gold will be affected in its dual role of currency as well as commodity. Commodities across the board have fallen by more than 50% from highs. Gold would be affected to a lesser extent due to its characteristic of being a safe investment and a hedge against inflation. The physical demand for jewellery would reduce due to the current global economic conditions. Reduction in oil prices would reduce investment surplus for oil exporting nations, this would drive away another important investment group from gold,” Bhargava Vaidya, a leading bullion analyst said.
Inflows into gold exchange traded funds (ETFs) have continued to surge this year. The gold holdings of the world’s largest gold trust, the New York-listed SPDR Gold Trust has absorbed 10% of worldwide annual mine output in the past seven weeks.
At this rate, 2009’s ETF purchases would be enough to surpass the tonnage of jewellery bought last year, replacing jewellery as the top source of demand. It is now the world’s seventh-largest gold bullion holder, behind a handful of central banks.
“Gold is expected to develop a stronger trading link to the currency world as risk premia on money stabilise. Then, as the US fiscal and trade deficits get un-manageable, the weaker dollar could then help gold break through $1200/oz,” Gnanasekar Thaigrajan, director, Commtrendz Research said.
Gold jewellery demand globally fell by 6% to reach at 538.9 tonne in quarter four of 2008 from 570.3 tonne in the same quarter of 2007.
Gold in the year 2008 outperformed most of the asset classes and has provided a 32% return on investment in rupee terms for the year 2008, according to latest report of the World Gold Council (WGC).
The compounded annualised returns provided by gold in the last five years ending 2008 have been 19.54%. (10 year figure is 13.63%), the WGC report said. (source: financial express)
Sunday, February 22, 2009
Oil palm smallholders in Indonesia to get sustainable farming training
Small-scale oil-palm farmers are being encouraged to go green, and will be provided with training on how to run their plantations without harming the environment, Achmad Mangga Barani, the director general of plantations said at the Ministry of Agriculture on Friday.
The passport to environmental approval is the Roundtable of Sustainable Palm Oil, or RSPO, certification. Previously, the endorsement had only been available to big plantation companies that could afford the training and environmental upgrades.
“We will start the training in March,” Achmad said. “Most farmers at present are handling their plantations in traditional ways, so it’s very important to heighten their awareness of RSPO certification.”
The roundtable was formed in 2004 by palm-oil producers, processors, traders, consumer-goods manufacturers, environmentalists and nongovernmental organizations, bankers, investors and other stakeholders with the aim of promoting the growth of sustainable products under responsible environmental conditions.
One of the concerns has been that although big companies had resources to reorganize their plantations to gain certification, smallholders, who own a total of 35 percent of the oil-palm hectarage in the country, would suffer by being unable to sell their produce for export without certification.
“After training, farmers must reorder the management of their plantations and then apply for certificates,” Achmad said. Given the high cost of certification, the ministry proposes to band smallholders into groups to request certification together. Auditing costs per hectare for certification range from $20 to $40, excluding the cost of modifying plantation practices.
RSPO certification involves eight general principles and 39 criteria, including the commitment to manage environmental and economic sustainability, and responsibility for natural resources and labor welfare.
Derom Bangun, vice chairman of the RSPO, said that aside from the nature issue, rumors in European Union countries that plantations in this country use child labor were disturbing
“Some say there are plantations that are employing children under the age limit and paying them very little,” he said. All of the stakeholders needed to be aware of the rumors and combat them, he said, in the effort to maintain exports to the EU and other countries.
Of nine major palm-oil companies controlling more than 2.9 million hectares around the country, only PT Musim Mas has gained RSPO certification. Five other companies — PT Hindoli, PT London Sumatera Tbk, PT Sime Indo Agro and PTPN III — are currently in the process, Derom said. (Source: thejakartaglobal.com)
The passport to environmental approval is the Roundtable of Sustainable Palm Oil, or RSPO, certification. Previously, the endorsement had only been available to big plantation companies that could afford the training and environmental upgrades.
“We will start the training in March,” Achmad said. “Most farmers at present are handling their plantations in traditional ways, so it’s very important to heighten their awareness of RSPO certification.”
The roundtable was formed in 2004 by palm-oil producers, processors, traders, consumer-goods manufacturers, environmentalists and nongovernmental organizations, bankers, investors and other stakeholders with the aim of promoting the growth of sustainable products under responsible environmental conditions.
One of the concerns has been that although big companies had resources to reorganize their plantations to gain certification, smallholders, who own a total of 35 percent of the oil-palm hectarage in the country, would suffer by being unable to sell their produce for export without certification.
“After training, farmers must reorder the management of their plantations and then apply for certificates,” Achmad said. Given the high cost of certification, the ministry proposes to band smallholders into groups to request certification together. Auditing costs per hectare for certification range from $20 to $40, excluding the cost of modifying plantation practices.
RSPO certification involves eight general principles and 39 criteria, including the commitment to manage environmental and economic sustainability, and responsibility for natural resources and labor welfare.
Derom Bangun, vice chairman of the RSPO, said that aside from the nature issue, rumors in European Union countries that plantations in this country use child labor were disturbing
“Some say there are plantations that are employing children under the age limit and paying them very little,” he said. All of the stakeholders needed to be aware of the rumors and combat them, he said, in the effort to maintain exports to the EU and other countries.
Of nine major palm-oil companies controlling more than 2.9 million hectares around the country, only PT Musim Mas has gained RSPO certification. Five other companies — PT Hindoli, PT London Sumatera Tbk, PT Sime Indo Agro and PTPN III — are currently in the process, Derom said. (Source: thejakartaglobal.com)
Tea sector to prosper in recession, say experts
Kochi: What do the people do in times of recession? Well, it seems that they sit more at home and drink tea, and drink more tea by shifting from Cola, Beer and Vodka, say commodity experts. And the penchant for tea in times of uncertainty and recessionary blues helps the tea industry. Perhaps, it may be the only sector and industry smiling and flourishing, while other markets shrink and crawl. Experts estimate it to grow handsomely in the years to come as people turn more health conscious.
In the US market, tea's appeal is immense and vibrant according to Joseph P Simrany of the Tea Association of USA. Import of tea into the US market is seen growing with green tea, in particular, growing by almost 200% in a decade. The total market has grown from $1.84 billion in 1990 to $7.3 billion in 2008. It is estimated to double in the next five years, Simrany said.
By the year 2012, the tea market in the US would be worth over $15 billion, he added. Traditional tea is expected to grow in the range of 2-3%,while the ready-to-drink segment is estimated to grow by 5-10%.
It has been observed that there is a ten-fold increase in specialty tearooms from 200 to 2,400. Even, traditional coffee houses are offering specialty tea, Simrany observed.
Marcus Wolf from Schroeder & Rudolph Hamann oHG of Germany also expects the market to stay in positive territory in the coming days. The demand for tea is seen increasing all over Europe with people lining up to buy or consume their tea. The per capita consumption of tea is estimated at 25 litres by the German Tea association. The large Turkish population aids German tea consumption.
Similar is the case of the UK market says Pradeep Jeyathilak of Unilever UK. "The only thing cheaper than tea is tap water. A cup of tea comes for 1.8 pence, while instant coffee retails for 3.9 pence and carbonated drinks cost 16. 5 pence," he said. During the last recession, 50% of the households claimed to spend less on eating out of home. It is seen that people sit at home and drink more tea, he added. The total UK market for tea has seen 2% growth in 2007 when compared to 2006 and 0.4% growth in 2008, when compared to 2007. Tea sales increased in the UK aided by its retail price relative to other drinks, its high level of home consumption and the emotional benefits, Pradeep Jeyathilak said.
Alexey Shvetsov of Ormi Traders, says that in Russia more consumers are shifting from Cola, beer and Vodka. "What else can people drink? People still dink tea as a healthy and traditional drink. And an obvious choice when you have less money is still tea," he said. The total import into Russia in 2008 is seen at 178.6 million kg. Shvetsov thinks that people may shift from premium varieties of tea to the less costly varieties if the crisis lingers. Consumers may also shift from relatively expensive tea bags to the loose packages, he added.
Other tea drinking nations like Egypt, Iran and Iraq are also reporting a growth in tea consumption.
Developed nations are shifting from traditional tea to the ready-to-drink segment and specialty teas, while the West Asian and Asian nations still prefer tea the traditional way. (Source: Financial Express)
In the US market, tea's appeal is immense and vibrant according to Joseph P Simrany of the Tea Association of USA. Import of tea into the US market is seen growing with green tea, in particular, growing by almost 200% in a decade. The total market has grown from $1.84 billion in 1990 to $7.3 billion in 2008. It is estimated to double in the next five years, Simrany said.
By the year 2012, the tea market in the US would be worth over $15 billion, he added. Traditional tea is expected to grow in the range of 2-3%,while the ready-to-drink segment is estimated to grow by 5-10%.
It has been observed that there is a ten-fold increase in specialty tearooms from 200 to 2,400. Even, traditional coffee houses are offering specialty tea, Simrany observed.
Marcus Wolf from Schroeder & Rudolph Hamann oHG of Germany also expects the market to stay in positive territory in the coming days. The demand for tea is seen increasing all over Europe with people lining up to buy or consume their tea. The per capita consumption of tea is estimated at 25 litres by the German Tea association. The large Turkish population aids German tea consumption.
Similar is the case of the UK market says Pradeep Jeyathilak of Unilever UK. "The only thing cheaper than tea is tap water. A cup of tea comes for 1.8 pence, while instant coffee retails for 3.9 pence and carbonated drinks cost 16. 5 pence," he said. During the last recession, 50% of the households claimed to spend less on eating out of home. It is seen that people sit at home and drink more tea, he added. The total UK market for tea has seen 2% growth in 2007 when compared to 2006 and 0.4% growth in 2008, when compared to 2007. Tea sales increased in the UK aided by its retail price relative to other drinks, its high level of home consumption and the emotional benefits, Pradeep Jeyathilak said.
Alexey Shvetsov of Ormi Traders, says that in Russia more consumers are shifting from Cola, beer and Vodka. "What else can people drink? People still dink tea as a healthy and traditional drink. And an obvious choice when you have less money is still tea," he said. The total import into Russia in 2008 is seen at 178.6 million kg. Shvetsov thinks that people may shift from premium varieties of tea to the less costly varieties if the crisis lingers. Consumers may also shift from relatively expensive tea bags to the loose packages, he added.
Other tea drinking nations like Egypt, Iran and Iraq are also reporting a growth in tea consumption.
Developed nations are shifting from traditional tea to the ready-to-drink segment and specialty teas, while the West Asian and Asian nations still prefer tea the traditional way. (Source: Financial Express)
Silver futures crosses 23,000-level, crude oil futures drops 6%
Mumbai: Base metals futures prices fell marginally on the week ended on Friday on rising inventories amid slow demand. Gold futures continued to climb last week mainly on buying support from retail investors as the global economic scenario continues to remain grim.
Silver prices also surged in line with gold. Silver March on Friday crossed the Rs 23,000 per kg mark mainly on strong buying support.
On the other hand, crude oil prices continued to remain lower on lack of renewed buying interest.
MCX copper February 2009 contracts continued to rule weak and settled at 5.24% lower at Rs 157.35 per kg on Friday from Rs 166.05 over the previous week. "Support is seen at Rs 155 per kg," a local analyst said.
Copper stocks in LME registered warehouses have gained 2,950 tonne to remain at 5,28,250 tonne. Global copper market saw a surplus of 3.29 lakh tonne in 2008, the World Bureau of Metal Statistics (WBMS) report said. LME Copper cash was quoted at $3,254.75 per tonne last week.
MCX crude oil March 2009 contracts once again slipped below the Rs 2,000-level and ended lower at Rs 1,957 per barrel on Friday over the previous week's close of Rs 2,080 per barrel, down by 5.91%. WTI crude oil price in NYMEX hovered at around $39.88 per barrel.
Even though inventory data showed a drop in oil stocks, the bearish picture for crude oil consumption is still in place, an analyst with Angel Broking said.
Crude oil prices may trade sideways as demand is unlikely to increase in the medium term, a trader said.
MCX gold April 2009 contracts finished higher at Rs 15,661 per 10 gram on Friday over the previous week's Rs 14,638 per 10 gram, up by 7% as investors have flocked to gold, the safe haven asset. In the London market, spot prices touched $998.57 an ounce.
MCX silver March 2009 contracts were traded higher at Rs 22,970 per kg on Friday from Rs 21,818 over the previous week, up by 5.28%.
