Dubai Debt Fallout Leaves Thousand of Indian Families Worried

The $59-billion debt woes of state-run Dubai World, one of the largest global conglomerates, has left thousands of Indian families worried, as the region accounts for half of the country’s $25-billion remittances.

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Gulf countries employ five million Indians, out of the 25 million total strength of the Indian diaspora in 130 countries, and Dubai being a key driver of the region’s economy, a shakeout there is seen unsettling the job market – and the incomes of relatives.

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Market experts have expressed that there will be at least 25-percent contraction in the job market and there may be a ripple effect on most Middle East countries because of Dubai World bust.

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They also said that Middle East meltdown is not a last month generated phenomena  rather it has been there for the past one year.

Infact, people have been coming back to India for the past one year.

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Market experts and policy makers have expressed concern over the prospect of Indians employed in the Gulf losing their jobs.

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However they insist that much would depend on Dubai world Bust’s impact on the real economy there and employment.

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Many relatives of Indian expatriates in the Gulf have expressed concern and worries over the prospect of the loss of jobs in Gulf  in the wake of Dubai World Fiasco !!

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Many of families have taken huge amount of home loans to construct houses or to buy flats.

(With the dependence of paying it through the remittances they generally receive from their relatives working in Gulf).

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Now, they have worries like if their close family member working in Gulf loses the job then it will get impossible to repay the loan amount in full.

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In Andhra Pradesh, which accounts for the largest share of remittances from the Gulf after Kerala, the realty industry feel there is an underlying worry that the Dubai World episode may just be the tip of the iceberg.

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Experts over there feel that things might go from bad to worse when the Dubai companies announce their financial results in December and January and many more could lose jobs.

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Analysts, nevertheless, maintained that while the future plans of Dubai World in India may be affected, the existing ones may not suffer much.

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the country.

Wheat sowing picks up pace across India

Wheat sowing picks up pace across India:

As per the latest government estimate, wheat has been sown in around 13.70 million hectares of land till last week, almost 5% more than the same period last year.

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Sowing in India ’s two main wheat growing province of Punjab and Haryana,which contribute almost 80% of the total country’s production is nearing end.

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Officials believe that  barring delayed harvest kharif crops, cooler temperature in most parts of northern, central and western India added with the recent unseasonal rains should provide an ideal climatic condition for good wheat sowing and early growth.

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The government expects an additional two million tonne of wheat production during the rabi season to offset some of the losses incurred during the kharif harvest.

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However, as per studies done by Indian Council of Agriculture Research, wheat yield can come down by almost 50 kilograms per hectare per day if it is sown very late (beyond December) in northern states.

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The output drop in southern wheat growing states and in Maharashtra and Karnataka is estimated to be around 36 kilograms per hectare per day if the crop is sown very late.

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In Other major Commodities Updates we can read about India’s FM statement on Inflation root cause and launching of in 12 commodities by MCX.

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Inflation due to food items shortage: FM

The current trend in inflation in India is a result of a shortage of food items and not due to a demand-push factor, Union finance minister Pranab Mukherjee told Parliament on Tuesday.

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The food articles index rose an annual 15.6% as at 14 November, up from the previous week’s 14.6% rise.

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The weakest monsoon since 1972 and then floods in parts of the country have hurt farm output and pushed up food prices.

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The finance minister said the government is keeping a close watch on futures trading in commodities.

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The Centre is planning massive investment to boost farm output, the minister said.

MCX launches EFP in 12 commodities:

The Multi-Commodity Exchange of India (MCX) has introduced the exchange of futures for physicals (EFP) transactions in 12 commodities from Tuesday, the bourse said in a release.

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This process will help traders who have already entered into an agreement for physical trade to take position on futures platform for transparent pricing mechanism.

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In EPF, if the quality of the commodity traded does not match MCX specifications, both parties can then decide on a premium or discount to the settlement price on the futures platform on the delivery date.

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The Centre’’s fiscal deficit more than doubled to Rs 2.45 lakh crore in the first 7 months of 2009-10.

With this, fiscal deficit during April-October, 2009 reached over 61% of the targeted level of over Rs 4 lakh crore for the current fiscal.

However, the government projected fiscal deficit of 6.8% of GDP for the current fiscal while with GDP likely to increase with a high growth rate of 7.9% recorded in Q2, there is more room to contain the fiscal deficit within the targeted level.

