The Cotton Association of India notes with disappointment the movement by certain sectors of the cotton chain to restrict and even ban Cotton exports. Such recommendations if implemented would bring the country back to the pre-liberalisation era of the 1980’s and early 1990’s.
Any such move will adversely affect the interest of the nation in general and that of the Indian farmer in particular. While the Indian farmer has the protection of a guaranteed MSP, this should not be the reason to prevent him realising a value for his produce which is equal to his counterpart in USA, China, Uzbekistan or several African nations.
India is expected to produce 305 lakh bales and import 7 lakh bales in the 2009-10 season and therefore despite exporting close to 70 lakh bales, after providing for domestic consumption of 240 lakh bales the season will end with a closing stock of around 73.50 lakh bales which will provide for a healthy 3.5 months of consumption.
Local prices have risen lately only in reaction to high prices in the international markets which have gone up by around 15 % in the last one month. It is noteworthy that Indian prices have gone up by less than 10% in the same period.
Unreasonably pessimistic estimates of the crop in a season which has witnessed the highest cotton acreage in history ( 100 lakh hectares) will only cause panic in the market and lead to higher prices.
Despite the rise in prices locally, Indian mills continue to get cotton cheaper than almost any of their counterparts in the world. Over and above this Indian mills have the option to import cotton without any restrictions and nil import duty unlike their competing counterparts in other countries for eg. China where mills have to face quota restrictions, duties and local taxes to import cotton.
It is highly inappropriate that when the spinning industry does not possess adequate capacity to process all the raw cotton produced in the country it should propose any restriction on export of the available surplus. Such a step would only result in the Indian farmer subsidising the Indian spinner.
The theory of ‘value added’ being raised is self contradicting. While cotton is the raw material to make yarn which is spun from it, yarn itself is the raw material for fabric and garments. Both yarn and fabric continue to be freely exportable. However, if one goes by the ‘value added’ theory this should not be the case.
Cotton acreage which has seen a rising trend recently will receive a setback if farmers do not receive a fair price as per international levels as a result of the proposed restrictions on exports.
Reports emerging from the upcountry markets show that this year is again going to see a high quality crop which will be available till the end of the season.
The country is likely to see a very comfortable stock to use ratio of 0.24 at the end of the season. While comparing the ratios with that of other countries one needs to bear in mind that India is a cotton producing country unlike Bangladesh, Taiwan etc which do not produce any cotton. Again India is a net exporting country unlike China, Pakistan or Turkey which are all net importing countries. Also the ratio for India pertains to the October-September period in comparison to the International norm of August-July period. In fact of late, cotton begins to arrive in India even before the statistical season commences on 1st October.
All in all the cotton season 2009-2010 promises to be one with a comfortable position of availability both for the domestic and export markets.
Friday, November 13, 2009
Tuesday, October 27, 2009
Latest Cotton Estimate
Cotton Association of India (CAI) released its September estimates (as on 30th September 2009) of the Cotton Crop for the season 2009-10. CAI estimated the Cotton Crop for the new season at 312.75 lakh bales, marginally higher than last months estimates. The projected Balance Sheet drawn by the CAI for the year 2009-10, estimated the total cotton supply at 391.25 lakh bales, while the domestic consumption was estimated at 250.00 lakh bales, thus leaving a surplus of 141.25 lakh bales. The CAI estimated the cotton exports during 2009-10 season at 70.00 lakh bales. A statement containing the State-wise estimates of Crop and Balance Sheet for the season 2009-10 is enclosed.The impact of flood situation in the States of Andhra Pradesh and Karnataka has not been severe. Yield is a cause of concern because of erratic rains although any decrease in yield is likely to be made up by historical high acreage under cotton close to 100 lakh hectares. Even with higher exports estimated for this season, carry-over stock at the end of the season would be quite comfortable resulting in one of the highest stock-to-use ratio in recent times.
Wednesday, July 22, 2009
MCX resumes trading in gasoline futures
Mumbai: Multi Commodity Exchange of India Ltd (MCX) on Wednesday launched its futures trading in gasoline contracts. MCX is the first exchange in the country to launch the full basket of energy products including crude oil, heating oil and natural gas.
Initially, Gasoline July, August and September 2009 contracts are available for futures trading from Wednesday. On the first day of trading, July, August and September contracts prices were traded at Rs 93, Rs 92.25 and Rs 88.85 per US gallon (3.78 litre). “After crude oil and natural gas futures, gasoline contracts will be the better option in the energy basket for trading as gasoline prices share a great correlation with crude oil prices world over,” a leading analyst said. “The correlation is over 90%. To make the most of this, refiners in developed countries use crude oil and gasoline futures contracts collectively to lock-in their refinery margin. The same can be done for heating oil also as price correlation in that case is around 99%,” he said.
At present, the New York Mercantile Exchange has liquid contracts in gasoline. (Source: FE).
Initially, Gasoline July, August and September 2009 contracts are available for futures trading from Wednesday. On the first day of trading, July, August and September contracts prices were traded at Rs 93, Rs 92.25 and Rs 88.85 per US gallon (3.78 litre). “After crude oil and natural gas futures, gasoline contracts will be the better option in the energy basket for trading as gasoline prices share a great correlation with crude oil prices world over,” a leading analyst said. “The correlation is over 90%. To make the most of this, refiners in developed countries use crude oil and gasoline futures contracts collectively to lock-in their refinery margin. The same can be done for heating oil also as price correlation in that case is around 99%,” he said.
At present, the New York Mercantile Exchange has liquid contracts in gasoline. (Source: FE).
Guar seed futures to remain firm on lower acreage
Mumbai: Guar seed futures prices on the National Commodity & Derivatives Exchange (NCDEX) may remain firm over the next few days on reports of below average monsoon forecast and expected fall in acreage in the upcoming sowing season.
NCDEX August 2009 contracts rose by nearly Rs 70 to trade at Rs 1,903 per quintal on Wednesday over past two days on lower sowing acreage in guar growing areas and lower stocks.
“There are no reports of rains in Rajasthan. Sowing has just started across Rajasthan with slow pace. Only 10-15% sowing is done till date against the normal 50-55%,” a local trader said.
Futures prices hit upper circuit on Tuesday and gained nearly 3.5% over past two days on strong market sentiments thanks to below normal monsoon forecast for season June-September 2009 and drop in the acreage under guar. “Sowing of guar, which normally takes place between May 15 and continues till Mid-June was delayed this year. Drastic fall in acreage under guar has also been witnessed across North Rajasthan,” analyst with Angel Broking said.
Met department has predicted that the monsoon in the Northwest India (which is the main guar belt) is only 81% which will affect the output of guar in the coming season, analyst said.
“A delay in monsoon will also affect the sowing and output which can push guar prices further up,” Tarun Satsangi, AVP, Bonanza Commodity said.
“Technically, guar can see a pullback in prices and it can touch trend line support of Rs 1,846 from where prices can again get into bullish momentum and prices can once again surge towards Rs 1,922 and then towards Rs 1,956 in the near term, he said. (source: FE)
NCDEX August 2009 contracts rose by nearly Rs 70 to trade at Rs 1,903 per quintal on Wednesday over past two days on lower sowing acreage in guar growing areas and lower stocks.
“There are no reports of rains in Rajasthan. Sowing has just started across Rajasthan with slow pace. Only 10-15% sowing is done till date against the normal 50-55%,” a local trader said.
Futures prices hit upper circuit on Tuesday and gained nearly 3.5% over past two days on strong market sentiments thanks to below normal monsoon forecast for season June-September 2009 and drop in the acreage under guar. “Sowing of guar, which normally takes place between May 15 and continues till Mid-June was delayed this year. Drastic fall in acreage under guar has also been witnessed across North Rajasthan,” analyst with Angel Broking said.
Met department has predicted that the monsoon in the Northwest India (which is the main guar belt) is only 81% which will affect the output of guar in the coming season, analyst said.
“A delay in monsoon will also affect the sowing and output which can push guar prices further up,” Tarun Satsangi, AVP, Bonanza Commodity said.
“Technically, guar can see a pullback in prices and it can touch trend line support of Rs 1,846 from where prices can again get into bullish momentum and prices can once again surge towards Rs 1,922 and then towards Rs 1,956 in the near term, he said. (source: FE)
Wednesday, June 3, 2009
Chana futures to remain weak on higher stocks
Mumbai: Chana futures prices on the national commodity bourses may remain weak over the next few days on higher stocks with exchange warehouses supported by continued imported inflows of pulses. Overall demand from local buyers is limited.