The white metals crossed the Rs 23,000 per kg level on Friday mainly on sustained buying support. (source: Financial Express)
Silver prices also surged in line with gold. Silver March on Friday crossed the Rs 23,000 per kg mark mainly on strong buying support.
On the other hand, crude oil prices continued to remain lower on lack of renewed buying interest.
MCX copper February 2009 contracts continued to rule weak and settled at 5.24% lower at Rs 157.35 per kg on Friday from Rs 166.05 over the previous week. "Support is seen at Rs 155 per kg," a local analyst said.
Copper stocks in LME registered warehouses have gained 2,950 tonne to remain at 5,28,250 tonne. Global copper market saw a surplus of 3.29 lakh tonne in 2008, the World Bureau of Metal Statistics (WBMS) report said. LME Copper cash was quoted at $3,254.75 per tonne last week.
MCX crude oil March 2009 contracts once again slipped below the Rs 2,000-level and ended lower at Rs 1,957 per barrel on Friday over the previous week's close of Rs 2,080 per barrel, down by 5.91%. WTI crude oil price in NYMEX hovered at around $39.88 per barrel.
Even though inventory data showed a drop in oil stocks, the bearish picture for crude oil consumption is still in place, an analyst with Angel Broking said.
Crude oil prices may trade sideways as demand is unlikely to increase in the medium term, a trader said.
MCX gold April 2009 contracts finished higher at Rs 15,661 per 10 gram on Friday over the previous week's Rs 14,638 per 10 gram, up by 7% as investors have flocked to gold, the safe haven asset. In the London market, spot prices touched $998.57 an ounce.
MCX silver March 2009 contracts were traded higher at Rs 22,970 per kg on Friday from Rs 21,818 over the previous week, up by 5.28%.
The white metals crossed the Rs 23,000 per kg level on Friday mainly on sustained buying support. (source: Financial Express)
Bull run to continue in gold on strong fund buying
Gold has again proven its core investment qualities as a store of value, safe haven and portfolio diversifier and this has struck a chord with nervous investors. Gold price continued to trade near a seven- month high of over the $1,000-mark last Friday, as it consolidated gains before tackling new peaks.
Majority of precious metal analysts say that amid the global economic slowdown, gold prices may continue to remain bullish during this week on continued buying by investors and fund houses, including Exchange Traded Funds (ETF). Gold prices in the London market have risen sharply by nearly 11% over the past seven weeks, on the back of strong investment demand, while the yellow metal gained about 5% during the last week as investors seek an alternative to stocks and bonds.
"Gold prices have touched $1,000 an ounce on Friday as major funds are going long in gold while taking short positions in currency trading. I think price may continue to rule higher and likely to see $1,033 an ounce in the international market.
One can also see a major correction after reaching that level," Bhargav Vaidya, a leading bullion analyst told FE. In the domestic market, prices have also shot up in 2009 from a low of Rs 12,767 per 10 gram to a recent high of Rs 15,706 per 10 gram.
Local prices on Friday firmed at Rs 15,600 per 10 gram in the middle of the wedding season, with scrap meeting most of the little demand.
"There is no new fresh buying of gold jewellery. Import of gold also remained negligible in the current month. I think gold prices may continue to rule higher on sustained buying by investors," said Prithaviraj Kothari, a leading bullion dealer and managing director of Riddhi Siddhi Bullion Ltd.
It is interesting to note that the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust said its holdings hit a record 1,028.98 tonne last week. Investment in silver ETFs has also been strong, with holdings of the world's largest, the iShares Silver Trust, jumping nearly 3% to a record 7,873.75 tonne last week.
"The outlook for gold remains positive as economic turmoil prevails and investors keep buying gold due to its safe haven appeal. The latest deteriorating economic signs included last Thursday's close of the US Dow industrials index at its lowest in more than 6 years. Gold has decoupled from the dollar. The powerful negative correlation between gold and dollar is very evident visually as the dollar surged against other currencies but gold held its own way," Debjyoti Chatterjee, analyst with MAPE ADMISI Commodity Research said.
"I anticipate that gold, as a unique asset class, will continue to play a vital role in providing stability to both household and professional investors around the world," Aram Shishmanian, CEO, World Gold Council, said. (Source: Financial Express)
Majority of precious metal analysts say that amid the global economic slowdown, gold prices may continue to remain bullish during this week on continued buying by investors and fund houses, including Exchange Traded Funds (ETF). Gold prices in the London market have risen sharply by nearly 11% over the past seven weeks, on the back of strong investment demand, while the yellow metal gained about 5% during the last week as investors seek an alternative to stocks and bonds.
"Gold prices have touched $1,000 an ounce on Friday as major funds are going long in gold while taking short positions in currency trading. I think price may continue to rule higher and likely to see $1,033 an ounce in the international market.
One can also see a major correction after reaching that level," Bhargav Vaidya, a leading bullion analyst told FE. In the domestic market, prices have also shot up in 2009 from a low of Rs 12,767 per 10 gram to a recent high of Rs 15,706 per 10 gram.
Local prices on Friday firmed at Rs 15,600 per 10 gram in the middle of the wedding season, with scrap meeting most of the little demand.
"There is no new fresh buying of gold jewellery. Import of gold also remained negligible in the current month. I think gold prices may continue to rule higher on sustained buying by investors," said Prithaviraj Kothari, a leading bullion dealer and managing director of Riddhi Siddhi Bullion Ltd.
It is interesting to note that the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust said its holdings hit a record 1,028.98 tonne last week. Investment in silver ETFs has also been strong, with holdings of the world's largest, the iShares Silver Trust, jumping nearly 3% to a record 7,873.75 tonne last week.
"The outlook for gold remains positive as economic turmoil prevails and investors keep buying gold due to its safe haven appeal. The latest deteriorating economic signs included last Thursday's close of the US Dow industrials index at its lowest in more than 6 years. Gold has decoupled from the dollar. The powerful negative correlation between gold and dollar is very evident visually as the dollar surged against other currencies but gold held its own way," Debjyoti Chatterjee, analyst with MAPE ADMISI Commodity Research said.
"I anticipate that gold, as a unique asset class, will continue to play a vital role in providing stability to both household and professional investors around the world," Aram Shishmanian, CEO, World Gold Council, said. (Source: Financial Express)
Saturday, February 21, 2009
Crude oil above $35 amid grim economic news
Markets shrugged off a steady barrage of grim U.S. economic news to push oil prices above $35 a barrel Thursday, with a drop in the dollar encouraging investors to buy crude.
A report by the Fed predicting a sharper economic contraction and raising forecasts for unemployment was offset by a 1.1 percent drop in the dollar against the euro, to $1.2667. Oil tends to rise when the dollar drops as investors use the commodity as a hedge against inflation.
Light, sweet crude for March delivery jumped by $1.23 to $35.85 a barrel by midafternoon in Europe on the New York Mercantile Exchange. The contract on Wednesday fell 31 cents to settle at $34.62.
The March contract expires on Friday, and traders switched their focus to the April contract, which rose 62 cents to $38.03.
Besides the boost oil prices received from the drop in the dollar, the economic news was gloomy.
The Federal Reserve on Wednesday confirmed what many investors already suspected — that the U.S. economy has significantly deteriorated in the last few months.
The Fed said it expects the economy will contract between 0.5 and 1.3 percent this year. Its previous forecast from November had a 0.2 percent contraction as the worst case scenario.
The Fed also said the unemployment rate will likely rise to between 8.5 and 8.8 percent this year, higher than its previous forecast of between 7.1 and 7.6 percent.
The current global economic slump began in 2007 with a crisis in the U.S. sub-prime mortgage sector, and the housing market continues to buckle under the weight of surging foreclosures.
A report from the Commerce Department on Wednesday said construction of new homes and apartments plunged 16.8 percent in January from the previous month, to a seasonally adjusted annual rate of 466,000 units, a record low.
"The housing data suggests the recession is even worse than we thought," said Christoffer Moltke-Leth, head of sales trading for Saxo Capital Markets in Singapore. "We need to see the housing market stabilize because consumer sentiment is very much correlated to it."
Investors are skeptical that a $787 billion stimulus bill signed this week by President Barack Obama will spark a quick recovery. The White House on Wednesday said the government will spend $75 billion to help prevent millions of Americans from losing their homes.
The program would provide incentives to mortgage lenders to help borrowers reduce their payments in an effort to counter a souring housing market at the core of the economic crisis.
While a number of analysts said the program might limit the hemorrhaging in housing prices, the market's cool reception seemed to show how much investors have lost confidence in government bailouts.
Crude investors are also concerned a jump in oil inventories is reflecting a steep drop-off in demand.
Analysts expect crude stocks will grow by 3.5 million barrels when the Energy Department releases inventory data for the week ended Feb. 13, according to a survey by Platts, the energy information arm of McGraw-Hill Cos. Inventories have risen more than 30 million barrels in the last six weeks.
"Inventories are the focus now," said Moltke-Leth. "If they rise again, it will put more downward pressure on crude."
Net crude oil stocks rose to a 20 month high for the week ended February 6th. It was the eighteenth weekly increase out of 20.
"Bottom line, nothing has changed," said energy analyst Stephen Schork. "There is no way to construe the current fundamental picture anyway other than bearish."
The Organization of Petroleum Exporting Countries has struggled to bolster prices as output cuts fail to keep up with falling demand.
Venezuelan Oil Minister Rafael Ramirez said Wednesday the group may cut production again at a meeting on March 15, on top of the reduction of 4.2 million barrels a day announced since September. Ramirez said the 13-member cartel would like prices to rise to $70 a barrel.
"OPEC is looking very weak right now," said Moltke-Leth said. "There's a lot of chatter from them, but the market isn't really listening."
Moltke-Leth said prices will likely fall to about $32 a barrel, which would test the 10-year average price.
"$32 and a half is a significant line in the sand," he said. "It's a key support level, and I expect the market to test how strong it is."
In other Nymex trading, gasoline futures rose 2 cent to $1.09 a gallon. Heating oil gained 3 cents to $1.17 a gallon, while natural gas for March delivery jumped 4 cents to $4.25 per 1,000 cubic feet.
In London, the March Brent contract rose 99 cents to $40.54 on the ICE Futures exchange.
(source: Associated Press writer Alex Kennedy in Singapore)
A report by the Fed predicting a sharper economic contraction and raising forecasts for unemployment was offset by a 1.1 percent drop in the dollar against the euro, to $1.2667. Oil tends to rise when the dollar drops as investors use the commodity as a hedge against inflation.
Light, sweet crude for March delivery jumped by $1.23 to $35.85 a barrel by midafternoon in Europe on the New York Mercantile Exchange. The contract on Wednesday fell 31 cents to settle at $34.62.
The March contract expires on Friday, and traders switched their focus to the April contract, which rose 62 cents to $38.03.
Besides the boost oil prices received from the drop in the dollar, the economic news was gloomy.
The Federal Reserve on Wednesday confirmed what many investors already suspected — that the U.S. economy has significantly deteriorated in the last few months.
The Fed said it expects the economy will contract between 0.5 and 1.3 percent this year. Its previous forecast from November had a 0.2 percent contraction as the worst case scenario.
The Fed also said the unemployment rate will likely rise to between 8.5 and 8.8 percent this year, higher than its previous forecast of between 7.1 and 7.6 percent.
The current global economic slump began in 2007 with a crisis in the U.S. sub-prime mortgage sector, and the housing market continues to buckle under the weight of surging foreclosures.
A report from the Commerce Department on Wednesday said construction of new homes and apartments plunged 16.8 percent in January from the previous month, to a seasonally adjusted annual rate of 466,000 units, a record low.
"The housing data suggests the recession is even worse than we thought," said Christoffer Moltke-Leth, head of sales trading for Saxo Capital Markets in Singapore. "We need to see the housing market stabilize because consumer sentiment is very much correlated to it."
Investors are skeptical that a $787 billion stimulus bill signed this week by President Barack Obama will spark a quick recovery. The White House on Wednesday said the government will spend $75 billion to help prevent millions of Americans from losing their homes.
The program would provide incentives to mortgage lenders to help borrowers reduce their payments in an effort to counter a souring housing market at the core of the economic crisis.
While a number of analysts said the program might limit the hemorrhaging in housing prices, the market's cool reception seemed to show how much investors have lost confidence in government bailouts.
Crude investors are also concerned a jump in oil inventories is reflecting a steep drop-off in demand.