Meanwhile, the fiscal deficit already crossed over 87% of the targeted amount for entire 2008-09 as the government was expecting fiscal deficit of just 2.5% of GDP at this point of time last time.

Notably, Fiscal Deficit is a economic phenomena when a government’s total expenditures exceed the revenue that it generates (excluding money from borrowings).

Deficit differs from debt, which is an accumulation of yearly deficits.

Moreover, when excise duty was cut by 6% and service tax by 2% from December onwards and plan expenditure rose as part of stimulus package, the government revised its target to 6% of GDP, which later turned out to be 6.2%.

The rise in fiscal deficit could be gauged from the fact that tax revenues decreased by around 8% to 2.13 lakh crore till October this fiscal against Rs 2.32 lakh crore a year ago.

The Centre’s revenue deficit, which is a gap between revenue receipts over revenue expenditure like salaries, rose by 138 per cent to stand at Rs 20.76 lakh crore during April-October, 2009.

Hello Friends here we come up with our another write up on “SMC Gyan Series”.

Topic is ECONOMIC INDICATORS… “Leading the World”.

Here, we would go through the Brief of like what are Economic Events & Indicators and important sources of data provider for calculating & determining economic indicators.

 

ECONOMIC INDICATORS… “Leading the World”

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Economic Events & Indicators are statistics that precede an economic event.

The goal is to track the economy & derive a forecast for future performance.

Economic indicators have tremendous potential to generate volume and to move prices of commodities futures as well as the financial markets including Forex.

Tools of Construction: This would include separate sections of statistical methods including

- Calculating indices and re-basing them,

- Differences between arithmetic and geometric averages,

- Standard deviations,

- Regression analysis,

- Correlation and causation,

- Margins of error in statistics calculations and

- What this means for interpretation, subsequent revisions and why they happen.

Economic indicators include various indices, earnings reports, and economic summaries.

Examples : unemployment rate,  housing starts,  Consumer Price Index (a measure for inflation),  Consumer Leverage Ratio,  industrial production,  bankruptcies,  Gross Domestic Product,  broadband internet penetration,  retail sales,  stock market prices,  money supply changes etc;

The important sources of data provider for calculating & determining economic indicators are like:

- Bureau of Labor Statistics,

- Census of Construction Industries,

- Bureau of Economic Analysis &

- Reserve Bank.

The value of the indicator data is considered important if it presents new information, or is instrumental to drawing conclusions which couldn’t be drawn under other reports or data.

Each indicator is marked with “H”-”M”-”L” (High-Medium-Low), according to its level of importance, as commonly considered.

Next Blog we would try to know about the classified categories of Economic indicators in details and what is Time Era.

Stay Tuned for more and more on this

However For More latest Industry,Stock Market and Economy News Updates, Click Here

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the country.

Wheat Rises as Dollar Drop Boosts Outlook for U.S. Export Sales

Wheat Rises as Dollar Drop Boosts Outlook for U.S. Export Sales:

Wheat rose to a one-week high on speculation that prospects for U.S. exports gained because the dollar declined this month and as demand increased from investors seeking a hedge against inflation.

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Wheat prices also got a boost from concern that some U.S. growers were unable to plant winter crops because unusually heavy rainfall delayed the soybean harvest and hindered access to the fields.

U.S. shipments have lagged behind the year-earlier pace because of rising world stockpiles and because competing suppliers offered grain at lower prices.

Wheat also gained as speculative investors including index- and hedge-fund managers bought commodity futures that they deem to be undervalued, including wheat.

In Other major Commodity Update, there is information about Soybean Prices rising on surging Chinese demand for U.S. Supplies.

Soybean Prices Rise on Surging Chinese Demand for U.S. Supplies:

Soybean prices rose to a five-month high on surging demand for animal feed and cooking oil made from oilseeds shipped by the U.S., the world’s biggest producer and exporter.

From Sept. 1 to Nov. 19, U.S. export sales of soybeans rose 58 percent to 27.1 million metric tons (995.4 million bushels) from a year earlier, and China accounted for 62 percent of the total, government data show.

A drought this year in Brazil and Argentina, the largest shippers of feed made from the oilseed, boosted consumption of U.S. supplies.

U.S. sales of soybean meal from Oct. 1 to Nov. 19 surged 72 percent to 4.7 million tons from a year earlier, Department of Agriculture figures show.