Chana futures on NCDEX fell by nearly 12% to trade at Rs 2,119 per quintal on Monday over last month mainly on increased supplies amid restricted buying from basan mills.
Chana prices also fell by Rs 20 to 2,125 per quintal on Monday at Delhi market with daily inflows of about 3,500-4,000 bags.
“Rising stocks in exchange warehouses and higher output estimates by the government pushed the chana futures prices lower,” analyst with Bonanza Commodity Broker said. Demand from millers remained steady, he said.
Warehouse stocks in the NCDEX has risen around 56% in the month of May and stood at 84,154 tonne, as per latest exchange data.
Sowing of kharif pulses including tur, urad and moong may commence in the coming weeks and given the higher prices of these pulses, a higher acreage this season could not be denied.
Spot prices of urad, tur and masoor are ruling higher than chana prices in the northern markets. It can be noted that only yellow peas’ prices are ruling lower than chana due to government intervention. “A stronger rupee that made imports cheaper was nullifying impact of lower arrivals. State run agencies have contracted to import of 64,000 tonne of pulses for 2009-10,” Anand James, senior analyst with Geojit Comtrade, said.
Government agencies had contracted 1.03 million tonne of pulses in the previous year and 9.28 lakh tonne have landed in the country, according to government agencies. “We expect chana prices to remain weak in the coming weeks as stockists may not like to hold for long time when the availability in the open market is good enough. I think prices may slip to below Rs 2,000 levels,” a local trader said.
Chana output may rise to 13.7% to 6.54 million tonne in 2008-09 against the 5.75 million tonne a year ago, according to government estimates. (Source: Financial Express)
Chana futures on NCDEX fell by nearly 12% to trade at Rs 2,119 per quintal on Monday over last month mainly on increased supplies amid restricted buying from basan mills.
Chana prices also fell by Rs 20 to 2,125 per quintal on Monday at Delhi market with daily inflows of about 3,500-4,000 bags.
“Rising stocks in exchange warehouses and higher output estimates by the government pushed the chana futures prices lower,” analyst with Bonanza Commodity Broker said. Demand from millers remained steady, he said.
Warehouse stocks in the NCDEX has risen around 56% in the month of May and stood at 84,154 tonne, as per latest exchange data.
Sowing of kharif pulses including tur, urad and moong may commence in the coming weeks and given the higher prices of these pulses, a higher acreage this season could not be denied.
Spot prices of urad, tur and masoor are ruling higher than chana prices in the northern markets. It can be noted that only yellow peas’ prices are ruling lower than chana due to government intervention. “A stronger rupee that made imports cheaper was nullifying impact of lower arrivals. State run agencies have contracted to import of 64,000 tonne of pulses for 2009-10,” Anand James, senior analyst with Geojit Comtrade, said.
Government agencies had contracted 1.03 million tonne of pulses in the previous year and 9.28 lakh tonne have landed in the country, according to government agencies. “We expect chana prices to remain weak in the coming weeks as stockists may not like to hold for long time when the availability in the open market is good enough. I think prices may slip to below Rs 2,000 levels,” a local trader said.
Chana output may rise to 13.7% to 6.54 million tonne in 2008-09 against the 5.75 million tonne a year ago, according to government estimates. (Source: Financial Express)
Wheat futures to remain weak
Mumbai: Wheat futures prices may remain weak over the next few days mainly on restricted buying interest amid huge stocks with Food Corporation of India (FCI) and state government agencies
Wheat June 2009 futures on the National Commodity & Derivatives Exchange (NCDEX) fell by nearly Rs 35 over eight trading session to trade at Rs 1,105 a quintal on limited buying support.
On Wednesday, prices quoted below Rs 1,100 mark a quintal. Significant volumes were witnessed with an increase in the open interest at 17,350 tonne compared with 6,610 tonne two days back.
“Futures prices are still higher than the spot markets. I think prices may remain under pressure amid slow trades. Buyers have reserved their buying thanks to huge stock base with government agencies. Other hand, spot prices are also weakening slowly on lack of fresh buying. Big MNCs are currently away from the market,” a local trader said.
Spot prices in the northern India also declined gradually and are quoting below minimum support price (MSP) level in some part of Uttar Pradesh and Rajasthan mainly due to restricted buying. Spot price in Delhi market was quoted at Rs 1,088 a quintal as against MSP level of Rs 1,080.
Among the major trading in north India, spot prices were quoted lower at Rs 1,045 at Kanpur mandi, Rs 1,020 at Bareilly mandi and Rs 1,074 a quintal in Kota market.
“Fundamentally, there is a supply glut in both the Indian and global wheat markets. Thus, from the longer term perspective, wheat prices are expected to remain bearish,” analyst with Angel Commodities said.
The government is not in hurry to lift wheat exports curbs which will keep price under check. The quantitative restriction of 20 lakh tonne on wheat export may soon be waived by allowing free trade as there is a record procurement of the food grain this year, trade sources said.
In the short to medium term, prices are likely to fall further due to bumper crop in the current season and government agencies have procured huge stocks in the domestic market due to a record production, analyst said.
It can be noted that huge wheat stocks (13-14 million tonnes as on 1 April) with the government against the normal 4 million tonnes and higher procurement target 24.4 million tonnes ensures that wheat prices in the domestic market are unlikely to shoot up in the longer term. (Source: Financial Express)
Wheat June 2009 futures on the National Commodity & Derivatives Exchange (NCDEX) fell by nearly Rs 35 over eight trading session to trade at Rs 1,105 a quintal on limited buying support.
On Wednesday, prices quoted below Rs 1,100 mark a quintal. Significant volumes were witnessed with an increase in the open interest at 17,350 tonne compared with 6,610 tonne two days back.
“Futures prices are still higher than the spot markets. I think prices may remain under pressure amid slow trades. Buyers have reserved their buying thanks to huge stock base with government agencies. Other hand, spot prices are also weakening slowly on lack of fresh buying. Big MNCs are currently away from the market,” a local trader said.
Spot prices in the northern India also declined gradually and are quoting below minimum support price (MSP) level in some part of Uttar Pradesh and Rajasthan mainly due to restricted buying. Spot price in Delhi market was quoted at Rs 1,088 a quintal as against MSP level of Rs 1,080.
Among the major trading in north India, spot prices were quoted lower at Rs 1,045 at Kanpur mandi, Rs 1,020 at Bareilly mandi and Rs 1,074 a quintal in Kota market.
“Fundamentally, there is a supply glut in both the Indian and global wheat markets. Thus, from the longer term perspective, wheat prices are expected to remain bearish,” analyst with Angel Commodities said.
The government is not in hurry to lift wheat exports curbs which will keep price under check. The quantitative restriction of 20 lakh tonne on wheat export may soon be waived by allowing free trade as there is a record procurement of the food grain this year, trade sources said.
In the short to medium term, prices are likely to fall further due to bumper crop in the current season and government agencies have procured huge stocks in the domestic market due to a record production, analyst said.
It can be noted that huge wheat stocks (13-14 million tonnes as on 1 April) with the government against the normal 4 million tonnes and higher procurement target 24.4 million tonnes ensures that wheat prices in the domestic market are unlikely to shoot up in the longer term. (Source: Financial Express)
Turmeric price to remain bearish
Mumbai: Futures and spot prices of turmeric on the national bourses may continue to remain weak over next few days in anticipation that the production of turmeric in the coming season would be better due to early onset of monsoon.
Last week, turmeric June contracts on the National Commodity & Derivatives Exchange (NCDEX) fell sharply by nearly Rs 590 per quintal or 11% to trade at Rs 4,927 per quintal on Monday over the last week on some profit-taking on reports of weak overseas demand and rise acreage in coming season in Andhra Pradesh.
“Turmeric prices went down by near 4% over past few days extending the losses on weak demand and rise acreage in coming season led the traders to book profits and come out of their long positions,” Anand James, senior analyst, Geojit Comtrade said.
Early onset of the monsoon may induce farmers to go for sowing of turmeric. Sowing of turmeric is expected to increase as they earned better prices in the current year, he added.