Analysts expect crude stocks will grow by 3.5 million barrels when the Energy Department releases inventory data for the week ended Feb. 13, according to a survey by Platts, the energy information arm of McGraw-Hill Cos. Inventories have risen more than 30 million barrels in the last six weeks.
"Inventories are the focus now," said Moltke-Leth. "If they rise again, it will put more downward pressure on crude."
Net crude oil stocks rose to a 20 month high for the week ended February 6th. It was the eighteenth weekly increase out of 20.
"Bottom line, nothing has changed," said energy analyst Stephen Schork. "There is no way to construe the current fundamental picture anyway other than bearish."
The Organization of Petroleum Exporting Countries has struggled to bolster prices as output cuts fail to keep up with falling demand.
Venezuelan Oil Minister Rafael Ramirez said Wednesday the group may cut production again at a meeting on March 15, on top of the reduction of 4.2 million barrels a day announced since September. Ramirez said the 13-member cartel would like prices to rise to $70 a barrel.
"OPEC is looking very weak right now," said Moltke-Leth said. "There's a lot of chatter from them, but the market isn't really listening."
Moltke-Leth said prices will likely fall to about $32 a barrel, which would test the 10-year average price.
"$32 and a half is a significant line in the sand," he said. "It's a key support level, and I expect the market to test how strong it is."
In other Nymex trading, gasoline futures rose 2 cent to $1.09 a gallon. Heating oil gained 3 cents to $1.17 a gallon, while natural gas for March delivery jumped 4 cents to $4.25 per 1,000 cubic feet.
In London, the March Brent contract rose 99 cents to $40.54 on the ICE Futures exchange.
(source: Associated Press writer Alex Kennedy in Singapore)
Gold breaches Rs 16,000 level in futures trade
NEW DELHI: Breaking all previous records, gold prices on Saturday surged to a new peak at Rs 16,349 per 10 gram in futures trade, as traders
increased their exposure in the precious metal following melting stock and forex markets. The metal, which had been on a record-setting spree for the last one week, spurted to an all-time high of Rs 16,349, by adding 2.55% on the Multi Commodity Exchange, as funds preferred to park their funds in gold amid deepening global recession. The August contract for gold climbed 2.55% to touch Rs 16,349 per 10 gram. It clocked two lots. The bullion market received a major booster from the firming global trend as the gold in the US markets surged to 1,007.20 dollar an ounce last night. "Funds around the world indulged in picking gold as a safe investment during current financial turmoil," said Galipelli Harish, head of research with Karvy Comtrade. The firmness was also witnessed in spot market as gold prices climbed much close the market expectations of Rs 6,000 per 10 gram in all domestic bullion markets. In Delhi, the metal traded at Rs 15,750, in Chennai at Rs 15,775 per 10 gram, respectively. Buying by jewellers and retail customers almost dried up at existing higher levels, said a Delhi-based jeweller Rakesh Anand. (Source: PTI)
increased their exposure in the precious metal following melting stock and forex markets. The metal, which had been on a record-setting spree for the last one week, spurted to an all-time high of Rs 16,349, by adding 2.55% on the Multi Commodity Exchange, as funds preferred to park their funds in gold amid deepening global recession. The August contract for gold climbed 2.55% to touch Rs 16,349 per 10 gram. It clocked two lots. The bullion market received a major booster from the firming global trend as the gold in the US markets surged to 1,007.20 dollar an ounce last night. "Funds around the world indulged in picking gold as a safe investment during current financial turmoil," said Galipelli Harish, head of research with Karvy Comtrade. The firmness was also witnessed in spot market as gold prices climbed much close the market expectations of Rs 6,000 per 10 gram in all domestic bullion markets. In Delhi, the metal traded at Rs 15,750, in Chennai at Rs 15,775 per 10 gram, respectively. Buying by jewellers and retail customers almost dried up at existing higher levels, said a Delhi-based jeweller Rakesh Anand. (Source: PTI)
India's 2008 gold imports down 14 pct on year - WGC
India's gold imports in 2008 fell 14 percent to 660.2 tonnes as higher gold prices and volatility hurt demand, the World Gold Council said on Wednesday.
"The combination of gold's safe haven appeal and extreme uncertainty surrounding other asset classes should see consumers continue to take advantage of any dips in the price (in 2009)," the industry group said in its review.
On Wednesday, gold futures on the Multi Commodity Exchange scaled to a record high of 15,617 rupees per 10 grams on safe haven buying and a weak rupee.
The contract gained more than 28 percent in 2008 as deepening global financial turmoil spurred safe haven buying. (Source: reuters)
"The combination of gold's safe haven appeal and extreme uncertainty surrounding other asset classes should see consumers continue to take advantage of any dips in the price (in 2009)," the industry group said in its review.
On Wednesday, gold futures on the Multi Commodity Exchange scaled to a record high of 15,617 rupees per 10 grams on safe haven buying and a weak rupee.
The contract gained more than 28 percent in 2008 as deepening global financial turmoil spurred safe haven buying. (Source: reuters)
Monday, February 16, 2009
Gold braces for Rs 16,000, demand may dip
Gold is expected to coast to price levels of Rs 16,000 per 10gm after last week’s stretch of record-making highs, as the heavy safe-haven buying overseas showed the peak has yet to come, analysts and traders said.
But prohibitive prices might also crimp retail demand in the gold crazy country, bruising imports further, traders and an analyst said. “If the rupee continues to trade around 48.50-48.70 and investment continues to flow into bullion, there are fair chances for India’s gold prices spiking to at least Rs 16,000 by next couple of months,” said Pradeep Unni, senior research analyst, Richcomm Global Services, Dubai.
A median forecast of a Reuters poll of 14 banks and brokerages in early January saw gold at Rs 12,900 per 10 gm by the end of the quarter to March. But the global economic downturn is resetting prices of the world’s favourite safe haven bet. “The price-level of Rs 16,000 would be a possibility in the next two months’ time,” said Amrut Deshmukh, senior technical analyst, Way 2 Wealth Securities, Mumbai. Brokerage Anand Rathi, one of the respondents in the poll, sees gold touching Rs 15,500 by March-end.
The benchmark April contract on the Multi Commodity Exchange (MCX) was 0.55% higher at Rs 14,709 per 10 gm at 3.51 pm, after hitting an all-time high of Rs 14,824 on February 12. The contract has gained 7.1% so far in 2009 as investors sought safety in the precious metal amid a deepening global recession and financial turmoil. In 2008, gold soared to its year-high of Rs 14,320, up 35.1% from its 2007 close, before falling to Rs 11,290 on October 24. Gold has gained more than two times since 2004.
“If any investor is long, then it is advisable for him to book profits at Rs 16,000 in a couple of months,” Deshmukh added. “Gold may touch Rs 16,000 looking at the current trend and the way things are on the economic front,” said Pinakin Vyaas, chief manager - treasury, IndusInd Bank, Mumbai, adding, “but may not sustain at these levels.”
Demand might also recoil if gold does see never-before-levels, said traders and analysts. “Such high prices may result in severe shelving of retail demand especially under the current economic conditions,” said Richcomm’s Unni.
Purchases are to fall for the second month in a row with no imports so far in February because of high prices, the head of a trade body said. “We have not witnessed much physical movement even during the wedding season either due to cost or low purchasing power,” said IndusInd’s Vyaas. (Source: Reuters)
But prohibitive prices might also crimp retail demand in the gold crazy country, bruising imports further, traders and an analyst said. “If the rupee continues to trade around 48.50-48.70 and investment continues to flow into bullion, there are fair chances for India’s gold prices spiking to at least Rs 16,000 by next couple of months,” said Pradeep Unni, senior research analyst, Richcomm Global Services, Dubai.
A median forecast of a Reuters poll of 14 banks and brokerages in early January saw gold at Rs 12,900 per 10 gm by the end of the quarter to March. But the global economic downturn is resetting prices of the world’s favourite safe haven bet. “The price-level of Rs 16,000 would be a possibility in the next two months’ time,” said Amrut Deshmukh, senior technical analyst, Way 2 Wealth Securities, Mumbai. Brokerage Anand Rathi, one of the respondents in the poll, sees gold touching Rs 15,500 by March-end.
The benchmark April contract on the Multi Commodity Exchange (MCX) was 0.55% higher at Rs 14,709 per 10 gm at 3.51 pm, after hitting an all-time high of Rs 14,824 on February 12. The contract has gained 7.1% so far in 2009 as investors sought safety in the precious metal amid a deepening global recession and financial turmoil. In 2008, gold soared to its year-high of Rs 14,320, up 35.1% from its 2007 close, before falling to Rs 11,290 on October 24. Gold has gained more than two times since 2004.
“If any investor is long, then it is advisable for him to book profits at Rs 16,000 in a couple of months,” Deshmukh added. “Gold may touch Rs 16,000 looking at the current trend and the way things are on the economic front,” said Pinakin Vyaas, chief manager - treasury, IndusInd Bank, Mumbai, adding, “but may not sustain at these levels.”
Demand might also recoil if gold does see never-before-levels, said traders and analysts. “Such high prices may result in severe shelving of retail demand especially under the current economic conditions,” said Richcomm’s Unni.
Purchases are to fall for the second month in a row with no imports so far in February because of high prices, the head of a trade body said. “We have not witnessed much physical movement even during the wedding season either due to cost or low purchasing power,” said IndusInd’s Vyaas. (Source: Reuters)
Govt rules out slapping limit on sugar stocks
New Delhi: The government on Monday ruled out imposing limit on stocks of sugar a trader can keep, amid speculations that such curbs might be slapped to check possible hoarding and contain the price rise.
“There is no plan to impose stock limits (on sugar) as of now,” food and agriculture Minister Sharad Pawar said on the sidelines of a conference in New Delhi.
Sugar prices in India, the largest sugar producer after Brazil, have risen dramatically this season, starting October, due to a projected 32% decline in the output to 18 million tonne, prompting the government to allow millers to import duty-free sugar and sell in the domestic market.
Trade sources were anticipating curbs on stocks, keeping in mind the general elections this year. According to the ministry of consumer affairs, retail prices shot up to Rs 25 at a few major cities as on February 13 from Rs 20 in the beginning of the 2008-09 season. (Source: Press Trust Of India)
“There is no plan to impose stock limits (on sugar) as of now,” food and agriculture Minister Sharad Pawar said on the sidelines of a conference in New Delhi.
Sugar prices in India, the largest sugar producer after Brazil, have risen dramatically this season, starting October, due to a projected 32% decline in the output to 18 million tonne, prompting the government to allow millers to import duty-free sugar and sell in the domestic market.
Trade sources were anticipating curbs on stocks, keeping in mind the general elections this year. According to the ministry of consumer affairs, retail prices shot up to Rs 25 at a few major cities as on February 13 from Rs 20 in the beginning of the 2008-09 season. (Source: Press Trust Of India)
Negative growth to continue in gem & jewellery sector: GJEPC
Mumbai: The gem and jewellery sector will continue to witness the negative growth in the next few months, in the absence of major incentives in the Interim Budget presented by the UPA government on Monday.
The Interim Budget for 2009-10 which was presented in Parliament, extended the period for concessional finance to exporters hit hard by the recession in major global markets. Earlier, the interest subvention of 2% could be availed of till March 2009.
“The interest subvention of 2% on pre- and post-shipment credit for certain employment-oriented sectors, textiles (including handlooms and handicrafts), carpets, leather, gems and jewellery, marine products and SMEs was extended beyond March 31, 2009 to September 30, 2009 involving an additional financial outgo of Rs 500 crore,” said finance minister, Pranab Mukherjee who presented the Interim Budget in the Lok Sabha on Monday.
The domestic gems-and-jewellery industry is going through a difficult phase on the back of softer demand from key export markets such as the US and Europe and, to a lesser extent, Asia.
Reacting to the Interim Budget speech, Vansant Mehta, chairman, Gem and Jewellery Export Promotion Council (GJEPC) told FE: “We expected an increase in the subvention rate to 4% from the current 2%. For the short-term period, we don’t see any growth in the next few months. I think the gem sector will continue to witness negative growth in the next month also.”
Export of gems and jewellery from the country for the month of January 2009 registered negative growth and declined by 33.94% in dollar term and 20.32% in rupee terms. “There was nothing in store for the gem and jewellery exporters though, as against the expectations of an official rescue package for the sector that could have eased service tax refunds and exempted them from fringe benefit tax for a certain stipulated period,” said Anand James, a senior analyst with Geojit Comtrade.