Shipments of soybean oil have tripled.

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Hello Friends here we come up with an extension of our previous blog, “Seasonal Index……“Time is Money” Part 2

In previous Blog, we had touched upon the aspect like analysis part of seasonal patterns in predicting the future prices of the commodity.

Seasonal Index - “Time is Money” Final Part

In this Blog, we would read about that how an annual average method can be used to generate a seasonal pattern in predicting the future prices of the commodity and seasonal pattern in the year 2009.

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Annual Average Method

The annual average method can be used to generate a seasonal pattern as well as predicting the future prices of the commodity.

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This seasonal price index is derived by calculating the annual average price, and then by expressing the price for each month during the year as a percent of the annual average.

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Here, the data which is used to derive the seasonal price patterns are the monthly prices taken between the year April’2004 & November’2009.

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The monthly indexes over the years are averaged to derive a price index that represents those years.

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An example of the technique is presented in Table 1.

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The seasonal price index table suggests that the index increases from the month of June, the time the buyers enter the market with full potential & reaches the highest till the end of the year.

In The Year 2009

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The prices movement of this year almost followed the seasonal pattern, except few months.

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The supply constraints of lower output, as farmers opted for cotton, worked as a high base effect for the futures with a flat production figure of 8.5 lakh tonnes in 2008-09.

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The recovery in prices was noticed owing to the unforeseen failure of monsoons & comfortable stocks of 25-30 lakh bags from last year for which guar prices traded higher all through-out the year.

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This commodity created a history as it made a life time high, since the date of launch at national bourse, on reports that the output is estimated at 30-35 lakh quintals, down 62% due to factors like scanty rains in the major growing areas.

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Stronger Rupee along-with volatile Crude oil prices brought some corrections in export earnings from Guargum markets in Europe/US.

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However, upcoming demand for by-products such as churi & korma from international markets kept the millers interested in processing guar.

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In a nutshell, if investors want to spin their money safely & stabilize their net returns, using seasonal Index can prove to be a fair advantage.

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Just a year after the global downturn  derailed  Dubai’s explosive growth, the  city is now  so  swamped  in  debt that  it’s  asking  for a  six-month  reprieve  on  paying  its bills.

Dubai Debt Fears Grip World Markets

This has cast a shadow on a world only just emerging from the worst economic crisis since the 1930s,  knocking markets  from Sydney to Sao Paulo and raising questions about Dubai’s reputation  as a magnet for international investment.

For India, which has tens of thousands of its citizens living  and working in the emirate,  the concerns are more direct:  thousands of its expats staring at job losses and  the economy, sharply reduced trade.

India, which gets nearly a quarter of the remittances from the United Arab Emirates and  has lakhs of laborers working in the region, could be worse off than most other nations  if the crisis escalates into a full-blown one  like the Russian or Argentinean crises of the past.

India’s exports to the UAE stood at $23.92 billion in FY09.

It is very likely that we may see one more leg of job losses in Dubai.

The only consolation for the region is that Abu Dhabi is booming.

Indian shares and the rupee fell in sync with other global markets where investors are fleeing for safety after Dubai debt trap concerns.

The Bombay Stock Exchange benchmark Sensex on Friday tumbled over 451.63 points to 16,403.30 points in the first ten minutes of trading on hectic selling by funds in line with weak global cues and concerns over Dubai’s debt.

Similarly, the wide-based National Stock Exchange index Nifty dropped by 140.50 points to 4865.05 points.

Brokers said the selling focus was more on banking and realty stocks after Dubai’s debt problems revived concerns about the global financial system and rattled markets across Europe and Asia.

Indian rupee fell 24 paisa to 46.55 against the dollar.  The MSCI Emerging Markets Index lost 1.4%.

Most European indices were about 2% lower after Asia tumbled.

The Shanghai Composite Index slumped 3.6%, its biggest drop since August, and Brazil’s Bovespa Index slipped 1.1%. U.S. markets were closed for the Thanksgiving holiday.

Credit-default swaps tied to debt sold by Dubai rose as much as 131 basis points to 571.

“Dubai isn’t doing risk appetite any favours at all and the markets remain in a vulnerable state of mind,” said Market analysts.

“We’re still in an environment where we’re vulnerable to financial shocks of any sort and this is one of those.”