Spot prices at the Nizambad mandi also declined by Rs 250 per quintal on scattered buying interest from local buyers. However, spot markets at Nizamabad and Erode remained closed on Saturday due to weekly off. Price gap between spot and futures markets has widened to over Rs 300 per quintal, trade sources said.
“In the long term, prices may take cues from the availability of turmeric in 2009 and demand from the domestic as well as overseas market,” Nalini Rao, analyst with Angel Commodities said.
Physical stocks with the farmers and stockists are at lower levels which include Nizamabad-4 lakh bags, Erode-8 lakh bags, Sangli and Duggiralla-1.5lakh bags each and Warrangal-1 lakh bag.
“Sowing of turmeric is expected to grow in Nizamabad and Erode by around 20% and 40% respectively. Sowing commences with the onset of monsoon in the month of June. Demand from the domestic and overseas market is present in small quantity due to appreciation in rupee and subsequent decline in overseas orders,” she said. (Source: Financial Express)
Last week, turmeric June contracts on the National Commodity & Derivatives Exchange (NCDEX) fell sharply by nearly Rs 590 per quintal or 11% to trade at Rs 4,927 per quintal on Monday over the last week on some profit-taking on reports of weak overseas demand and rise acreage in coming season in Andhra Pradesh.
“Turmeric prices went down by near 4% over past few days extending the losses on weak demand and rise acreage in coming season led the traders to book profits and come out of their long positions,” Anand James, senior analyst, Geojit Comtrade said.
Early onset of the monsoon may induce farmers to go for sowing of turmeric. Sowing of turmeric is expected to increase as they earned better prices in the current year, he added.
Spot prices at the Nizambad mandi also declined by Rs 250 per quintal on scattered buying interest from local buyers. However, spot markets at Nizamabad and Erode remained closed on Saturday due to weekly off. Price gap between spot and futures markets has widened to over Rs 300 per quintal, trade sources said.
“In the long term, prices may take cues from the availability of turmeric in 2009 and demand from the domestic as well as overseas market,” Nalini Rao, analyst with Angel Commodities said.
Physical stocks with the farmers and stockists are at lower levels which include Nizamabad-4 lakh bags, Erode-8 lakh bags, Sangli and Duggiralla-1.5lakh bags each and Warrangal-1 lakh bag.
“Sowing of turmeric is expected to grow in Nizamabad and Erode by around 20% and 40% respectively. Sowing commences with the onset of monsoon in the month of June. Demand from the domestic and overseas market is present in small quantity due to appreciation in rupee and subsequent decline in overseas orders,” she said. (Source: Financial Express)
Appreciating rupee likely to keep guarseed futures weak
Mumbai: Guarseed futures prices may remain weak over the next few days on reports of appreciating rupee and forecast of early arrival of monsoon.
Thanks to strong rupee value against dollar, demand from overseas market was low and will depend on the currency movement. Also, forecast of early arrival of monsoon will play important role for guarseed output.
“The rupee value had appreciated about 4.25% in past four days. This strong movement was unexpected and unusual, after the ruling coalition won a comfortable victory in the elections. Hence, demand for export is limited as strong rupee may hit exporters’ margin. Futures prices are also ruling lower than spot prices,” a leading trader at Jodhpur said.
Guargum exports were initially estimated to touch 2.25 lakh tonne this fiscal, but now the industry expects it to be 1.75 lakh tonne only.
The NCDEX June 2009 contracts (ex-Jodhpur) fell nearly Rs 50 to trade at Rs 1,757 per quintal on Thursday over past one week while spot price at Jodhpur market was quoted at Rs 1,772.75 per quintal.
“Indian Metrological department (IMD) would give its second long range weather forecast by mid-June. This would decide the further trend in guar complex. If the initial forecast of normal monsoon hold well, guar output may be expected good next year,” analyst with Angel Commodities said.
“Besides output forecast, other factors like demand from the overseas market, rupee movement and trend in crude oil prices would also have an influence on the prices in the long term,” he added. (Source: Finanicial Express)
Thanks to strong rupee value against dollar, demand from overseas market was low and will depend on the currency movement. Also, forecast of early arrival of monsoon will play important role for guarseed output.
“The rupee value had appreciated about 4.25% in past four days. This strong movement was unexpected and unusual, after the ruling coalition won a comfortable victory in the elections. Hence, demand for export is limited as strong rupee may hit exporters’ margin. Futures prices are also ruling lower than spot prices,” a leading trader at Jodhpur said.
Guargum exports were initially estimated to touch 2.25 lakh tonne this fiscal, but now the industry expects it to be 1.75 lakh tonne only.
The NCDEX June 2009 contracts (ex-Jodhpur) fell nearly Rs 50 to trade at Rs 1,757 per quintal on Thursday over past one week while spot price at Jodhpur market was quoted at Rs 1,772.75 per quintal.
“Indian Metrological department (IMD) would give its second long range weather forecast by mid-June. This would decide the further trend in guar complex. If the initial forecast of normal monsoon hold well, guar output may be expected good next year,” analyst with Angel Commodities said.
“Besides output forecast, other factors like demand from the overseas market, rupee movement and trend in crude oil prices would also have an influence on the prices in the long term,” he added. (Source: Finanicial Express)
Diamond supplies rise, gold exports continue to fall
Mumbai: At the time when global supplies of rough diamond is improving, the demand for gold jewellery globally has not yet picked up any momentum in the first four months of current calendar year due to the economic downturn that dramatically impacted demand for gold jewellery and rough diamonds.
Gold and rough diamonds are the major raw materials for the gem and jewellery sector. The Diamond Trading Company’s (DTC), marketing arm of DeBeers group and a major global supplier of rough diamonds, last week increased its supply of rough diamond in May 2009 sight by 25% higher which is more than the March/April 2009 sight estimate, but it is still 62% lower than one year ago. May 2009 sight held an estimated value of $250 million.
“It is definitely good news for our domestic market as we import rough diamond in large quantity from global market but there is no fresh buying from major buyers like USA and Hong Kong,” a leading sight-holder who did not wish to be quoted said.
“Demand for diamond jewellery has not yet picked up any momentum and the diamond industry is still stagnant under the pressure of the global economic slowdown,” he added.
Net US rough diamond imports in March totalled $8.31 million, averaging $1,242 per carat. The US imported a net of 6,689 carats of gem quality rough diamonds during the month, according to latest figures available. Compared to March 2008, net imports fell 58.9% in value and 32.4% in volume. Gross imports of 32,944 carats carried a declared value of $19.25 million, averaging $584.50 per carat. On year-on-year basis, gross imports declined 73.9% in volume and 69.2% in value.
“I believe there is good demand for roughs but it is scattered. The overall availability of roughs is less because DTC has cut production. There is stronger demand for 3 carats that yield polished stone of 1-1.5 carats,” said another sight-holder. In April, India’s rough imports decreased 41.91% to $557.98 million, while exports decreased 23% to $765.74 million.
“Demand has not grown much during the last month and it will continue to remain stagnant or low as far as gems and jewellery sector is concerned,”Rajesh Mehta, MD of Rajesh Exports told FE. He said downturn in this sector may continue for over the next three quarters. Gold import has also gone down substantially and it may remain stagnant.”
Among the major global players, Israel’s polished diamond exports fell 28% to $269.1 million in April 2009 while roughs export dropped 59% to $108.3 million in April 2009. Belgium’s rough imports also decreased 58% to $399 million, while exports decreased 37% to $609.8 million. Net rough imports (rough import less export) widened their deficit for the month to $210.8 million, from negative $21.2 million a year earlier. (Source: Financial Express)
Gold and rough diamonds are the major raw materials for the gem and jewellery sector. The Diamond Trading Company’s (DTC), marketing arm of DeBeers group and a major global supplier of rough diamonds, last week increased its supply of rough diamond in May 2009 sight by 25% higher which is more than the March/April 2009 sight estimate, but it is still 62% lower than one year ago. May 2009 sight held an estimated value of $250 million.
“It is definitely good news for our domestic market as we import rough diamond in large quantity from global market but there is no fresh buying from major buyers like USA and Hong Kong,” a leading sight-holder who did not wish to be quoted said.
“Demand for diamond jewellery has not yet picked up any momentum and the diamond industry is still stagnant under the pressure of the global economic slowdown,” he added.