“In the Interim Budget, the government has totally neglected the issue of unempolyment in the sector.
The current condition is bad involving the lives of 8 lakh workers employed in the cut and polished diamond sector and 15-20 lakh workers employed in the gold jewellery sector,” Mehta said. (source: Financial Express)
The Interim Budget for 2009-10 which was presented in Parliament, extended the period for concessional finance to exporters hit hard by the recession in major global markets. Earlier, the interest subvention of 2% could be availed of till March 2009.
“The interest subvention of 2% on pre- and post-shipment credit for certain employment-oriented sectors, textiles (including handlooms and handicrafts), carpets, leather, gems and jewellery, marine products and SMEs was extended beyond March 31, 2009 to September 30, 2009 involving an additional financial outgo of Rs 500 crore,” said finance minister, Pranab Mukherjee who presented the Interim Budget in the Lok Sabha on Monday.
The domestic gems-and-jewellery industry is going through a difficult phase on the back of softer demand from key export markets such as the US and Europe and, to a lesser extent, Asia.
Reacting to the Interim Budget speech, Vansant Mehta, chairman, Gem and Jewellery Export Promotion Council (GJEPC) told FE: “We expected an increase in the subvention rate to 4% from the current 2%. For the short-term period, we don’t see any growth in the next few months. I think the gem sector will continue to witness negative growth in the next month also.”
Export of gems and jewellery from the country for the month of January 2009 registered negative growth and declined by 33.94% in dollar term and 20.32% in rupee terms. “There was nothing in store for the gem and jewellery exporters though, as against the expectations of an official rescue package for the sector that could have eased service tax refunds and exempted them from fringe benefit tax for a certain stipulated period,” said Anand James, a senior analyst with Geojit Comtrade.
“In the Interim Budget, the government has totally neglected the issue of unempolyment in the sector.
The current condition is bad involving the lives of 8 lakh workers employed in the cut and polished diamond sector and 15-20 lakh workers employed in the gold jewellery sector,” Mehta said. (source: Financial Express)
Castor crop to touch record 11L tonne
Mumbai: The country may witness the record highest castorseed crop at 11 lakh tonne for the 2008-09 season, according to a latest survey conducted by the Solvent Extractors’ Association of India (SEAI).
The total area under castor crop in the country is expected ro be at 8.26 lakh hectare to record an increase of 10% as compared to the previous year. Thus, estimated total production has been estimated at 11 lakh tone, up by 21% as compared to the previous year.
“This is the highest production recorded. Average yield for the year 2008-09 is 1,331 kg per hectare as against 1,216 kg per hectare during 2007-08. It has increased by 9% as compared to previous year,” BV Mehta, executive director, SEAI, said. The association is a broad-based all-India apex body of the solvent extraction industry and practically all working solvent extraction units are its members.
In Gujarat, the total area under castor for the season 2008-09 is expected at 4.51 lakh hectare, up by 27% as compared to the previous year. Area under castor crop increased in north Gujarat (22%) and Saurashtra (25%). Estimated total production for the state is 8.27 lakh tonne, an increased by 27% over previous year. Average yield for the year 2008-09 is 1,834 kg per hectare as against 1,838 kg perhectare for 2007-08.
In Rajasthan, total area for 2008-09 has been estimated at 1.28 lakh hectare, up by 8% as compared to previous year. Estimated production for 2008-09 is at 1.59 lakh tonne, up 12% over the previous year. Average yield for the year 2008-09 is 1,248 kg per hectare, which is 3% higher than the previous year.
In Andhra Pradesh, the total area for 2008-09 is estimated at 1.92 lakh hectare, down by 18% over the previous year. Area under castor crop has decreased at all districts in Andhra Pradesh this year except Kurnool. Estimated production for 2008-09 is at 0.71 lakh tonnes. It has decreased by 15% over the previous year. Average yield for the year 2008-09 is 369 kg per hectare, which is 3% higher than that of previous year.
The SEA Castorseed Oil Promotion Council, an arm of the SEAI, has been undertaking scientific assessment of the castor crop and dissemination this information to trade and industry for the past 4 years. Keen on estimating the crop for castor seeds in Gujarat, Rajasthan and Andhra Pradesh, the body commissioned Nielsen India to conduct a crop estimation study for castor in Gujarat, Rajasthan and Andhra Pradesh. (Source: Financial Express)
The total area under castor crop in the country is expected ro be at 8.26 lakh hectare to record an increase of 10% as compared to the previous year. Thus, estimated total production has been estimated at 11 lakh tone, up by 21% as compared to the previous year.
“This is the highest production recorded. Average yield for the year 2008-09 is 1,331 kg per hectare as against 1,216 kg per hectare during 2007-08. It has increased by 9% as compared to previous year,” BV Mehta, executive director, SEAI, said. The association is a broad-based all-India apex body of the solvent extraction industry and practically all working solvent extraction units are its members.
In Gujarat, the total area under castor for the season 2008-09 is expected at 4.51 lakh hectare, up by 27% as compared to the previous year. Area under castor crop increased in north Gujarat (22%) and Saurashtra (25%). Estimated total production for the state is 8.27 lakh tonne, an increased by 27% over previous year. Average yield for the year 2008-09 is 1,834 kg per hectare as against 1,838 kg perhectare for 2007-08.
In Rajasthan, total area for 2008-09 has been estimated at 1.28 lakh hectare, up by 8% as compared to previous year. Estimated production for 2008-09 is at 1.59 lakh tonne, up 12% over the previous year. Average yield for the year 2008-09 is 1,248 kg per hectare, which is 3% higher than the previous year.
In Andhra Pradesh, the total area for 2008-09 is estimated at 1.92 lakh hectare, down by 18% over the previous year. Area under castor crop has decreased at all districts in Andhra Pradesh this year except Kurnool. Estimated production for 2008-09 is at 0.71 lakh tonnes. It has decreased by 15% over the previous year. Average yield for the year 2008-09 is 369 kg per hectare, which is 3% higher than that of previous year.
The SEA Castorseed Oil Promotion Council, an arm of the SEAI, has been undertaking scientific assessment of the castor crop and dissemination this information to trade and industry for the past 4 years. Keen on estimating the crop for castor seeds in Gujarat, Rajasthan and Andhra Pradesh, the body commissioned Nielsen India to conduct a crop estimation study for castor in Gujarat, Rajasthan and Andhra Pradesh. (Source: Financial Express)
Sunday, February 15, 2009
Minister: B5 palm oil biodiesel to be fully implemented by 2010
Kuala Lumpur: Usage of the mandatory blending of five percent palm oil with diesel (B5) will be fully implemented by 2010, according to Plantation Industries and Commodities Minister Datuk Peter Chin.
The government has approved B5 in the local transport and industrial sectors and it will be phased in to the domestic fuel market starting with government vehicles, he said.
The incentive is set to create demand for an additional 500,000 tonnes of palm oil locally which will be needed to produce palm biodiesel, Chin told Oxford Business Group.
“By increasing demand, palm oil stocks will be used in Malaysia, at a time when uncertainty in the global markets has raised doubts about how export of palm oil will fare this year,” he said.
This, he added, is one of the measures that the ministry, together with agencies under its umbrella, has put into practice.
The Malaysian Palm Oil Board (MPOB) and Malaysian Palm Oil Council (MPOC) both promote palm oil and its products overseas while also providing technical support and information about palm oil products.
Chin said the ministry would continue to monitor developments of biodiesel in major markets overseas.
He also recognised the importance of promoting sustainable development and giving weight to environmental issues.
“The MPOB developed codes of practice for the oil palm industry following consultation with key players in the industry,” he said.
The government is also looking at ways of reducing environmental pollution and contamination, with discussions increasingly focusing on the use of clean development mechanisms and reducing green house gases.
Chin said the codes of practice have been used to form the basis of a sustainability manual which is set to be completed by June this year.
The manual will serve as a point of reference for sustainable practices in the oil palm industry, he said.
In the current economic climate, it is in the companies’ interest to consider ways of reducing costs and improving competitiveness, according to Chin.
The recent merger of Sime Darby, Golden Hope and Guthrie, and also Wilmar International and PPB Oil Palm Group are examples of how companies could work together to meet challenges in the world market, he said.
Oxford Business Group is coming out with “The Report: Malaysia 2009″, the latest of its annual business guides, with comprehensive review of the country’s economy.- Bernama.
(Source: Daily Express.com.my)
The government has approved B5 in the local transport and industrial sectors and it will be phased in to the domestic fuel market starting with government vehicles, he said.
The incentive is set to create demand for an additional 500,000 tonnes of palm oil locally which will be needed to produce palm biodiesel, Chin told Oxford Business Group.
“By increasing demand, palm oil stocks will be used in Malaysia, at a time when uncertainty in the global markets has raised doubts about how export of palm oil will fare this year,” he said.
This, he added, is one of the measures that the ministry, together with agencies under its umbrella, has put into practice.
The Malaysian Palm Oil Board (MPOB) and Malaysian Palm Oil Council (MPOC) both promote palm oil and its products overseas while also providing technical support and information about palm oil products.
Chin said the ministry would continue to monitor developments of biodiesel in major markets overseas.
He also recognised the importance of promoting sustainable development and giving weight to environmental issues.
“The MPOB developed codes of practice for the oil palm industry following consultation with key players in the industry,” he said.
The government is also looking at ways of reducing environmental pollution and contamination, with discussions increasingly focusing on the use of clean development mechanisms and reducing green house gases.
Chin said the codes of practice have been used to form the basis of a sustainability manual which is set to be completed by June this year.
The manual will serve as a point of reference for sustainable practices in the oil palm industry, he said.
In the current economic climate, it is in the companies’ interest to consider ways of reducing costs and improving competitiveness, according to Chin.
The recent merger of Sime Darby, Golden Hope and Guthrie, and also Wilmar International and PPB Oil Palm Group are examples of how companies could work together to meet challenges in the world market, he said.
Oxford Business Group is coming out with “The Report: Malaysia 2009″, the latest of its annual business guides, with comprehensive review of the country’s economy.- Bernama.
(Source: Daily Express.com.my)
Saturday, February 14, 2009
Sugar outlook 2009: Fitch
The outlook for India sugar in 2009 is positive and the sweetener may buck the commodity trend, said Fitch Ratings in its latest assessment of the sugar sector. Sugar price increase was unavoidable because of lower output, the report pointed out.
Prices Range-bound
The report said the worst days for sugar are over, and prices are expected to remain range-bound through various regulatory measures. Sugar is an essential food item of mass consumption. The report maintains a stable outlook for the sector in the current calendar. Domestic rates
Despite the policy of duty-free import of sugar for processing into white sugar for domestic consumption and an export obligation to be fulfilled within 24 months, domestic prices would continue to rise to some degree mainly due to estimated decline in global sugar production and possible global deficit situation, Fitch pointed out.
Bright outlook
While most companies posted losses last year, Fitch expects the profitability of sugar companies to improve this year.
In the short-term to medium term, revenues as well as profitability continue to depend largely on sugar revenues, despite efforts to diversify, the report remarked.
Pointing out that diversified companies that are well integrated (distillery, co-generation) rather than pure sugar companies are well placed to enjoy profitability, Fitch said that growth and contribution of non-sugar business to incremental revenues flowing to the bottom line of sugar companies would remain marginal. (source: The Hindu Business Line)
Prices Range-bound
The report said the worst days for sugar are over, and prices are expected to remain range-bound through various regulatory measures. Sugar is an essential food item of mass consumption. The report maintains a stable outlook for the sector in the current calendar. Domestic rates
Despite the policy of duty-free import of sugar for processing into white sugar for domestic consumption and an export obligation to be fulfilled within 24 months, domestic prices would continue to rise to some degree mainly due to estimated decline in global sugar production and possible global deficit situation, Fitch pointed out.
Bright outlook
While most companies posted losses last year, Fitch expects the profitability of sugar companies to improve this year.
In the short-term to medium term, revenues as well as profitability continue to depend largely on sugar revenues, despite efforts to diversify, the report remarked.
Pointing out that diversified companies that are well integrated (distillery, co-generation) rather than pure sugar companies are well placed to enjoy profitability, Fitch said that growth and contribution of non-sugar business to incremental revenues flowing to the bottom line of sugar companies would remain marginal. (source: The Hindu Business Line)
Cotton body lowers output, demand estimate
Confirming the woes of the cotton economy, the Cotton Advisory Board (CAB) has lowered both the production and demand estimate for the crop season 2008-09 at its meeting held in Mumbai on Friday.