Hello Friends here we come up with an extension of our previous blog, “Seasonal Index……“Time is Money” Part 1

In previous Blog, we had touched upon the aspect like what is seasonal pattern and reasons for studying seasonal variation.

Seasonal Index……“Time is Money”

Now we would see the analysis part of seasonal patterns in predicting the future prices of the commodity.

The Analysis

Crop prices tend to follow a general seasonal pattern of their own, identifying the major turning points in prices, setting their seasonal low at harvest followed by a post-harvest rally, where the supply of the crop is fixed and consumption gradually takes that supply, causing prices to rise.

However, major market shocks or powerful influencing factors like monsoon, production figures, stock levels & demand may significantly alter seasonal patterns & the prices may experience the special condition.

This is what happened with the Guar prices.

The ‘Guar’ legume plant is rain-fed monsoon crop.

Monsoon has been the decisive factor for the trend in guar futures.

The sowing period is July and August right after the first shower of the monsoon and the harvesting period is September and November.

Fresh arrivals of the crop from Haryana and Punjab begin immediately after the first week of September and continue till the month of December.

One example would be redeploying capital in Guar futures in two phases by taking selling positions from April as monsoon sets in – boosting the production levels, and buying in the month of June when the rally begins.

If we follow the price index & compare it with the actual, then it is seen that the prices have followed the path of the seasonal trend many times in this year & have given their best highs from month of June to August.

The seasonality shown in the below graphs depicts that the positive wave has given a satisfying return on investment in both of these commodities, & the strategy adopted of “Sell in April” makes this clear.

Guar Seed Seasonal Index vs Actual

Guar Seed Seasonal Index vs Actual

Again, the investors taking fresh buying positions from the end of June & holding till the end of the year have had always hard-earned profits.

Stay Tuned for more on this.

In next blog we would read about that how an annual average method can be used to generate a seasonal pattern in predicting the future prices of the commodity and seasonal pattern in the year 2009.

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Global Slowdown Caused Slump in Growth Rate of the Demat Accounts

Despite the blistering pace kept by the equities market in the past 10 months, the rise in the number of new retail investors has slowed down.

According to the data from National Securities and Depositories Limited, the growth rate of demat accounts has declined to 6 per cent, compared with 13 per cent last year.

Experts attribute this to the overall slowdown in the economy.

As per experts a prolonged, dull phase in 2008 made investors jittery about investing in the equities market.

Also, as many individuals were scared of losing their jobs, so they did not intend to invest more.

There has been an average growth of 14.75 per cent in investors opening demat accounts till 2008.

Financial intermediaries such as broking companies, whose fortunes are directly linked to the markets, have witnessed subdued sentiments in the equity space from retail investors.

Experts cited 2008 market crash and the global financial meltdown as the reason for this negative development.

Moreover recession of last year had demotivated and scared the retail investors good enough to drive them away from the further investing.

This caused enormous loss for Financial intermediaries and most of the brokerage houses had to shut shop and retrench many staff too.

“The confidence of the retail investors is yet to be restored. Even in the case of new initial public offerings, only the institutional part is getting oversubscribed,” said Jagannadham Thunuguntla, head of research at SMC Capitals.

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the globe.

Bull run in commodities may continue

Bull run in commodities may continue:

Spurt in prices to be driven by dollar weakness, rise in demand and low supplies.

The global bull run in commodities is likely to continue through next year due to dollar weakness, supply restraint and, eventually, a pickup in demand.

Crude oil prices are also up 74 per cent, but the energy complex as a whole is down, as natural gas prices are weighed down by massive oversupply.

Precious metals have also risen 37 per cent.

The base metals complex has performed well this year, driven by the rebound in growth in China, although some of the increased demand has gone into inventory.

Sugar and soybeans have been the exception in 2009, rising sharply while the rest of the agricultural complex underperformed.

This was largely on supply issues; improved crops in 2009-10 are expected to flood the market, dampening prices.

In Other major Commodities Updates we can read about Govt estimation about the Edible oil output which says that Edible oil output may dip 7.4% in 2009-10.

Edible oil output may dip 7.4% in 2009-10:

The government today said edible oil output is likely to decline 7.4 per cent to 7.96 million tonnes in the 2009-10.

Edible oil production, last year, stood at 8.6 million tonnes.

Oil season runs from November to October.

Production/net availability of edible oil from all domestic sources is estimated to be 7.96 million tonnes in the 2009-10,” Minister of State for Agriculture K V Thomas said.