Net US rough diamond imports in March totalled $8.31 million, averaging $1,242 per carat. The US imported a net of 6,689 carats of gem quality rough diamonds during the month, according to latest figures available. Compared to March 2008, net imports fell 58.9% in value and 32.4% in volume. Gross imports of 32,944 carats carried a declared value of $19.25 million, averaging $584.50 per carat. On year-on-year basis, gross imports declined 73.9% in volume and 69.2% in value.
“I believe there is good demand for roughs but it is scattered. The overall availability of roughs is less because DTC has cut production. There is stronger demand for 3 carats that yield polished stone of 1-1.5 carats,” said another sight-holder. In April, India’s rough imports decreased 41.91% to $557.98 million, while exports decreased 23% to $765.74 million.
“Demand has not grown much during the last month and it will continue to remain stagnant or low as far as gems and jewellery sector is concerned,”Rajesh Mehta, MD of Rajesh Exports told FE. He said downturn in this sector may continue for over the next three quarters. Gold import has also gone down substantially and it may remain stagnant.”
Among the major global players, Israel’s polished diamond exports fell 28% to $269.1 million in April 2009 while roughs export dropped 59% to $108.3 million in April 2009. Belgium’s rough imports also decreased 58% to $399 million, while exports decreased 37% to $609.8 million. Net rough imports (rough import less export) widened their deficit for the month to $210.8 million, from negative $21.2 million a year earlier. (Source: Financial Express)
FMC lifts 2-year ban on futures trade in wheat
Mumbai, New Delhi: In a significant development on the eve of the general election results, commodities regulator Forward Markets Commission (FMC) has overturned a major decision of the outgoing UPA government and allowed exchanges to resume futures trade in wheat, one of the country’s main foodgrains. “The National Commodity Exchange can now apply afresh for new contracts. Once they do so, we will grant permission within two or three days,” FMC chairman BC Khatua told FE.
The FMC is believed to have taken the decision to lift the futures trade ban last month, but its announcement was delayed due to imposition of the model code of conduct. It also comes ahead of the government’s move, probably next week, to ease a more than two-year ban on wheat exports.
The outgoing UPA government banned futures trade in wheat, rice, tur and urad in March 2007 under pressure from its then communist allies, who blamed the futures market for a spike in retail prices of food commodities.
However, a high-level committee constituted under the chairmanship of Planning Commission member Abhijit Sen in 2008 to study the impact of futures trading on spot prices failed to identify any direct correlation between the two. Instead, the panel recommended enlarging the futures trade as volumes for most agricultural commodities was relatively low compared to international norms.
Notwithstanding the conclusions made in the Sen report, the government in May 2008 went ahead and suspended futures trade in potato, rubber, refined soy oil and chana (chikpea) for four months to curb the spurt in retail prices. The suspension was later extended for another two months, after which it was allowed to lapse as prices of all four commodities showed a declining trend.
Friday’s decision to lift the futures ban paves the way for the resumption of trading in one of highest volume grossing commodities on the exchanges. Of the three national bourses, wheat was largely traded on the National Commodity & Derivatives Exchange (NCDEX), the country’s largest agriculture exchange.
Armed with the FMC order, NCDEX immediately submitted its request for new wheat contracts for trading. Exchange sources said it would be ‘compulsory contracts’ and trading could resume as early as next month.
MCX is also expected to file for resumption of trading in wheat futures on Monday and hopes to start trading by Tuesday. Asked about the lifting of the trading ban, MCX CEO & MD Joseph Massey said, “This is a positive development, which will benefit farmers as well as industry.”
“The price of a commodity depends on fundamentals and, therefore, there was no justification in continuing with the ban,” said Debjyoti Chatterjee, associate vice-president at Mape Admisi Commodities, a Mumbai-based brokerage firm.
Comfortable wheat stocks and also a massive surge in procurement during the current harvest season that started in April had also made continuing the ban redundant. India’s wheat production in 2007-08 is estimated to be around 78 million tonne (mt).
In 2008-09, according to the government’s third advanced estimate, wheat output is estimated to be more than 77 mt. Stocks on April 1 are estimated to more than 14 mt, almost 9 mt more than the buffer requirement. (Source: Financial Express)
The FMC is believed to have taken the decision to lift the futures trade ban last month, but its announcement was delayed due to imposition of the model code of conduct. It also comes ahead of the government’s move, probably next week, to ease a more than two-year ban on wheat exports.
The outgoing UPA government banned futures trade in wheat, rice, tur and urad in March 2007 under pressure from its then communist allies, who blamed the futures market for a spike in retail prices of food commodities.
However, a high-level committee constituted under the chairmanship of Planning Commission member Abhijit Sen in 2008 to study the impact of futures trading on spot prices failed to identify any direct correlation between the two. Instead, the panel recommended enlarging the futures trade as volumes for most agricultural commodities was relatively low compared to international norms.
Notwithstanding the conclusions made in the Sen report, the government in May 2008 went ahead and suspended futures trade in potato, rubber, refined soy oil and chana (chikpea) for four months to curb the spurt in retail prices. The suspension was later extended for another two months, after which it was allowed to lapse as prices of all four commodities showed a declining trend.
Friday’s decision to lift the futures ban paves the way for the resumption of trading in one of highest volume grossing commodities on the exchanges. Of the three national bourses, wheat was largely traded on the National Commodity & Derivatives Exchange (NCDEX), the country’s largest agriculture exchange.
Armed with the FMC order, NCDEX immediately submitted its request for new wheat contracts for trading. Exchange sources said it would be ‘compulsory contracts’ and trading could resume as early as next month.
MCX is also expected to file for resumption of trading in wheat futures on Monday and hopes to start trading by Tuesday. Asked about the lifting of the trading ban, MCX CEO & MD Joseph Massey said, “This is a positive development, which will benefit farmers as well as industry.”
“The price of a commodity depends on fundamentals and, therefore, there was no justification in continuing with the ban,” said Debjyoti Chatterjee, associate vice-president at Mape Admisi Commodities, a Mumbai-based brokerage firm.
Comfortable wheat stocks and also a massive surge in procurement during the current harvest season that started in April had also made continuing the ban redundant. India’s wheat production in 2007-08 is estimated to be around 78 million tonne (mt).
In 2008-09, according to the government’s third advanced estimate, wheat output is estimated to be more than 77 mt. Stocks on April 1 are estimated to more than 14 mt, almost 9 mt more than the buffer requirement. (Source: Financial Express)
Kotak may cut stake in Ahd Commex to 40%
Mumbai: The Kotak group will have to reduce its equity stake from current 51% to 40% in the Ahmedabad Commodity Exchange (ACE) within a year from the date of in-principle approval, as per the new guidelines issued for formation of national commodity exchange.
The forward markets commission (FMC) has accorded an in-principle approval to the ACE to upgrade and convert itself into a national multicommodity exchange on the basis of an application made in 2008.
With this in-principle approval, ACE has become the first regional commodity exchange to get the status. The permission has been granted on condition that ACE upgrades itself by replacing its “open outcry” system with online trading.
After getting approval for status of national commodity exchange by regulator, the Kotak Group will soon initiate the acquisition process of the ACE in-line with FMC guidelines.
As part of its plan to become corporatised and demutualised national exchange, ACE had offered 51% equity stake to Kotak Mahindra Bank in January 2008. The acquisition price per equity share of ACE was decided at Rs 321.
“We have proposed to acquire equity stake of 51% in the exchange but as per the new guidelines, we will have to reduce our stake to 40% as an anchor promoter. Firstly, we will complete our acquisition process. We will also go for the demutualisation as per the guidelines,” T Raghunath, head of group strategy for Kotak told FE.
“I think it will take atleast one or two months to complete the process of acquisition and demutualisation,” he said.
There are three major national commodities exchanges in the country, Multi-Commodity Exchange (MCX), National Commodity and Derivative Exchange (NCDEX) and National Multi Commodity Exchange (NMCE).
Apart from these three commodity bourses, India Bulls and MMTC are also jointly setting up new exchange.
“It is an important milestone in the history of commodity exchange. We would transform ourselves from a regional to national player by undertaking demutulisation process and implementing online trading system,” Pravin Thakkar, president, ACE said.
ACE, which currently trades in castor seed and cotton seed with a daily turnover of Rs 25 crore, may introduce all permitted commodities including bullion on its platform in a phase manner, he added. The exchange currently has 212 members.