Cut 9%
The production estimate for 2008-09 was lowered by 9 per cent to 340 lakh bales (lb) against 369 lb recorded last year.
Demand was expected to fall sharper by 16 per cent to 280 lb in the year under review against 326 lb registered last year. Reeling under the economic slowdown, mill consumption may fall 4 per cent to 195 lakh bales (203 lakh bales), while that of small scale units was likely to drop 15 per cent to 20 lakh bales (23 lakh bales), according to CAB estimates.
Mr A.B. Joshi, Textile Commissioner, Maharashtra, said apart from unfavourable climatic condition and marginal fall in acreage, the production was affected by red leaf syndrome in some of the States.
Acreage down
Area under cotton cultivation fell marginally to 93.73 lakh hectares (lh) (94.39 lh) as the northern zone registered a drop of 34 per cent to 12.15 lh (14.26 lh). Punjab recorded 11 per cent dip in acreage at 5.37 lh (6.04 lh), Haryana 5.80 per cent to 4.55 lh (4.83 lh) and Rajasthan 34 pr cent at 2.23 lh (3.39 lh).
Cotton coverage in the central zone (Gujarat, Maharashtra and Madhya Pradesh) was down marginally by 0.66 per cent at 62.05 lh (62.46 lh), while in the southern zone including Andhra Pradesh, Karnataka and Tamil Nadu it was up 12 per cent at 18.55 lh (16.59 lh).
AREA UNDER BT
Area under Bt cotton has increased substantially in all the nine States and occupies 69 lh which accounts for 73 per cent of total area covered.
Production in all the States fell sharply except for the southern zone which registered an increase of 13.56 per cent to 67 lb (59 lb). Led by the 20.45 per cent dip in production in Punjab to 17.50 lb (22 lb), the northern zone witnessed a fall of 17 per cent to 39 lb (47 lb). Haryana production was down 12.50 per cent at 14 lb (16 lb) and Rajasthan it dropped 16.67 per cent to 7.50 lb (9 lb).
In Gujarat and Maharashtra the production was down 19.65 per cent and 14.29 per cent to 90 lb (112 lb) and 18 lb (21 lb), while it was static in Maharashtra at 62 lb.
The southern zone recorded a rise of 13.56 per cent in production at 67 lb (59 lb).Yield low
Yield per hectare in Punjab was down 10.53 per cent to 554 kg/hectare (kph) (619 kph), Gujarat 19.48 per cent at 633 kph (786 kph) and Madhya Pradesh 17.56 per cent to 467 kph (567 kph). Yield in Karnataka was higher by 16 per cent at 392 kph (338 kph). Overall the yield was down 7.29 per cent at 526 kph (567 kph).
Cotton Corporation of India has procured about 71 lakh bales as on January-end, while it has sold 12 lakh bales, said Mr S.C. Grover, Chairman and Managing Director, Cotton Corporation of India.
Exports estimate
CAB has lowered the exports estimate by 70 per cent to 50 lb against 85 lb recorded last year. The textile commissioner office has registered request for export of 11 lb while only 7 lb was shipped. Expressing confidence that the export target of 50 lb will be achieved, Mr Joshi said the country is getting good orders from China, Bangladesh and Pakistan. (Source: The Hindu BusinessLine)
Cut 9%
The production estimate for 2008-09 was lowered by 9 per cent to 340 lakh bales (lb) against 369 lb recorded last year.
Demand was expected to fall sharper by 16 per cent to 280 lb in the year under review against 326 lb registered last year. Reeling under the economic slowdown, mill consumption may fall 4 per cent to 195 lakh bales (203 lakh bales), while that of small scale units was likely to drop 15 per cent to 20 lakh bales (23 lakh bales), according to CAB estimates.
Mr A.B. Joshi, Textile Commissioner, Maharashtra, said apart from unfavourable climatic condition and marginal fall in acreage, the production was affected by red leaf syndrome in some of the States.
Acreage down
Area under cotton cultivation fell marginally to 93.73 lakh hectares (lh) (94.39 lh) as the northern zone registered a drop of 34 per cent to 12.15 lh (14.26 lh). Punjab recorded 11 per cent dip in acreage at 5.37 lh (6.04 lh), Haryana 5.80 per cent to 4.55 lh (4.83 lh) and Rajasthan 34 pr cent at 2.23 lh (3.39 lh).
Cotton coverage in the central zone (Gujarat, Maharashtra and Madhya Pradesh) was down marginally by 0.66 per cent at 62.05 lh (62.46 lh), while in the southern zone including Andhra Pradesh, Karnataka and Tamil Nadu it was up 12 per cent at 18.55 lh (16.59 lh).
AREA UNDER BT
Area under Bt cotton has increased substantially in all the nine States and occupies 69 lh which accounts for 73 per cent of total area covered.
Production in all the States fell sharply except for the southern zone which registered an increase of 13.56 per cent to 67 lb (59 lb). Led by the 20.45 per cent dip in production in Punjab to 17.50 lb (22 lb), the northern zone witnessed a fall of 17 per cent to 39 lb (47 lb). Haryana production was down 12.50 per cent at 14 lb (16 lb) and Rajasthan it dropped 16.67 per cent to 7.50 lb (9 lb).
In Gujarat and Maharashtra the production was down 19.65 per cent and 14.29 per cent to 90 lb (112 lb) and 18 lb (21 lb), while it was static in Maharashtra at 62 lb.
The southern zone recorded a rise of 13.56 per cent in production at 67 lb (59 lb).Yield low
Yield per hectare in Punjab was down 10.53 per cent to 554 kg/hectare (kph) (619 kph), Gujarat 19.48 per cent at 633 kph (786 kph) and Madhya Pradesh 17.56 per cent to 467 kph (567 kph). Yield in Karnataka was higher by 16 per cent at 392 kph (338 kph). Overall the yield was down 7.29 per cent at 526 kph (567 kph).
Cotton Corporation of India has procured about 71 lakh bales as on January-end, while it has sold 12 lakh bales, said Mr S.C. Grover, Chairman and Managing Director, Cotton Corporation of India.
Exports estimate
CAB has lowered the exports estimate by 70 per cent to 50 lb against 85 lb recorded last year. The textile commissioner office has registered request for export of 11 lb while only 7 lb was shipped. Expressing confidence that the export target of 50 lb will be achieved, Mr Joshi said the country is getting good orders from China, Bangladesh and Pakistan. (Source: The Hindu BusinessLine)
Thursday, February 12, 2009
MCX revises penalty on delivery defaults
The Multi Commodity Exchange (MCX) has announced a revision in its penalty structure in case of delivery defaults by sellers in most farm commodities, a release from the exchange said. In case of delivery default from the seller’s side, the exchange will impose a penalty of 3 per cent in addition to the difference between the final settlement price and the average of last three highest spot prices in the five previous days after the expiry of the contract, the release said.
Gold crosses Rs 15,000 on fears of prolonged slump
MUMBAI: The rally in gold prices continued on Thursday with the yellow metal crossing the psychological Rs 15,000-mark in Kolkata. The relentless
rally in price has come at a time when the marriage season is in full swing, making the commodity unaffordable for many. In Kolkata trade, gold hit its all-time high of Rs 15,090 per 10 gm. In other metros too, the yellow metal continued its record-breaking spree. In Mumbai, a major gold hub in India, the prices of standard and pure gold shot up by Rs 315 and Rs 320 to Rs 14,705 and Rs 14,770 per 10 gm, respectively, as investors sought safety in the metal. In Delhi, gold advanced by another Rs 350 before closing at Rs 14,900 per 10 gm. It’s not domestic demand which is driving the price surge of the past two days. Traders attribute the rally to the strength in the overseas bullion markets as global slowdown shows little sign of abating. In the international market, the yellow metal continued to rule firm for the second day in a row on fears that the US government’s rescue plan may not revive the economy, fuelling investor demand for bullion and gold-backed exchange traded funds, dealers said. In London, spot gold rose to $942.60/944.60 an ounce at 18:00 pm IST. Gold for February ended up by $30.10 at $943.80 an ounce on the Comex division of the New York Mercantile Exchange. Back home, demand for gold jewellery is set to suffer due to a surge in prices in the midst of marriage season, a bullion merchant in Zaveri Bazaar said. According to him, physical buying will emerge again if prices fall below Rs 12,000 per 10 gm. However, a section of marketmen said that some buying by jewellery fabricators to meet the marriage season demand pushed up the gold prices to some extent. Similar firmness was also noticed in silver on sustained support from upcountry buyers after a steep rise in international prices. In the spot market, ready silver (.999) surged by Rs 750 per kg to Rs 21,550 in Chennai. In Mumbai, the white metal recorded a gain of Rs 445 to Rs 21,370 per kg. (source: Economic Times)
rally in price has come at a time when the marriage season is in full swing, making the commodity unaffordable for many. In Kolkata trade, gold hit its all-time high of Rs 15,090 per 10 gm. In other metros too, the yellow metal continued its record-breaking spree. In Mumbai, a major gold hub in India, the prices of standard and pure gold shot up by Rs 315 and Rs 320 to Rs 14,705 and Rs 14,770 per 10 gm, respectively, as investors sought safety in the metal. In Delhi, gold advanced by another Rs 350 before closing at Rs 14,900 per 10 gm. It’s not domestic demand which is driving the price surge of the past two days. Traders attribute the rally to the strength in the overseas bullion markets as global slowdown shows little sign of abating. In the international market, the yellow metal continued to rule firm for the second day in a row on fears that the US government’s rescue plan may not revive the economy, fuelling investor demand for bullion and gold-backed exchange traded funds, dealers said. In London, spot gold rose to $942.60/944.60 an ounce at 18:00 pm IST. Gold for February ended up by $30.10 at $943.80 an ounce on the Comex division of the New York Mercantile Exchange. Back home, demand for gold jewellery is set to suffer due to a surge in prices in the midst of marriage season, a bullion merchant in Zaveri Bazaar said. According to him, physical buying will emerge again if prices fall below Rs 12,000 per 10 gm. However, a section of marketmen said that some buying by jewellery fabricators to meet the marriage season demand pushed up the gold prices to some extent. Similar firmness was also noticed in silver on sustained support from upcountry buyers after a steep rise in international prices. In the spot market, ready silver (.999) surged by Rs 750 per kg to Rs 21,550 in Chennai. In Mumbai, the white metal recorded a gain of Rs 445 to Rs 21,370 per kg. (source: Economic Times)
Wednesday, February 11, 2009
Crude oil futures slid on weak global cues
Investors globally have found solace in gold in the last one year when major world economies slipped into recession. Sample this: According to World Gold Council data, investment by exchange traded funds (ETFs) in gold was 150 tonnes in the third quarter (July to September-end).
In fact, after the collapse of Lehman Brothers, net inflows increased by $ 7 billion (111 tonnes) in just five trading sessions.
Back home, the situation is different. In the last one year, investment in gold ETFs in India has risen by a mere Rs 303 crore. In January, gold ETFs collected only Rs 30 crore. At present, the total assets under management (AUM) of gold ETFs stand at Rs 721.65 crore.
Investors have shown much more interest in other categories. In the past four months, when interest rates started softening, investors rushed to gilt funds and put in Rs 11,898 crore since October. Gold ETFs attracted only 39 crore in the same period.
This is despite the fact that gold ETFs, which mirror the price of gold, have given a decent return of 18.97 per cent (week ending February, 10) in the last one year.In the same time period, the returns given by equity diversified funds have fallen 47.11 per cent. Even the Bombay Stock Exchange Sensitive Index, or Sensex, has dropped 44.76 per cent. (Source: Press Trust of India)
In fact, after the collapse of Lehman Brothers, net inflows increased by $ 7 billion (111 tonnes) in just five trading sessions.
Back home, the situation is different. In the last one year, investment in gold ETFs in India has risen by a mere Rs 303 crore. In January, gold ETFs collected only Rs 30 crore. At present, the total assets under management (AUM) of gold ETFs stand at Rs 721.65 crore.
Investors have shown much more interest in other categories. In the past four months, when interest rates started softening, investors rushed to gilt funds and put in Rs 11,898 crore since October. Gold ETFs attracted only 39 crore in the same period.