The demand of edible oil in the country is estimated to have increased to 17.79 million tones this year, he said.

The domestic edible oil production is likely to decline following a dip in oilseeds production, which is estimated to be 15.23 million tonnes in the kharif season against 17.88 million tonnes in the last season, the official data showed.

Thomas said, “There is a wide gap in the production and demand of edible oil in the country and imports are resorted to bridge the gap.”

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El ministro del Acero, Virbhadra Singh, ha declarado estar vigilando las importaciones de acero a India después de las quejas de las grandes acereras nacionales apuntando hacia un dumping masivo de China y Europa del Este. “Estamos vigilando de cerca las importaciones, y tomaremos medidas si notamos grandes aumentos en las cifras de importación”, declaró el ministro.

La industrial nacional ha señalado que a pesar del aumento de la demanda del 9%, no se ha producido un incremento en precios.

Fuente: The Economic Times  (OFECOMES) 23/11/09

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the country.

'Futures trading in rice, sugar and pulses should be banned'

‘Futures trading in rice, sugar and pulses should be banned’:

A parliamentary panel today suggested that futures trading should be banned in case of wheat, rice, sugar and some pulses till the country becomes self sufficient in these food items.

The Estimates Committee asked the government to bring a new legislation to control the retail prices of essential commodities like rice,wheat, pulses, edible oils, sugar, milk and vegetables.

On futures trading, the report said: “Since food security of the country is at the stake, the Committee recommends that futures trading in wheat, rice, tur dal, urad dal and sugar should be banned till the country achieves self-sufficiency in the production of these items on a continuous basis”.

In Other major Commodities Updates we can see exports of Spice declining and on the other hand price of pulses rising up 80% in a year time.

Spice exports decline 1.3% in April-October:

Exports of spices fell 1.3 per cent in volume and 1.6 per cent in value during the April-October period of the current financial year.

According to the latest estimates of Spices Board, total exports in the period were 280,885 tonnes valued at Rs 3,031.59 crore against 284,560 tonnes valued at 3,080.25 crore in the same period last year.

Pepper exports suffered a serious setback as the figures dropped to 11,500 tonnes valued at Rs 179.16 crore as against 14,750 tonnes valued at Rs 246. 70 crore in the same period last year.

Export of chilli also declined to 100,500 tonnes valued at Rs 706.50 crore as against 121,500 tonnes valued at Rs 660.17 crore.

Coriander exports had a better performance at 25,250 tonnes valued at Rs 128.12 crore against 17,100 tonnes valued at Rs 116.80 crore.

Pulse prices rise up to 80 per cent in one year:

The government today said prices of pulses have surged by up to 80 per cent in the national capital over the last one year.

While prices of tur have gone up by 80 per cent in the last one year to Rs 90 a kg, that of moong dal surged 74 per cent to Rs 82, according to the data presented by Food and Agriculture Minister Sharad Pawar in a written reply to the Lok Sabha.

Even import of about 16 lakh tonnes of pulses between April and October has not eased pressure on the prices, the data showed.

Not just pulses, prices of sugar have almost doubled to Rs 38 a kg.

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Los gobiernos europeos están retirando los incentivos a los mini coches fuel- efficient, lo que está provocando que los gigantes automovilísticos del país estén revisando a la baja sus previsiones de exportación. Hyundai y Maruti Suzuki, ambos exportadores masivos, venían presentando buenos resultados debido en gran parte a la política de los países de la Unión Europea, que se ha desarrollado durante ocho meses. Durante ese periodo, las exportaciones de automóviles se incrementaron un 32%, comparando con el mismo periodo del pasado año.

La demanda del A-Star, i10 e i20 era muy elevada en los países europeos, que suponían un 80% de los coches exportados allí. Países como España, Alemania (el mayor mercado para los automóviles indios), Francia, Austria, el Reino Unido y Holanda ofrecían ayudas de más de  5.000 euros para comprar automóviles eficientes energéticamente -que no emitieran mas de 160 gramos de dióxido de carbono por kilómetro-. Ahora, debido a recortes presupuestarios en todos los países, se están recortando estas medidas. Sólo mercados más residuales como Holanda y Reino Unido continúan ofreciendo estos incentivos.