As per the new guidelines, the regional commodity exchanges are not permitted to list more commodities unless the trading system is online.
In 2008, the exchange passed a resolution and proposed to issue and allot to Kotak Mahindra Bank and/or its associates or subsidiaries up to 1.02 lakh equity shares at a price of Rs 321 per equity share and up to 10.50 lakh share warrants. ACE convened an extraordinary general meeting on February 2008 to seek its shareholders approval for offering stake to Kotak Mahindra Bank. (Source: Financial Express)
The forward markets commission (FMC) has accorded an in-principle approval to the ACE to upgrade and convert itself into a national multicommodity exchange on the basis of an application made in 2008.
With this in-principle approval, ACE has become the first regional commodity exchange to get the status. The permission has been granted on condition that ACE upgrades itself by replacing its “open outcry” system with online trading.
After getting approval for status of national commodity exchange by regulator, the Kotak Group will soon initiate the acquisition process of the ACE in-line with FMC guidelines.
As part of its plan to become corporatised and demutualised national exchange, ACE had offered 51% equity stake to Kotak Mahindra Bank in January 2008. The acquisition price per equity share of ACE was decided at Rs 321.
“We have proposed to acquire equity stake of 51% in the exchange but as per the new guidelines, we will have to reduce our stake to 40% as an anchor promoter. Firstly, we will complete our acquisition process. We will also go for the demutualisation as per the guidelines,” T Raghunath, head of group strategy for Kotak told FE.
“I think it will take atleast one or two months to complete the process of acquisition and demutualisation,” he said.
There are three major national commodities exchanges in the country, Multi-Commodity Exchange (MCX), National Commodity and Derivative Exchange (NCDEX) and National Multi Commodity Exchange (NMCE).
Apart from these three commodity bourses, India Bulls and MMTC are also jointly setting up new exchange.
“It is an important milestone in the history of commodity exchange. We would transform ourselves from a regional to national player by undertaking demutulisation process and implementing online trading system,” Pravin Thakkar, president, ACE said.
ACE, which currently trades in castor seed and cotton seed with a daily turnover of Rs 25 crore, may introduce all permitted commodities including bullion on its platform in a phase manner, he added. The exchange currently has 212 members.
As per the new guidelines, the regional commodity exchanges are not permitted to list more commodities unless the trading system is online.
In 2008, the exchange passed a resolution and proposed to issue and allot to Kotak Mahindra Bank and/or its associates or subsidiaries up to 1.02 lakh equity shares at a price of Rs 321 per equity share and up to 10.50 lakh share warrants. ACE convened an extraordinary general meeting on February 2008 to seek its shareholders approval for offering stake to Kotak Mahindra Bank. (Source: Financial Express)
Diamond industry likely to recover in H2
Mumbai: Global diamond industry may start recovering from the second half of 2009 as positive signals have begun to emerge from main consuming markets, especially the US.
As other global markets show signs of bottoming, it is likely that prices of polished diamonds will firm up and perhaps a gradual recovery will ensue. The recovery is reasonably likely to begin in the second half of 2009, according to latest online survey conducted by International Diamond Exchange (IDEX).
Global polished diamond prices dipped by 10.8% in April 2009 compared to the same month a year ago. It was the fourth month that year-on-year prices dipped for polished diamonds.
All key diamond sizes experienced price deflation. The seven stone sizes represent about one-third of the trading market by value. On a year-on-year comparison, polished diamond prices for the key sizes and qualities fell from the prior year. Almost all sizes of diamonds showed a double-digit loss in April. Comparisons were difficult, since there were a string of double-digit price gains for the larger diamond sizes in 2008.
For the month of April 2009, average global polished diamond prices declined by 1.4% over average diamond prices during March 2009. The IDEX Online Polished Diamond Price Index stood at 108.40 in April 2009 against 121.51 in April a year ago, according survey report.
“Polished diamond prices globally may continue to decline, though at a more modest rate. They have dipped below the historical trend line inflation rate of 3-4% annually, though we believe that they will eventually return to this historic rate of annual inflation,” IDEX report says.
Polished diamond prices appear to have nearly leveled out, ending a free-fall that began in late 2008 and continued into early 2009 as panic selling by diamond dealers has abated.
“We believe that diamond demand and diamond prices are more likely to remain relatively untouched by potential commodity market volatility in the future, once the US and the global economies stabilise. Further, based on 50,000 or more years of demand trends, we do not expect to see any major shift in consumer demand for diamonds or other jewellery as the global economy emerges from the current recession,” report says.
There are some positive factors that that suggest polished diamond demand is firming, and polished diamond prices could stabilise, prior to potentially moving higher.
One of the key factors is that US jewelry retail sales have stabilised, so there is some optimism in the air. Rough diamond suppliers cut back on mining activities, but some appear poised to restart mining operations due to increased demand. Rough diamond suppliers have played a major role in stabilising polished diamond prices and bringing balance to the polished diamond market. Recent sales forecasts also suggest that global diamond sales will be down by only low double-digit levels in 2009. (source: Financial Express)
As other global markets show signs of bottoming, it is likely that prices of polished diamonds will firm up and perhaps a gradual recovery will ensue. The recovery is reasonably likely to begin in the second half of 2009, according to latest online survey conducted by International Diamond Exchange (IDEX).
Global polished diamond prices dipped by 10.8% in April 2009 compared to the same month a year ago. It was the fourth month that year-on-year prices dipped for polished diamonds.
All key diamond sizes experienced price deflation. The seven stone sizes represent about one-third of the trading market by value. On a year-on-year comparison, polished diamond prices for the key sizes and qualities fell from the prior year. Almost all sizes of diamonds showed a double-digit loss in April. Comparisons were difficult, since there were a string of double-digit price gains for the larger diamond sizes in 2008.
For the month of April 2009, average global polished diamond prices declined by 1.4% over average diamond prices during March 2009. The IDEX Online Polished Diamond Price Index stood at 108.40 in April 2009 against 121.51 in April a year ago, according survey report.
“Polished diamond prices globally may continue to decline, though at a more modest rate. They have dipped below the historical trend line inflation rate of 3-4% annually, though we believe that they will eventually return to this historic rate of annual inflation,” IDEX report says.
Polished diamond prices appear to have nearly leveled out, ending a free-fall that began in late 2008 and continued into early 2009 as panic selling by diamond dealers has abated.
“We believe that diamond demand and diamond prices are more likely to remain relatively untouched by potential commodity market volatility in the future, once the US and the global economies stabilise. Further, based on 50,000 or more years of demand trends, we do not expect to see any major shift in consumer demand for diamonds or other jewellery as the global economy emerges from the current recession,” report says.
There are some positive factors that that suggest polished diamond demand is firming, and polished diamond prices could stabilise, prior to potentially moving higher.
One of the key factors is that US jewelry retail sales have stabilised, so there is some optimism in the air. Rough diamond suppliers cut back on mining activities, but some appear poised to restart mining operations due to increased demand. Rough diamond suppliers have played a major role in stabilising polished diamond prices and bringing balance to the polished diamond market. Recent sales forecasts also suggest that global diamond sales will be down by only low double-digit levels in 2009. (source: Financial Express)
Sugar prices to stay firm on global cues
Mumbai: Sugar prices, spot and futures, may continue to remain firm over the next few days mainly on reports of unviable imports, firm overseas markets and reports of lower domestic supplies.
Sugar M grade 200 (Kolhapur) prices were quoted Rs 50-60 higher to trade at Rs 2,281 for May contracts and Rs 2,408 per quintal for June contracts on NCDEX over previous week due to drop in domestic output and strong international prices.
Global prices rose by 2.5% to trade over 15 cents per pound in past two weeks. Thus, landing cost of raw sugar is higher than the domestic prices. The landed cost of raw sugar in Indian ports will be in the range of $395 a tonne, whereas till now, no mill has contracted at above $330-340. London August white sugar contract moved $8 per tonne higher at $427 per tonne on Saturday.
The ex-factory cost of the processed white (imported) sugar at these rates would be around Rs 24,500 a tonne for mills close to ports and Rs 26,000 for those in Uttar Pradesh, sources said.
Spot prices were quoting higher around Rs 2,236 per quintal in Kolhapur market and Rs 2,490 per quintal in Muzaffar nagar. “Though domestic futures market showed some weakness last week, prices may continue to trade higher during the current week. Rising international prices are making the imports unviable. Talks of lower yield from Brazil’s central South crop have led New York and Liffe sugar to recover in the past few weeks, an analyst with Angel Commodities said.