This is despite the fact that gold ETFs, which mirror the price of gold, have given a decent return of 18.97 per cent (week ending February, 10) in the last one year.In the same time period, the returns given by equity diversified funds have fallen 47.11 per cent. Even the Bombay Stock Exchange Sensitive Index, or Sensex, has dropped 44.76 per cent. (Source: Press Trust of India)
MCX Crude oil futures slid on weak global cues
NEW DELHI: The crude oil extended yesterday's losses and fell by another 2.86 per cent in futures trading on Wednesday after it dropped to four-week low in global markets as a US government report showed a bigger-than-expected increase in inventories. O il for the most-active, February contract fell sharply by 2.86 per cent to Rs 1,768 a barrel on the Multi Commodity Exchange, recording business turnover of 1,298 lots. Similarly, March-month contract moved down by 1.45 per cent to Rs 2,100 a barrel in a turnover of 335 lots, while far-month April contract lost 0.96 per cent at Rs 2,281 a barrel, clocking business turnover of 12 lots. Market experts said falling global demand due to worsening recession and mounting stockpiles mainly put pressure on the crude oil prices. Meanwhile, in the overseas market, crude oil for March delivery traded 3 per cent down at $35.91 a barrel on the New York Mercantile Exchange. (source: Press Trust of India)
Gold ETFs glitter, but fail to draw investors
Investors globally have found solace in gold in the last one year when major world economies slipped into recession. Sample this: According to World Gold Council data, investment by exchange traded funds (ETFs) in gold was 150 tonnes in the third quarter (July to September-end).
In fact, after the collapse of Lehman Brothers, net inflows increased by $ 7 billion (111 tonnes) in just five trading sessions.
Back home, the situation is different. In the last one year, investment in gold ETFs in India has risen by a mere Rs 303 crore. In January, gold ETFs collected only Rs 30 crore. At present, the total assets under management (AUM) of gold ETFs stand at Rs 721.65 crore.
Investors have shown much more interest in other categories. In the past four months, when interest rates started softening, investors rushed to gilt funds and put in Rs 11,898 crore since October. Gold ETFs attracted only 39 crore in the same period.
This is despite the fact that gold ETFs, which mirror the price of gold, have given a decent return of 18.97 per cent (week ending February, 10) in the last one year.
In the same time period, the returns given by equity diversified funds have fallen 47.11 per cent. Even the Bombay Stock Exchange Sensitive Index, or Sensex, has dropped 44.76 per cent.
(Source: Business Standard)
In fact, after the collapse of Lehman Brothers, net inflows increased by $ 7 billion (111 tonnes) in just five trading sessions.
Back home, the situation is different. In the last one year, investment in gold ETFs in India has risen by a mere Rs 303 crore. In January, gold ETFs collected only Rs 30 crore. At present, the total assets under management (AUM) of gold ETFs stand at Rs 721.65 crore.
Investors have shown much more interest in other categories. In the past four months, when interest rates started softening, investors rushed to gilt funds and put in Rs 11,898 crore since October. Gold ETFs attracted only 39 crore in the same period.
This is despite the fact that gold ETFs, which mirror the price of gold, have given a decent return of 18.97 per cent (week ending February, 10) in the last one year.
In the same time period, the returns given by equity diversified funds have fallen 47.11 per cent. Even the Bombay Stock Exchange Sensitive Index, or Sensex, has dropped 44.76 per cent.
(Source: Business Standard)
Gold sets new record at Rs 14,550
Gold sky-rocketed to a record-high level of more than Rs 14,500 per 10 gm in the national capital On Wednesday on frantic buying by stockists and jewellery fabricators, triggered by firming global trends.
The precious metal spurted by Rs 310 at Rs 14,550 per 10 gm, a level never seen before, following reports that gold in overseas markets advanced for the first time in three days on concerns that the global economy will deteriorate, lifting demand for the commodity as a haven.
The international gold markets, which normally determine prices on the domestic front here, turned extremely bullish after it surged to $913.70 an ounce on the New York Mercantile Exchange, up from $892.40.
US President Barack Obama said the American economy faces a “full-blown crisis” and government action is necessary now to put people back to work.
An ongoing heavy marriage season here further boosted demand for gold among jewellers.
Market players in world bullion markets are optimistic that the metal would remain on a record-making-and-breaking spree for another three months, before setting a new peak.
Global players such as Goldman Sachs, UBS and funds backed by bullion expect gold prices to soar to $1,000 an ounce by April.
On the domestic front, jewellers and bullion traders say the precious metal may touch the Rs 16,000 per 10 gm level in the next three months.
“Currently, gold prices are extremely volatile. Within a week or so, prices would hover in the horizon of Rs 15,000 per 10 gm level. It may not be a surprise to see gold prices at Rs 16,000 per 10 gm in the next three months,” Gitanjali Group Chairman Mehul Choksi said.
Uncertainty in the global financial market and the rupee movement will be key drivers for gold prices, he said, adding that there has not been a significant fall in demand in his stores due to price rise.
Goldman Sachs and UBS raised their forecast for gold citing increased risk in financial markets and mounting concern that government spending on bank bailouts and economic stimulus will spur inflation.
Gold will touch a record this year as efforts to stem a worsening financial crisis spark “explosive” inflation, Van Eck Associates gold-fund said.
Holdings in the SPDR Gold Trust, the largest exchange- traded fund backed by bullion, also extended gains to a record 881.67 tonnes.
(Source: Press Trust of India)
The precious metal spurted by Rs 310 at Rs 14,550 per 10 gm, a level never seen before, following reports that gold in overseas markets advanced for the first time in three days on concerns that the global economy will deteriorate, lifting demand for the commodity as a haven.
The international gold markets, which normally determine prices on the domestic front here, turned extremely bullish after it surged to $913.70 an ounce on the New York Mercantile Exchange, up from $892.40.
US President Barack Obama said the American economy faces a “full-blown crisis” and government action is necessary now to put people back to work.
An ongoing heavy marriage season here further boosted demand for gold among jewellers.
Market players in world bullion markets are optimistic that the metal would remain on a record-making-and-breaking spree for another three months, before setting a new peak.
Global players such as Goldman Sachs, UBS and funds backed by bullion expect gold prices to soar to $1,000 an ounce by April.
On the domestic front, jewellers and bullion traders say the precious metal may touch the Rs 16,000 per 10 gm level in the next three months.
“Currently, gold prices are extremely volatile. Within a week or so, prices would hover in the horizon of Rs 15,000 per 10 gm level. It may not be a surprise to see gold prices at Rs 16,000 per 10 gm in the next three months,” Gitanjali Group Chairman Mehul Choksi said.
Uncertainty in the global financial market and the rupee movement will be key drivers for gold prices, he said, adding that there has not been a significant fall in demand in his stores due to price rise.
Goldman Sachs and UBS raised their forecast for gold citing increased risk in financial markets and mounting concern that government spending on bank bailouts and economic stimulus will spur inflation.
Gold will touch a record this year as efforts to stem a worsening financial crisis spark “explosive” inflation, Van Eck Associates gold-fund said.
Holdings in the SPDR Gold Trust, the largest exchange- traded fund backed by bullion, also extended gains to a record 881.67 tonnes.
(Source: Press Trust of India)
ICE likely to cut stake in the comex
Faced with a decline in the turnover and thereby, lower valuation of the National Commodity & Derivatives Exchange (NCDEX), Intercontinental Exchange (ICE) is planning to sell a part of its holding in India’s second largest commodity derivatives platform.
According to analysts, one of the largest energy trading platforms may reduce its holding to the regulatory level of 5 per cent.
ICE entered into the Indian commodity market in 2007 with 8 per cent equity buying on the NCDEX at an undisclosed sum. The Atlanta-based exchange, which leads in energy futures globally, logged a $16-million charge to write down the value of its stake in NCDEX, its chief executive Jeffrey Sprecher said in a seminar in New York on Tuesday. The minority stake in NCDEX facilitated ICE in an ongoing dialogue with Indian officials looking to learn about markets trading and price discovery, Sprecher added.
With commodity prices soaring last year, the government of India suspended futures trading in several agricultural commodities including the most active contracts like soyoil and pulses.
Source: Business Standard)
According to analysts, one of the largest energy trading platforms may reduce its holding to the regulatory level of 5 per cent.
ICE entered into the Indian commodity market in 2007 with 8 per cent equity buying on the NCDEX at an undisclosed sum. The Atlanta-based exchange, which leads in energy futures globally, logged a $16-million charge to write down the value of its stake in NCDEX, its chief executive Jeffrey Sprecher said in a seminar in New York on Tuesday. The minority stake in NCDEX facilitated ICE in an ongoing dialogue with Indian officials looking to learn about markets trading and price discovery, Sprecher added.
With commodity prices soaring last year, the government of India suspended futures trading in several agricultural commodities including the most active contracts like soyoil and pulses.
Source: Business Standard)
Transaction charge row: NCDEX to move apex court
The National Commodity & Derivatives Exchange (NCDEX) has decided to move the Supreme Court against the Bombay High Court order on the Forward Market Commission’s (FMC’s) jurisdiction over the exchange’s transaction charges. The decision was taken at its board meeting on Tuesday.
A source close to the development said that the exchange, India’s second largest commodity derivatives platform, would challenge the Bombay High Court’s order shortly in the Supreme Court, but the ground on which it is planning to move the apex court was not ascertained.
The commodity market regulator, the Forward Markets Commission (FMC), had not approved the exchange’s decision to drastically cut charges for trading in the evening session. NCDEX challenged the powers of the regulator saying that transaction charges fell in the jurisdiction of the exchange.
NCDEX officials, including MD & CEO Ramalinga Ramaseshan and Chief Business Officer Unupom Kausik, were tight-lipped and denied to comment on the development.
“What is discussed in the exchange’s internal board meet need not be disclosed to the media,” Ramaseshan said.
“We cannot say anything,” was the response of Kausik.
The High Court had on February 5 rejected the NCDEX plea on the lack of merit in the writ petition and refused to admit it. The Court had also directed FMC to decide the matter within two weeks from the day of pronouncement of this judgement.
The HC had observed that the decision of such expert bodies should be left to the authorities empowered to take such decisions. The questions with regard to the jurisdiction of the regulator over transaction charges is seen to have a direct bearing on the agrarian economy and on the business of agricultural as well as non-agricultural commodities, especially those traded on the NCDEX.
The court had further said that these are important and larger issues relatable to the economy and commercial principles, which should be examined properly by an expert body and judicial interference preventing such a process would neither be just nor fair, the HC said.
The dispute between the NCDEX and FMC started on January 28, after the exchange re-issued its circular on revision of transaction charges, which was stayed by the regulator.
On December 29, 2008, the exchange had rationalised transaction charges up to Rs 3 per lakh of value of all trades in all commodities between 10 am and 3.30 pm. Also, the transaction charges for the period between 3.30 pm and 11.30 pm were brought down to 5 paise per lakh of value of all trades in all commodities. This revision was stayed from implementation by the FMC.
Later, on January 28, the exchange re-issued the circular with a slight modification in the time to 5 pm. This decision was also disallowed by the FMC and it was challenged in the HC by the NCDEX.
Meanwhile, the NCDEX withdrew its circular on February 7, following the HC order.
(source: Business Standard)
A source close to the development said that the exchange, India’s second largest commodity derivatives platform, would challenge the Bombay High Court’s order shortly in the Supreme Court, but the ground on which it is planning to move the apex court was not ascertained.
The commodity market regulator, the Forward Markets Commission (FMC), had not approved the exchange’s decision to drastically cut charges for trading in the evening session. NCDEX challenged the powers of the regulator saying that transaction charges fell in the jurisdiction of the exchange.
NCDEX officials, including MD & CEO Ramalinga Ramaseshan and Chief Business Officer Unupom Kausik, were tight-lipped and denied to comment on the development.
“What is discussed in the exchange’s internal board meet need not be disclosed to the media,” Ramaseshan said.
“We cannot say anything,” was the response of Kausik.
The High Court had on February 5 rejected the NCDEX plea on the lack of merit in the writ petition and refused to admit it. The Court had also directed FMC to decide the matter within two weeks from the day of pronouncement of this judgement.
The HC had observed that the decision of such expert bodies should be left to the authorities empowered to take such decisions. The questions with regard to the jurisdiction of the regulator over transaction charges is seen to have a direct bearing on the agrarian economy and on the business of agricultural as well as non-agricultural commodities, especially those traded on the NCDEX.
The court had further said that these are important and larger issues relatable to the economy and commercial principles, which should be examined properly by an expert body and judicial interference preventing such a process would neither be just nor fair, the HC said.