El presidente de Hyundai Motor India, Han-Woo Park ha declarado que “Nos centraremos en el mercado doméstico  para mantener nuestra cuota de mercado del 21% y la producción será ajustada a la demanda”

Los productores de automóviles indios obtienen grandes márgenes y beneficios gracias a las exportaciones. Hyundai y Suzuki Maruti se beneficiaron enormemente de la tendencia global hacia los coches energéticamente eficientes que comenzó hace algunos años. Los márgenes de la exportación son casi el doble respecto a los de las ventas en el mercado doméstico.

 Fuente: Business Standard  (OFECOMES) 19/11/09

Hello Friends here we come up with the Latest News round up from Indian Economy and various industrial Sectors of the country.

News Round Up

Economy

·  Wholesale price of food items rose 14.55% for the week ended November 7 from a year earlier due to dearer cereals, dairy items as well as mutton and eggs.

However, wholesale prices of fuel-related products dipped 1.51% in the week under consideration, compared to the corresponding period of the previous year.

Oil & Gas

· Cairn India and its joint venture partners have decided to take up 4 dimensional (4D) seismic survey of Ravva field in the Krishna-Godavari Basin to further explore oil and gas reserves.

· Liquefied gas importer, Petronet LNG Ltd (PLL), is keen to acquire up to 10 per cent stake in ONGC Petro-additions Ltd (OPaL), which is setting up a cracker complex in Gujarat.

OPaL is, a Rs 12,440-crore petrochemicals project, being set up by ONGC at Dahej in Gujarat.

Infrastructure

The Adani group-promoted Mundra Port and Special Economic Zone (MPSEZ) is all set to develop a non-LNG port at Hazira.

Hazira Port, which is a joint venture of Shell Gas BV and Total Gaz Electricite Holdings France, issued a letter of intent to the Adani group for developing the port in the booming southern Gujarat industrial belt.

Capital Goods

· State-run Bharat Heavy Electrical (BHEL) has set up a new transformer manufacturing facility at Bhopal in Madhya Pradesh.

This new facility would enable BHEL to produce an additional 12,000 MVA (mega volt ampere) of transformers per annum.

· Pollution control equipment maker Thermax bagged an order worth Rs 477.77 crore from an Orissa-based company for construction of a captive power plant.

Aviation

· The Vijay Mallya-led Kingfisher Airlines led the chart of the loss-making carriers by reporting a massive Rs 1,602 crore in losses in 2008-09, followed by Jet Airways with a loss of Rs 1,032 crore.

Oil Drilling

· Jindal Drilling & Industries has bagged an order worth Rs 635 crore from Oil and Natural Gas Corporation (ONGC) for hiring a drilling unit for five years.

Metal

· Tata Steel, the world’s sixth largest steel maker, is raising its annual iron ore production by 55 per cent to 17 million tonnes in India over the next two years.

The expansion is expected to cost about Rs 1,100 crore.

Information Technology

·  Satyam Computer Services (rebranded Mahindra Satyam) has received legal notices from 37 companies claiming a refund of $265 million (approximately Rs 1,230 crore), allegedly given as temporary advance.

Automobile

· Mahindra & Mahindra, India’s largest manufacturer of sports utility vehicles, is believed to be in advanced talks with the Tamil Nadu government for establishing an integrated auto facility in the state.

Forging

·  The Kalyani Group’s flagship company Bharat Forge is planning to make a big foray into the power sector with an investment of up to Rs 50,000 crore and a targeted generation capacity of up to 10,000 Mw, over the next 10 years.

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Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the country.

Rabi sowing picks up in State

Rabi sowing picks up in State:

The recent rain in several parts of Karnataka seem to be playing a key role in rabi sowing with farmers going in for large-scale coverage of jowar, Bengal gram and sunflower, particularly in the northern districts.

As sowing is in progress, data from the Agriculture Ministry shows that rabi crops were sown on 27.05 lakh hectares of land accounting for 73 per cent progress against the target of 37 lakh hectares as on November 18.

Sowing of maize, wheat, Bengal gram and sunflower continued in the northern districts while transplanting of paddy and sowing of black gram was in progress in parts of Dakshina Kannada and Udupi.

Bengal gram has been sown on 8.78 lakh hectares of land against 7.67 lakh hectares during the corresponding period last year, while jowar, the major rabi crop, has been sown on 9.25 lakh hectares, wheat on 1.9 lalkh hectares, and sunflower on 2.90 lakh hectares.