“Lower output and unviable imports at current prices are likely to support the domestic sugar prices in the short to medium term with expected target of Rs 2600 per quintal,” analyst said.
Sugar M grade 200 (Kolhapur) prices were quoted Rs 50-60 higher to trade at Rs 2,281 for May contracts and Rs 2,408 per quintal for June contracts on NCDEX over previous week due to drop in domestic output and strong international prices.
Global prices rose by 2.5% to trade over 15 cents per pound in past two weeks. Thus, landing cost of raw sugar is higher than the domestic prices. The landed cost of raw sugar in Indian ports will be in the range of $395 a tonne, whereas till now, no mill has contracted at above $330-340. London August white sugar contract moved $8 per tonne higher at $427 per tonne on Saturday.
The ex-factory cost of the processed white (imported) sugar at these rates would be around Rs 24,500 a tonne for mills close to ports and Rs 26,000 for those in Uttar Pradesh, sources said.
Spot prices were quoting higher around Rs 2,236 per quintal in Kolhapur market and Rs 2,490 per quintal in Muzaffar nagar. “Though domestic futures market showed some weakness last week, prices may continue to trade higher during the current week. Rising international prices are making the imports unviable. Talks of lower yield from Brazil’s central South crop have led New York and Liffe sugar to recover in the past few weeks, an analyst with Angel Commodities said.
“Lower output and unviable imports at current prices are likely to support the domestic sugar prices in the short to medium term with expected target of Rs 2600 per quintal,” analyst said.
Castor oil export crosses 3 lakh tonne in 2008-09
Mumbai: At the time when the country’s overall growth of export started showing negative trend in some agri-commodities due to the impact of global economic crisis, export of castor oil has not only buck the trend but also registered a significant growth of 74% during the fiscal year 2008-09.
Annual exports were below 2 lakh tonne over the past five years. Castor oil is the substitute of petroleum products.
For the first time in the recent years, the total export of castor oil has crossed 3 lakh tonne mark in financial year 2008-09. Total export increased to 3.08 lakh tonne in 2008-09 from 1.76 lakh tonnes in 2007-08, up by 74% thanks to good buying from China.
“There are some enquires from China. I think the country exports about 8,000 tonne castor oil per month to China as Chinese buyers prefers small lots in containers,” said Wamanbhai Udeshi, director, Jayant Agro-Organics, a leading exporter of castor oil products.
“Shippers are offering castor oil around $1,020-1,030 per tonne (C&F basis) ex-Kandla for next month shipment,” a local broker said.
The country has so far exported about 75,000 tonne of castor oil till April during the current calendar year as fresh arrivals of new crop started in last January. Daily arrivals reached to one lakh bags (each of 75 kgs).
Traders expect export demand to continue from China. However, there are some enquiries from Europe and the US but hardly any major deals heard, sources said. The country expects 10.5-11 lakh tonne of castorseed crop for the current season. Of which, about 2.5 lakh tonne have already arrived in the major market yards of Gujarat and Rajasthan.
Shippers and stockists are major buyers in the market as they feel prices to remain firm over the next few days, a broker said.
Castorseed May contracts on NCDEX platform were up Rs 14-15 to trade at Rs 501 per 10 kg on Monday on continued buying support.
Annual exports were below 2 lakh tonne over the past five years. Castor oil is the substitute of petroleum products.
For the first time in the recent years, the total export of castor oil has crossed 3 lakh tonne mark in financial year 2008-09. Total export increased to 3.08 lakh tonne in 2008-09 from 1.76 lakh tonnes in 2007-08, up by 74% thanks to good buying from China.
“There are some enquires from China. I think the country exports about 8,000 tonne castor oil per month to China as Chinese buyers prefers small lots in containers,” said Wamanbhai Udeshi, director, Jayant Agro-Organics, a leading exporter of castor oil products.
“Shippers are offering castor oil around $1,020-1,030 per tonne (C&F basis) ex-Kandla for next month shipment,” a local broker said.
The country has so far exported about 75,000 tonne of castor oil till April during the current calendar year as fresh arrivals of new crop started in last January. Daily arrivals reached to one lakh bags (each of 75 kgs).
Traders expect export demand to continue from China. However, there are some enquiries from Europe and the US but hardly any major deals heard, sources said. The country expects 10.5-11 lakh tonne of castorseed crop for the current season. Of which, about 2.5 lakh tonne have already arrived in the major market yards of Gujarat and Rajasthan.
Shippers and stockists are major buyers in the market as they feel prices to remain firm over the next few days, a broker said.
Castorseed May contracts on NCDEX platform were up Rs 14-15 to trade at Rs 501 per 10 kg on Monday on continued buying support.
Wednesday, April 29, 2009
After two-day slide, soyabean futures bounce back
After a sharp correction of 7.4% witnessed over past two days on reports of swine flu outbreak in Mexico and US, soyabean May futures on the National Commodity & Derivatives Exchange (NCDEX) once again bounced back on Tuesday. The market has discounted the news of swine flu and prices regained mainly on concerns over Argentina’s harvest and strong demand from China.
Soyabean May contracts rose to Rs 2,600 level on Tuesday after touching a low of Rs 2,594 per quintal. Earlier, the contract rose to Rs 2,800 per quintal, up by almost 20% in April month. Spot prices in Indore market also gained Rs 2 at Rs 2607 per quintal on Tuesday.
On Monday, NCDEX May soyabean futures hit lower limit of 4% in tandem with overseas market on fear of lower demand of soy meal, feed demand in near future due to outbreak of swine flu in Mexico.
A 10% special margin, which was levied on long side on all soyabean contracts, also weighed on the markets. Swine flu outbreak will impact on meat and livestock feed demand, a local trader said.
The World Health Organization has raised its six-stage pandemic alert level to 4 from 3 because of evidence of increased human-to-human contact, as swine flu is spreading across North America. Hog and pork-belly futures plunged 3 cents a pound.
“Soyabean prices are expected to rise in near term on due to concerns over Argentina’s harvest and strong demand from China,” an analyst with Angel Commodities said.
For medium term and long term, it is bullish on account of lower global soybean production estimates to 218.8 million tonnes. And higher export demand of Indian soyameal is expected from Asian and Middle East countries in coming year owing tight supply in global market, he said.
“We feel the fall in prices could be limited. Market sentiments could take it down further but now the shorts if any needs to be covered. The undertone for the commodity looks fairly bullish and this fall has opened an opportunity to go long,” analyst with Kotak Commodities said.
China is likely to import 3.83 million tonnes of soybean in April and 3.18 million tonnes in May according to Chinese government estimates issued last week. (source: fianancial express)
Soyabean May contracts rose to Rs 2,600 level on Tuesday after touching a low of Rs 2,594 per quintal. Earlier, the contract rose to Rs 2,800 per quintal, up by almost 20% in April month. Spot prices in Indore market also gained Rs 2 at Rs 2607 per quintal on Tuesday.
On Monday, NCDEX May soyabean futures hit lower limit of 4% in tandem with overseas market on fear of lower demand of soy meal, feed demand in near future due to outbreak of swine flu in Mexico.
A 10% special margin, which was levied on long side on all soyabean contracts, also weighed on the markets. Swine flu outbreak will impact on meat and livestock feed demand, a local trader said.
The World Health Organization has raised its six-stage pandemic alert level to 4 from 3 because of evidence of increased human-to-human contact, as swine flu is spreading across North America. Hog and pork-belly futures plunged 3 cents a pound.
“Soyabean prices are expected to rise in near term on due to concerns over Argentina’s harvest and strong demand from China,” an analyst with Angel Commodities said.
For medium term and long term, it is bullish on account of lower global soybean production estimates to 218.8 million tonnes. And higher export demand of Indian soyameal is expected from Asian and Middle East countries in coming year owing tight supply in global market, he said.
“We feel the fall in prices could be limited. Market sentiments could take it down further but now the shorts if any needs to be covered. The undertone for the commodity looks fairly bullish and this fall has opened an opportunity to go long,” analyst with Kotak Commodities said.