The dispute between the NCDEX and FMC started on January 28, after the exchange re-issued its circular on revision of transaction charges, which was stayed by the regulator.
On December 29, 2008, the exchange had rationalised transaction charges up to Rs 3 per lakh of value of all trades in all commodities between 10 am and 3.30 pm. Also, the transaction charges for the period between 3.30 pm and 11.30 pm were brought down to 5 paise per lakh of value of all trades in all commodities. This revision was stayed from implementation by the FMC.
Later, on January 28, the exchange re-issued the circular with a slight modification in the time to 5 pm. This decision was also disallowed by the FMC and it was challenged in the HC by the NCDEX.
Meanwhile, the NCDEX withdrew its circular on February 7, following the HC order.
(source: Business Standard)
Unresolved tariff puts brass scrap importers in fix
Mumbai: The situation has worsened for importers of brass scrap in the country as some parcels of imported brass scrap at ports in the western region are under detention due to the unresolved issue of discrepancy in the valuation of tariff value.
The customs and revenue department has revised the tariff value to $3,252 per tonne on December 31, from $4,082 fixed on December 15, while the supply of brass scrap is available openly at $1,700-$1,800 a tonne in the international market.
In spite of strong presentation made by trade and industry bodies, the customs department issued a fresh notification (No141/2008 (NT) dated December 31, 2008) quoting brass scrap value as $3,252 per tonne which is higher than international price, trade sources said. “The department is demanding duty payable on the basis of the latest notification which set the tariff value of brass scrap higher than the price of brass scrap available in the international market,” Rohit Mehta, director, Bombay Metal Exchange (BME) , told FE.
Import parcels of more than 500 tonne are under detention and demurrage at Kandla and Nhava Sheva ports for the past two months mainly due to the failure to arrive at a consensus on the discrepancy in the valuation of the tariff value.
“Some importers have cancelled their future consignments and a few have settled transactions by paying penalties,” a local broker said. Importers are awaiting a clarification and a revised tariff value. “If the custom department fails to take timely action, over 5,000 industrial units in western India may be forced to close down,” sources said. The BME has made several representations and had meetings with the senior officials of the customs department and even met with the Prime Minister regarding the issue of the discrepancy in the valuation of tariff value.
“Despite our requests, the department has not disclosed the mechanism used to derive the tariff value for brass scrap when the price for a virgin metal - copper- is around $3,000 a tonne. Brass scrap is basically alloy of copper (copper + zinc = brass) which contains approximately 60% of copper.
“Since we are more concerned on the fair value of scrap, we need to take at least price discount of 20% - 25% on scrap and even with that calculation the price of brass scrap should not be more than $1,900, the current price in the international market,”Mehta said. (03.01.2009)
The customs and revenue department has revised the tariff value to $3,252 per tonne on December 31, from $4,082 fixed on December 15, while the supply of brass scrap is available openly at $1,700-$1,800 a tonne in the international market.
In spite of strong presentation made by trade and industry bodies, the customs department issued a fresh notification (No141/2008 (NT) dated December 31, 2008) quoting brass scrap value as $3,252 per tonne which is higher than international price, trade sources said. “The department is demanding duty payable on the basis of the latest notification which set the tariff value of brass scrap higher than the price of brass scrap available in the international market,” Rohit Mehta, director, Bombay Metal Exchange (BME) , told FE.
Import parcels of more than 500 tonne are under detention and demurrage at Kandla and Nhava Sheva ports for the past two months mainly due to the failure to arrive at a consensus on the discrepancy in the valuation of the tariff value.
“Some importers have cancelled their future consignments and a few have settled transactions by paying penalties,” a local broker said. Importers are awaiting a clarification and a revised tariff value. “If the custom department fails to take timely action, over 5,000 industrial units in western India may be forced to close down,” sources said. The BME has made several representations and had meetings with the senior officials of the customs department and even met with the Prime Minister regarding the issue of the discrepancy in the valuation of tariff value.
“Despite our requests, the department has not disclosed the mechanism used to derive the tariff value for brass scrap when the price for a virgin metal - copper- is around $3,000 a tonne. Brass scrap is basically alloy of copper (copper + zinc = brass) which contains approximately 60% of copper.
“Since we are more concerned on the fair value of scrap, we need to take at least price discount of 20% - 25% on scrap and even with that calculation the price of brass scrap should not be more than $1,900, the current price in the international market,”Mehta said. (03.01.2009)
Tuesday, February 10, 2009
Global gold futures trading turnover increases 80% in ’08
Mumbai: Futures and options trading of gold on the global exchanges have increased by 80% in 2008 to a record $5.1 trillion and trading of silver increased by 60% to a record $1.2 trillion.
The bulk of trading in gold and silver takes place on the over-the-counter (OTC) market, predominantly in London. Exchange-traded transactions have steadily grown in recent years with Commex in New York, Tocom in Tokyo and more recently MCX in India generating the bulk of activity.
Total turnover of gold including OTC and exchange trading has increased by 58% to a record $20.2 trillion in 2008 from 12.8 trillion in 2007. Silver trading also increased 39% during the year to a record $2.6 trillion from 1.8 trillion in 2007. The growth in turnover was partly due to an increase in prices of precious metals during the year with gold posting an all time high in March of $1,011 per ounce, according to London-based IFSL's Bullion Markets 2009 report.
International Financial Services, London (IFSL) is a private sector organisation, with nearly 40 years experience of promoting the UK-based financial services industry throughout the world.
Gold and silver trading has posted record activity since the start of the credit crisis. The traditional "safe-haven" appeal of precious metals has attracted many investors to this asset class. Exchange traded gold and silver funds have been the strongest source of growth in demand since their introduction in 2003, report said.
The OTC market accounted for nearly three-quarters of gold trading and 56% of silver trading. Most of this activity was transacted through the LBMA (London Bullion Market Association). Daily reported net trading in gold on the LBMA averaged $20 billion in the first 11 months of 2008, up 45% on the same period last year. Daily trading in silver on the LBMA increased 32% to $2 billion. (13.01.2009)
The bulk of trading in gold and silver takes place on the over-the-counter (OTC) market, predominantly in London. Exchange-traded transactions have steadily grown in recent years with Commex in New York, Tocom in Tokyo and more recently MCX in India generating the bulk of activity.
Total turnover of gold including OTC and exchange trading has increased by 58% to a record $20.2 trillion in 2008 from 12.8 trillion in 2007. Silver trading also increased 39% during the year to a record $2.6 trillion from 1.8 trillion in 2007. The growth in turnover was partly due to an increase in prices of precious metals during the year with gold posting an all time high in March of $1,011 per ounce, according to London-based IFSL's Bullion Markets 2009 report.
International Financial Services, London (IFSL) is a private sector organisation, with nearly 40 years experience of promoting the UK-based financial services industry throughout the world.
Gold and silver trading has posted record activity since the start of the credit crisis. The traditional "safe-haven" appeal of precious metals has attracted many investors to this asset class. Exchange traded gold and silver funds have been the strongest source of growth in demand since their introduction in 2003, report said.
The OTC market accounted for nearly three-quarters of gold trading and 56% of silver trading. Most of this activity was transacted through the LBMA (London Bullion Market Association). Daily reported net trading in gold on the LBMA averaged $20 billion in the first 11 months of 2008, up 45% on the same period last year. Daily trading in silver on the LBMA increased 32% to $2 billion. (13.01.2009)
Bumper crop in AP, TN likely to pull down turmeric prices
Mumbai: Turmeric spot and futures prices in the domestic market turned bearish this week and may continue to remain low in the next one month or so on expected higher fresh inflows in the states of Andhra Pradesh and Tamil Nadu in view of good crop prospects. NCDEX April futures fell by nearly Rs 100 to trade at Rs 3,665 per quintal in the past one week, but spot prices at Nizamabad were higher at Rs 3,921 per quintal last week on scattered demand.
In 2009, the overall crop is expected to be better than 2008 at around 45-48 lakh bags. Acreage in Tamil Nadu, especially in Erode, is expected to increase by nearly 25% as the farmers in the region have realised better profits from the previous crop, trade sources said.
“Estimates for 2009 being better,may pressurise the prices once the fresh inflows commence at the terminal markets,” an analyst with Angel Commodities said. Fresh arrivals are expected to commence by the last week of January and would reach to peak by the end of February or March, a local trader said. Fresh inflows normally commence after Pongal celebrations.
“Higher supplies and anticipated low export demand would definitely affect the market sentiment. Currently, there are some enquiries from north India, but very few deals heard. I think stockists’ buying will come in the month of March and April. Till that time prices will remain under pressure,” he said.
Production in the year 2008 was lower at about 40-42 lakh bags. The decline in production was on account of erratic and inadequate rainfall at major growing areas like Nizamabad and Erode. “Technically, prices are expected to trade in the range of Rs 2,000-Rs 3,500 in the first half of 2009. During the second half, prices may be determined by the export and domestic demand prevailing at that time,” an analyst said.
The third quarter of 2008 witnessed a decline in exports due to the global financial turmoil which led to decline in demand and consumption of the commodity. (16.01.2009)
In 2009, the overall crop is expected to be better than 2008 at around 45-48 lakh bags. Acreage in Tamil Nadu, especially in Erode, is expected to increase by nearly 25% as the farmers in the region have realised better profits from the previous crop, trade sources said.
“Estimates for 2009 being better,may pressurise the prices once the fresh inflows commence at the terminal markets,” an analyst with Angel Commodities said. Fresh arrivals are expected to commence by the last week of January and would reach to peak by the end of February or March, a local trader said. Fresh inflows normally commence after Pongal celebrations.
“Higher supplies and anticipated low export demand would definitely affect the market sentiment. Currently, there are some enquiries from north India, but very few deals heard. I think stockists’ buying will come in the month of March and April. Till that time prices will remain under pressure,” he said.
Production in the year 2008 was lower at about 40-42 lakh bags. The decline in production was on account of erratic and inadequate rainfall at major growing areas like Nizamabad and Erode. “Technically, prices are expected to trade in the range of Rs 2,000-Rs 3,500 in the first half of 2009. During the second half, prices may be determined by the export and domestic demand prevailing at that time,” an analyst said.
The third quarter of 2008 witnessed a decline in exports due to the global financial turmoil which led to decline in demand and consumption of the commodity. (16.01.2009)
New export prospects drive cotton prices up
Mumbai: Amid the prevailing credit crunch and concerns over the consumption of raw cotton in the country for the current season, there is good news for the cotton farmers that a few exporters and south India-based mills have started their fresh buying from the open market. As a result, raw cotton prices, including spot and futures, have showed some upward movement at domestic markets over the past few days. The domestic prices are almost at par with those at the New York market and there is a possibility of some export deals, sources said.
“There have been some fresh buying enquiries from Bangladesh and Indonesia as Indian prices are closed to international markets. I think we expect some export deals in the next 10-12 days,” Saurin Parekh, a leading trader said.
Spot prices of Shankar 6 (Gujarat) have gone up by Rs 100-200 to trade in the range of Rs 21,200 to Rs 21,600 per candy (1 candy=356 kgs). At the National Commodity & Derivatives Exchange Ltd (NCDEX), April 2009 contracts prices also gained some ground, contracts breached the Rs 500-mark and trades are at Rs 509 per 20 kg on Saturday, showing an increase of 5%-6% during the current month.
“There is talk that a few exporters and south India-based mills have bought about 40,000 bales last week. China and Bangladesh may buy some quantity from India soon,” Kirit Mehta, a local broker said. (1 bale=170 kilograms) Cotton prices at the New York market are currently hovering around 52-53 cents per pound, sources said.
China, the world’s biggest buyer, may import at least 25% less as the global recession erodes demand for textiles, researchers at the Chinese Academy of Agricultural Sciences said. Imports by China may total 1.5 million metric tonne in 2009. China so far purchased 1.94 million tonne till November 2008 (11 months). “As far as domestic mills are concerned, there is forced-buying and they are purchasing cotton for their immediate requirement as they have no stocks-on-hand,” a local broker said.
Raw cotton prices may remain steady at higher levels over the next few days on export buying interest amid firm international trend, an analyst said. Daily arrivals in the country have reached to 2.4 lakh bales as on January 24. All- India arrivals as on January 24 are reported at 166 lakh bales for the current season, down from 195.40 lakh bales last season.n(28.01.2009)
“There have been some fresh buying enquiries from Bangladesh and Indonesia as Indian prices are closed to international markets. I think we expect some export deals in the next 10-12 days,” Saurin Parekh, a leading trader said.
Spot prices of Shankar 6 (Gujarat) have gone up by Rs 100-200 to trade in the range of Rs 21,200 to Rs 21,600 per candy (1 candy=356 kgs). At the National Commodity & Derivatives Exchange Ltd (NCDEX), April 2009 contracts prices also gained some ground, contracts breached the Rs 500-mark and trades are at Rs 509 per 20 kg on Saturday, showing an increase of 5%-6% during the current month.
“There is talk that a few exporters and south India-based mills have bought about 40,000 bales last week. China and Bangladesh may buy some quantity from India soon,” Kirit Mehta, a local broker said. (1 bale=170 kilograms) Cotton prices at the New York market are currently hovering around 52-53 cents per pound, sources said.
China, the world’s biggest buyer, may import at least 25% less as the global recession erodes demand for textiles, researchers at the Chinese Academy of Agricultural Sciences said. Imports by China may total 1.5 million metric tonne in 2009. China so far purchased 1.94 million tonne till November 2008 (11 months). “As far as domestic mills are concerned, there is forced-buying and they are purchasing cotton for their immediate requirement as they have no stocks-on-hand,” a local broker said.
Raw cotton prices may remain steady at higher levels over the next few days on export buying interest amid firm international trend, an analyst said. Daily arrivals in the country have reached to 2.4 lakh bales as on January 24. All- India arrivals as on January 24 are reported at 166 lakh bales for the current season, down from 195.40 lakh bales last season.n(28.01.2009)
Basmati export cargos under siege
Mumbai: Export shipments of Basmati rice have been held up at the western ports, mainly at Kandla and Mundra, over the past two months due to adverse impact of export tax imposed by the government and a higher minimum export price (MEP).
Over 60,000 tonne of export cargoes including containers and break bulk, are awaiting clearance from Indian sellers due to uncertainty in the rice trade on expectations of an abolition of the export duty, said trade sources.
Export shipments of Basmati and the Pusa 1121 variety were supposed to leave for Saudi Arabia and Iran in December. Nine parties from the Middle East and the European Union (EU) have refused to take delivery of the consignments in the pipeline at various destinations. Many others may follow suit, trade sources added.
“On one hand, exports are falling and on the other, buyers are re-negotiating agreed prices to exploit the situation to their advantage and this has increased the exporters’ woes,” said Vijay Setia, president, All India Rice Exporters Association.
The imposition of the export tax and a higher MEP has led to Pakistani exporters snatch India’s share at the international markets as their Basmati rice continues to be considerably lower by $300-$400 per tonne vis-à-vis India’s offer. “Saudi Arabia and the EU have already shown great inclination towards Pakistani Basmati in view of our higher prices,” he said.
“The price of Indian Basmati is around $1,250 per tonne, while Pakistan offers the same variety at $900-$1,000 per tonne. Indian varieties would be available at $1,050 per tonne or even lower, if the government abolishes the export duty,” said a leading broker.
The government imposed an export duty Rs 8,000 per tonne on Basmati and fixed an MEP of $1,200 per tonne from April 2008. “We have requested the government to remove the export tax and reduce the MEP to $1,000 per tonne,” Setia said. Despite the fact that procurement is expected to exceed the target set by the government this year due to a good Basmati crop, the government has so far not considered the industry’s request for the removal of the tax and a reduction in MEP which may help the trade to improve sales and complete pending payments to 50%-60% of farmers and commission agents. (17.01.2009)
Over 60,000 tonne of export cargoes including containers and break bulk, are awaiting clearance from Indian sellers due to uncertainty in the rice trade on expectations of an abolition of the export duty, said trade sources.
Export shipments of Basmati and the Pusa 1121 variety were supposed to leave for Saudi Arabia and Iran in December. Nine parties from the Middle East and the European Union (EU) have refused to take delivery of the consignments in the pipeline at various destinations. Many others may follow suit, trade sources added.
“On one hand, exports are falling and on the other, buyers are re-negotiating agreed prices to exploit the situation to their advantage and this has increased the exporters’ woes,” said Vijay Setia, president, All India Rice Exporters Association.
The imposition of the export tax and a higher MEP has led to Pakistani exporters snatch India’s share at the international markets as their Basmati rice continues to be considerably lower by $300-$400 per tonne vis-à-vis India’s offer. “Saudi Arabia and the EU have already shown great inclination towards Pakistani Basmati in view of our higher prices,” he said.
“The price of Indian Basmati is around $1,250 per tonne, while Pakistan offers the same variety at $900-$1,000 per tonne. Indian varieties would be available at $1,050 per tonne or even lower, if the government abolishes the export duty,” said a leading broker.
The government imposed an export duty Rs 8,000 per tonne on Basmati and fixed an MEP of $1,200 per tonne from April 2008. “We have requested the government to remove the export tax and reduce the MEP to $1,000 per tonne,” Setia said. Despite the fact that procurement is expected to exceed the target set by the government this year due to a good Basmati crop, the government has so far not considered the industry’s request for the removal of the tax and a reduction in MEP which may help the trade to improve sales and complete pending payments to 50%-60% of farmers and commission agents. (17.01.2009)
DTC slashes rough diamond supplies for Jan
Mumbai: Diamond Trading Company (DTC), De Beers' sales arm, has decided to offer the smallest sight (supply) of rough diamonds to its sight holders with an estimated value of $80-$100 million for the month of January. "The release of small sight for the current month is not a surprise for the market. We expected the supply cut as a result of lower demand. It is similar to the value of the December sight," a representative of a leading Indian sight holder said. This is the first sight of the calendar year 2009. The company reduced the December 2008 sight to $100 million from $300 million for the November sight, as demand has dropped significantly in the current economic scenario, market sources said.
"In view of the substantially decreased level of sight holder demand for new rough diamonds, we anticipate reducing the Intentions To Offer (ITO) offered to sight holders by roughly 50% for the remainder of the current ITO period, the January, February and March/April 2009 sights, although this will be assessed on a sight-by-sight basis," Varda Shine, managing director of DTC, said last week. Imports of rough diamonds into the country will remain low in the next month as the major industry players have some stock-on-hand, said Sanjay Kothari, ex-chairman of the Gems and Jewellery Export promotion Council. DTC has changed the way in which it offered goods to each sight holder for this month’s sight, according to Rapaport Newswire reports.
"In view of the substantially decreased level of sight holder demand for new rough diamonds, we anticipate reducing the Intentions To Offer (ITO) offered to sight holders by roughly 50% for the remainder of the current ITO period, the January, February and March/April 2009 sights, although this will be assessed on a sight-by-sight basis," Varda Shine, managing director of DTC, said last week. Imports of rough diamonds into the country will remain low in the next month as the major industry players have some stock-on-hand, said Sanjay Kothari, ex-chairman of the Gems and Jewellery Export promotion Council. DTC has changed the way in which it offered goods to each sight holder for this month’s sight, according to Rapaport Newswire reports.
Outlook for base metals remains weak in near-term: StanChart
Mumbai: The price outlook for base metals is expected to remain weak in the near-term due to poor demand conditions, stated a Standard Chartered Bank report. Base metal prices have remained under downward pressure in the last few weeks, with inventories building sharply on the London Metal Exchange (LME) and demand conditions continue to worsen in most parts of the global economy.
“For the base metals complex, we maintain our view that prices are generally close to a floor (determined by operating cost levels), but we are looking for more weakness in the next few months due to poor demand conditions,” said a latest monthly analysis of commodity trends released by Standard Chartered Bank.
Copper prices could head below $3,000 per tonne in the months ahead as LME inventories rise and producers struggle to realign output levels with demand. The prospects for aluminium over the next few months are pretty bleak. Demand has dropped further in the past few months and producers are reluctant to cut back. Price may average $1,420 per tonne for the first quarter in 2009, the report said.
“Our view on nickel has not changed in the past few weeks. We continue to believe that prices will trend lower in the weeks ahead. Problems for the industry include the large amount of inventory accumulated on the LME,” the report added.
The worst is not over for the zinc industry, as prices could head back towards the $1,000-a-tonne level unless demand improves. Tin will ultimately be one of the better-performing base metals this year. For the time being, though the bank expects weak demand to be a key driver keeping prices subdued for the next few months at least.
For base metals, the price trend in the second half of 2009 is expected to be broadly upwards. Copper, lead and tin should rally significantly, while aluminium and nickel prices will likely be subdued given high stock levels. end
“For the base metals complex, we maintain our view that prices are generally close to a floor (determined by operating cost levels), but we are looking for more weakness in the next few months due to poor demand conditions,” said a latest monthly analysis of commodity trends released by Standard Chartered Bank.
Copper prices could head below $3,000 per tonne in the months ahead as LME inventories rise and producers struggle to realign output levels with demand. The prospects for aluminium over the next few months are pretty bleak. Demand has dropped further in the past few months and producers are reluctant to cut back. Price may average $1,420 per tonne for the first quarter in 2009, the report said.
“Our view on nickel has not changed in the past few weeks. We continue to believe that prices will trend lower in the weeks ahead. Problems for the industry include the large amount of inventory accumulated on the LME,” the report added.
The worst is not over for the zinc industry, as prices could head back towards the $1,000-a-tonne level unless demand improves. Tin will ultimately be one of the better-performing base metals this year. For the time being, though the bank expects weak demand to be a key driver keeping prices subdued for the next few months at least.
For base metals, the price trend in the second half of 2009 is expected to be broadly upwards. Copper, lead and tin should rally significantly, while aluminium and nickel prices will likely be subdued given high stock levels. end
Dalian Commodity Exchange plans live pigs futures
Mumbai: The Dalian Commodity Exchange (DCE) is expecting a prominent prospect of soon launching of live pigs futures. The exchange had worked out a standardised contract for pig futures that awaited the green light from Chinese regulators. The exchange has been mulling launch of the futures since 2006. However, it is difficult to establish standards for breeding, delivery and quarantine of pigs. The regulators are cautious about the matter and thus the futures have not debuted by far.
The Chinese futures industry has noticed that it was for the first time that a document of the CPC Central Committee and State Council of China referred to the expression of stabilising the development of the pig industry through futures transactions. “The CPC Central Committee and State Council recently issued several opinions on promoting agriculture in 2009 continuously by increasing peasants’ income and stable development, which referred to ‘adopting such measures as market early warning, reserve adjustment, additional insurances, and futures transactions to stabilise the development of the pig industry’,” as stated in the circular issued by the exchange on its web site. The introduction of live pig futures will help stabilise pork production.
Currently, the exchange’s listed futures products are non-genetically modified soybean, or soybean No.1, genetically modified soybean, or soybean No.2, soybean meal, soybean oil, corn, LLDPE, RBD palm oil and malting barley.
“In 2009, the DCE will continue to push forward trading goods and regulation innovations on the safety and soundness basis by focusing on providing services to the market, the industry and play the role of a market,” Liu Xingqiang, president and CEO, DCE, said.
In 2008, exchange witnessed an annual transaction of 638 million contracts with a turnover of 27.49 trillion yuan, an increase of 71.95% and 130.49% year-on-year respectively, which accounted for 46.80% and 38.22% of the national market.
The Chinese futures industry has noticed that it was for the first time that a document of the CPC Central Committee and State Council of China referred to the expression of stabilising the development of the pig industry through futures transactions. “The CPC Central Committee and State Council recently issued several opinions on promoting agriculture in 2009 continuously by increasing peasants’ income and stable development, which referred to ‘adopting such measures as market early warning, reserve adjustment, additional insurances, and futures transactions to stabilise the development of the pig industry’,” as stated in the circular issued by the exchange on its web site. The introduction of live pig futures will help stabilise pork production.
Currently, the exchange’s listed futures products are non-genetically modified soybean, or soybean No.1, genetically modified soybean, or soybean No.2, soybean meal, soybean oil, corn, LLDPE, RBD palm oil and malting barley.
“In 2009, the DCE will continue to push forward trading goods and regulation innovations on the safety and soundness basis by focusing on providing services to the market, the industry and play the role of a market,” Liu Xingqiang, president and CEO, DCE, said.
In 2008, exchange witnessed an annual transaction of 638 million contracts with a turnover of 27.49 trillion yuan, an increase of 71.95% and 130.49% year-on-year respectively, which accounted for 46.80% and 38.22% of the national market.
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