China is likely to import 3.83 million tonnes of soybean in April and 3.18 million tonnes in May according to Chinese government estimates issued last week. (source: fianancial express)
Margins fail to dent sugar futures
Strong fundamentals and good summer demand once again pushed up the sugar futures market on Monday after a short correction last week and may continue to rise over the next few days, despite the imposition of special margins levied by Forward Markets Commission (FMC) to curb the excess speculation in the commodity.
Despite the facts that government’s efforts to control the domestic prices by imposing numbers of measures including approval of duty free imports of white sugar, imposition of stock limit, additional release of free sale quota and special margins on long positions of all running contracts, futures prices on the National commodity & derivatives exchange (NCDEX) on Monday increased by 2% over the previous day.
NCDEX June contracts jumped up by Rs 46 to finish at Rs 2,341 per quintal over previous day on continued support even after the report that NCDEX and MCX imposed special margin of 5% on sugar futures to curb volatility in prices. With these special margins, the total margins on sugar contracts would be 17.5% including an initial margin of 7.5% and special margins of 10%.
“I don’t think special margins will have any practical impact on the futures market as spot prices in North India are still ruling higher by Rs 100 over futures prices,” a leading trader of Kolhapur said.
“Consideration the good summer season demand, we don’t expect much downside in prices, despite the increase in overall supply,” he said.
Spot prices of sugar medium grade in North India are already ruling high at Rs 2,445 per quintal in Muzaffarnagar and Rs 2,415 in Delhi market. In Navi Mumbai, medium grade prices were ruling at Rs 2,280-2,370 per quintal.
The FMC was recently asked by the Committee of Secretaries (CoS) to watch the movement in sugar prices in the futures market and take necessary steps to curb excessive speculation.
In the next round of measures, the government may ask sugar mills to sell some stocks directly to co-operatives like Kendriya Bhandars at mutually agreed price. Also the regulator may even increase special margins by another 5% over the next few days. The government may also consider the proposal to convert excess (unsold) April free quota into levy sugar.
“From the medium term perspective, fundamentals for sugar remain strong due to lower production estimates in the India as well as rising deficit in global markets. World sugar demand is expected to outstrip supply and build a larger deficit in 2009-10," an analyst with Angel Commodities said. (source: Financial express)
Despite the facts that government’s efforts to control the domestic prices by imposing numbers of measures including approval of duty free imports of white sugar, imposition of stock limit, additional release of free sale quota and special margins on long positions of all running contracts, futures prices on the National commodity & derivatives exchange (NCDEX) on Monday increased by 2% over the previous day.
NCDEX June contracts jumped up by Rs 46 to finish at Rs 2,341 per quintal over previous day on continued support even after the report that NCDEX and MCX imposed special margin of 5% on sugar futures to curb volatility in prices. With these special margins, the total margins on sugar contracts would be 17.5% including an initial margin of 7.5% and special margins of 10%.
“I don’t think special margins will have any practical impact on the futures market as spot prices in North India are still ruling higher by Rs 100 over futures prices,” a leading trader of Kolhapur said.
“Consideration the good summer season demand, we don’t expect much downside in prices, despite the increase in overall supply,” he said.
Spot prices of sugar medium grade in North India are already ruling high at Rs 2,445 per quintal in Muzaffarnagar and Rs 2,415 in Delhi market. In Navi Mumbai, medium grade prices were ruling at Rs 2,280-2,370 per quintal.
The FMC was recently asked by the Committee of Secretaries (CoS) to watch the movement in sugar prices in the futures market and take necessary steps to curb excessive speculation.
In the next round of measures, the government may ask sugar mills to sell some stocks directly to co-operatives like Kendriya Bhandars at mutually agreed price. Also the regulator may even increase special margins by another 5% over the next few days. The government may also consider the proposal to convert excess (unsold) April free quota into levy sugar.
“From the medium term perspective, fundamentals for sugar remain strong due to lower production estimates in the India as well as rising deficit in global markets. World sugar demand is expected to outstrip supply and build a larger deficit in 2009-10," an analyst with Angel Commodities said. (source: Financial express)
Gold imports regain after brief lull
Mumbai: Finally, import of gold into India, the world’s largest buyer, has re-started in full swing in April, after a gap of two months because of higher global prices and dull demand for gold jewellery in the country.
Traders expect gold import to reach about 40 tonne this month mainly to cash in on the gold rush for Akshaya Tritiya day which falls on April 27 along with current wedding season.
“I think banks and government agencies together may import nearly 40 tonne of gold this month,” Bhargav Vaidya, a leading gold expert told FE.
Bullion dealers have started importing in small quantities and expect a revival of demand for gold jewellery during wedding season. Apart from jewellery, gold coins of various denominations (10 gm, 8 gm, 5 gm, 2.5 gm and 1 gm) are in good demand this month, sources said.
Gold import parcels of about 25 tonne have been landed till date and may add another 10-15 tonne by month end, sources said.
The country has been importing less gold recently as prices remain volatile amid the global financial crisis.
On the other hand, overall exports of gems and jewellery sector witnessed a decline of 18.88% in second half of financial year 2008-09 owing to the slowdown in the USA.
“The stock markets across the globe remained in better form on expectations of an early rebound in economic slowdown. Gold prices have been following a common pattern throughout this bull ish market. It rises for a six-to-nine-month period and then consolidates for a year to 18 months, before its next rise. These movements are independent of the currency in which prices are measured,” a local bullion dealer said.
Spot gold in world market may trade in the range of $870-$900 a troy ounce and prices in local markets will continue hovering in the range of Rs 14,500 to 15,000 per 10 grams.
“Local prices will remain firm over the next few days as demand for gold coins and jewellery may continue for some time due to current wedding season and Akshaye Trithya,” a local dealer said.
“After making a double-bottom around $864 gold has turned upside and is currently forming a bullish price pattern called inverse head and shoulders pattern on the hourly chart. Currently, the price is flirting around the neckline of the pattern on MCX rests around Rs14, 500. Once gold breaches this neckline, it is likely to test Rs 14,800 to Rs 15,000 on upside,” said a technical analyst with Sharekhan. (source: financial express)
Traders expect gold import to reach about 40 tonne this month mainly to cash in on the gold rush for Akshaya Tritiya day which falls on April 27 along with current wedding season.
“I think banks and government agencies together may import nearly 40 tonne of gold this month,” Bhargav Vaidya, a leading gold expert told FE.
Bullion dealers have started importing in small quantities and expect a revival of demand for gold jewellery during wedding season. Apart from jewellery, gold coins of various denominations (10 gm, 8 gm, 5 gm, 2.5 gm and 1 gm) are in good demand this month, sources said.
Gold import parcels of about 25 tonne have been landed till date and may add another 10-15 tonne by month end, sources said.
The country has been importing less gold recently as prices remain volatile amid the global financial crisis.
On the other hand, overall exports of gems and jewellery sector witnessed a decline of 18.88% in second half of financial year 2008-09 owing to the slowdown in the USA.
“The stock markets across the globe remained in better form on expectations of an early rebound in economic slowdown. Gold prices have been following a common pattern throughout this bull ish market. It rises for a six-to-nine-month period and then consolidates for a year to 18 months, before its next rise. These movements are independent of the currency in which prices are measured,” a local bullion dealer said.
Spot gold in world market may trade in the range of $870-$900 a troy ounce and prices in local markets will continue hovering in the range of Rs 14,500 to 15,000 per 10 grams.
“Local prices will remain firm over the next few days as demand for gold coins and jewellery may continue for some time due to current wedding season and Akshaye Trithya,” a local dealer said.
“After making a double-bottom around $864 gold has turned upside and is currently forming a bullish price pattern called inverse head and shoulders pattern on the hourly chart. Currently, the price is flirting around the neckline of the pattern on MCX rests around Rs14, 500. Once gold breaches this neckline, it is likely to test Rs 14,800 to Rs 15,000 on upside,” said a technical analyst with Sharekhan. (source: financial express)
Friday, April 17, 2009
Gur turns bitter for consumers as prices go up 25%
After a long rally witnessed in sugar, rising prices of gur have now turned bitter for consumers on the eve of general election in the country.
Gur spot prices at the major terminal markets including Muzaffarnagar and Hapur mandis have increased sharply by nearly 25% during the current month.
It can be noted that local prices of sugar also increased to Rs 2,600 per quintal this week from Rs 2,200 a quintal, despite release of higher free sale quota for the month.
Spot prices of gur in Muzaffarnagar have increased by nearly Rs 200 to trade at Rs 1,050 per 40 kg on Thursday on reports of reduced stocks in Uttar Pradesh and expected lower output of gur in the country.
Spot price of Gur Balti in Hapur market also increased to Rs 1,030 per 40 kg on increased offtake. NCDEX gur July futures also jumped up by nearly Rs 175, or 18%, to trade at Rs 1,134 per 40 kg on Wednesday over the beginning of the month.
“Prices have touched record levels during the month mainly on reports of cane shortage, reduced stocks and expected lower output this season. Total output is expected to be lowered by 30-40% in Uttar Pradesh and Maharashtra,” Pankaj Agrawal, a leading trader of Muzaffarnagar said.
Overall output of gur in the country is estimated lower around 8.5 to 9 million tonne for the current season from 14-15 million tonne last season. Total stock is expected to be around 10 lakh bags (each 40 kg) in Uttar Pradesh.
“There is good demand for black gur from Gujarat as it is used for making country liquor. Normally, demand for country liquor increases during the general election time. Some traders in Gujarat are holding large stocks of yellow and black gur ahead of election as there is no stock limit in gur,” a local trader said.
“Prices may remain higher in the next few days on short supply. Total output in south India is believed to be good but inflows of new gur from south are expected to begin in early June,” he said. (Source: Financial Express)
Gur spot prices at the major terminal markets including Muzaffarnagar and Hapur mandis have increased sharply by nearly 25% during the current month.
It can be noted that local prices of sugar also increased to Rs 2,600 per quintal this week from Rs 2,200 a quintal, despite release of higher free sale quota for the month.
Spot prices of gur in Muzaffarnagar have increased by nearly Rs 200 to trade at Rs 1,050 per 40 kg on Thursday on reports of reduced stocks in Uttar Pradesh and expected lower output of gur in the country.
Spot price of Gur Balti in Hapur market also increased to Rs 1,030 per 40 kg on increased offtake. NCDEX gur July futures also jumped up by nearly Rs 175, or 18%, to trade at Rs 1,134 per 40 kg on Wednesday over the beginning of the month.
“Prices have touched record levels during the month mainly on reports of cane shortage, reduced stocks and expected lower output this season. Total output is expected to be lowered by 30-40% in Uttar Pradesh and Maharashtra,” Pankaj Agrawal, a leading trader of Muzaffarnagar said.
Overall output of gur in the country is estimated lower around 8.5 to 9 million tonne for the current season from 14-15 million tonne last season. Total stock is expected to be around 10 lakh bags (each 40 kg) in Uttar Pradesh.
“There is good demand for black gur from Gujarat as it is used for making country liquor. Normally, demand for country liquor increases during the general election time. Some traders in Gujarat are holding large stocks of yellow and black gur ahead of election as there is no stock limit in gur,” a local trader said.
“Prices may remain higher in the next few days on short supply. Total output in south India is believed to be good but inflows of new gur from south are expected to begin in early June,” he said. (Source: Financial Express)
Anti-dumping inquiry into VSF import
The government has initiated anti-dumping investigation concerning import of Viscose Staple Fibre (VSF) excluding bamboo fibre originating in or exporting from China and Indonesia.
The Association of Man Made Fibre industry of India (AMFII) has filed an application before the designated authority last month and has requested for initiation of anti-dumping investigation and levy of anti-dumping duties. The period of investigation for the purpose of the present investigation is July 1 to December 31, 2008. Grasim Industries Ltd (GIL) is the sole producer of such product in India and has provided injury and costing information.
“Our association has filed an application before the designated authority and requested for the initiation of anti dumping investigation as the industry was suffering from such imports. There is sufficient evidence to justify initiation of an anti-dumping investigation in terms of AD rules,” Vijay Kaul, chief marketing officer, Grasim Industries Ltd (GIL) told FE.
The domestic industry had to reduce its VSF prices by nearly 25% during FY2009 due to dumping of such material from China and Indonesia, he added. The applicant has claimed that there is no other producer in India. As per the evidence available on record, production of GIL accounts for a major proportion of the domestic production. The production of Grasim is more than 50% of Indian production. The countries involved in the present investigation are People’s Republic of China and Indonesia (referred to as subject countries).
There is, prima facie, evidence that the normal value of the subject goods in the subject countries is significantly higher than the ex-factory export price indicating, prima facie, that the subject goods are being dumped by exporters from the subject countries. Parameters like increase in the absolute volume of imports and increase in the market share of imports from the subject countries in total imports, significant decline in the domestic selling price indicate that the industry has suffered material injury on account of dumping of subject goods from subject countries. (Source: Financial Express)
The Association of Man Made Fibre industry of India (AMFII) has filed an application before the designated authority last month and has requested for initiation of anti-dumping investigation and levy of anti-dumping duties. The period of investigation for the purpose of the present investigation is July 1 to December 31, 2008. Grasim Industries Ltd (GIL) is the sole producer of such product in India and has provided injury and costing information.
“Our association has filed an application before the designated authority and requested for the initiation of anti dumping investigation as the industry was suffering from such imports. There is sufficient evidence to justify initiation of an anti-dumping investigation in terms of AD rules,” Vijay Kaul, chief marketing officer, Grasim Industries Ltd (GIL) told FE.
The domestic industry had to reduce its VSF prices by nearly 25% during FY2009 due to dumping of such material from China and Indonesia, he added. The applicant has claimed that there is no other producer in India. As per the evidence available on record, production of GIL accounts for a major proportion of the domestic production. The production of Grasim is more than 50% of Indian production. The countries involved in the present investigation are People’s Republic of China and Indonesia (referred to as subject countries).
There is, prima facie, evidence that the normal value of the subject goods in the subject countries is significantly higher than the ex-factory export price indicating, prima facie, that the subject goods are being dumped by exporters from the subject countries. Parameters like increase in the absolute volume of imports and increase in the market share of imports from the subject countries in total imports, significant decline in the domestic selling price indicate that the industry has suffered material injury on account of dumping of subject goods from subject countries. (Source: Financial Express)
GJF to issue smart card for jewellers soon
All India Gems and Jewellery Trade Federation’s (GJF) will soon issue smart cards for the jewellers and their staff with the objective of authenticating jewellers’ status and facilitating hassle-free movement across India.
GJF is a national trade federation for the promotion and growth of trade in gems and jewellery across the country. “The card is basically for jewellers and their staffs who are our members and it will be launched by year-end. We will have to get government approval for that,” C Vinod Hayagriv, chairman, GJF told FE.
The card is to be produced when challenged by government authorities. The card is to be recognised by the government as a valid proof and identification. It aims to create transparency and accountability for the industry. “We are intending to issue about 50,000-1 lakh cards in the near future,” he said.
The card will have customised design and security measures incorporated so that it is not easily copied. The card will hold up to 64kb of data. Complete details of a jeweller will be incorporated in the card, he said.
“In times of recession, it is important we take steps to protect our industry by improving productivity and enhancing transparency and ethical profitability,” he said. Similarly, the federation will shortly expand its trustmark initiative to other major cities. The trustmark is an assurance to a customer of the commitment of the jeweller for his quality and best business practice. The ‘Trustmark’ logo will have three categories for a jeweller to participate. The federation also plans to design special GJF coins available starting from 2 grams. (source: Financial Express)
GJF is a national trade federation for the promotion and growth of trade in gems and jewellery across the country. “The card is basically for jewellers and their staffs who are our members and it will be launched by year-end. We will have to get government approval for that,” C Vinod Hayagriv, chairman, GJF told FE.
The card is to be produced when challenged by government authorities. The card is to be recognised by the government as a valid proof and identification. It aims to create transparency and accountability for the industry. “We are intending to issue about 50,000-1 lakh cards in the near future,” he said.
The card will have customised design and security measures incorporated so that it is not easily copied. The card will hold up to 64kb of data. Complete details of a jeweller will be incorporated in the card, he said.
“In times of recession, it is important we take steps to protect our industry by improving productivity and enhancing transparency and ethical profitability,” he said. Similarly, the federation will shortly expand its trustmark initiative to other major cities. The trustmark is an assurance to a customer of the commitment of the jeweller for his quality and best business practice. The ‘Trustmark’ logo will have three categories for a jeweller to participate. The federation also plans to design special GJF coins available starting from 2 grams. (source: Financial Express)
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