Overall coverage of pulses such as Bengal gram, horse gram, black gram, green gram, cowpea and avare stood at 9.93 lakh hectares against the coverage of 8.99 lakh hectares last year.

However, the area under cereals — rice, jowar, ragi,maize, wheat, and minor millets — trails at 12.32 lakh hectares against 14.39 lakh hecatres during the corresponding period last year.

In Other major Commodities Updates we can see  FMC has recently instructed bourses to ensure compliance of the PMLA and Sugar production in India may exceed estimated figures.

Commodity bourses must follow PMLA norms : “FMC”

In order to step up the regulatory grip on commodity derivatives market, Forward Markets Commission (FMC) has recently instructed bourses to ensure compliance of the Prevention of Money Laundering Act 2002 (PMLA) by their members.

“This is more of a pre-emptive step to prevent unscrupulous money coming into our (commodity futures) market,” BC Khatua, chairman, FMC, said.

Sugar output may beat estimates “Survey”:

Sugar production in India, the world’s second-largest grower, may be 11 percent more than estimated after farmers boosted planting and yields improved because of increased fertiliser use.

Output may jump to 17.68 million metric tonne in the season started Oct. 1, according to interviews with 631 farmers across six states by Geneva-based SGS SA for Bloomberg.

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RIL See Retail Sector as an Major Value Creator : Ambani

Reliance Industries has identified retail sector as an important component of its five-platform roadmap for value creation.

The other value creators include conventional and renewable energy space, innovation and rural transformation, RIL chairman Mukesh Ambani said.

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Reliance’s efforts would be on expanding the edifice created by Reliance Retail at the customer end and reinforcing supply chain and logistics,” the chairman said.

Ambani added that Reliance Retail would expand to new cities, markets and form strategic alliances.

This would be done through nearly 1,000 stores, while it has 900 stores across 86 cities.

The retail company has run up losses over Rs 450 crore in last fiscal.

Ambani said RIL would diversity its conventional energy space with new accumulations in three years.

RIL proposes to accelerate their campaign in the Krishna-Godavari basin,as per the chairman.

Meanwhile, the gas production levels have crossed six billion cubic metres and the D6 field is slated for plateau production by the second half of the year 2010.

Oil production from the D26 field has 2.8 million barrels with daily peak production expected by the end of the year.

With current cash balance of nearly Rs 19,420 crore, the company expects to be debt free in 21 months, Ambani said.

Even in difficult economic environment, RIL’s capital expenditure was Rs 24,713 crore ($4.9 billion).

However, the stock market was not enthused.

On the BSE, RIL stock saw a marginal drop of 0.65 per cent to close at Rs 2,133.75 per share.

“Whatever Mr Ambani has said is old. There is nothing to cheer investors.However, overall sentiment is positive.”

Jagannadham Thunuguntla, head, SMC Capital, and other market analysts feels so.

By Luzi Ann Javier & Zeb Eckert

The Vision Foods

Indian rice imports next year will create a “fairly major swing” in global trade and push prices higher, commodities supplier Olam International Ltd. said.

The South Asian nation may import 2 million to 3 million metric tons, Sunny Verghese, chief executive officer of Singapore-based Olam, which trades commodities including rice, coffee and sugar, said on Friday. India will export 1.5 million tons next year, compared with an average of 4.5 million tons from 2002 to 2008, according to U.S. Department of Agriculture figures.

Recent floods in the country’s south may slash the next harvest, which starts in January, pushing imports to as high as 5 million tons, Tejinder Narang, a commodities analyst and former director of PEC Ltd., an Indian state-owned agricultural trader, said in a phone interview from New Delhi on Friday.

A swing from 4.5 million tons of exports to as much as 3 million tons of imports can have “a very important effect on the price direction,” Verghese said in a Bloomberg Television interview. “Prices are likely to firm given these latest developments.”

Prices may also extend gains if a “strong” El Nino weather phenomenon, which is forming in the Pacific and can parch crops in Asia, affects producing countries, Verghese said.

Import surge

India hasn’t been a net rice importer for two decades, while the Philippines may buy a record 2.45 million tons in tenders for 2010 supplies before the end of the year, boosting competition for supplies and driving prices higher. The global rice trade is estimated to be 29.5 million tons next year, according to the USDA.

The regional benchmark export price for 100 percent grade-B Thai rice has gained 6.9 percent to $561 from this year’s low of $525 in October. It reached a record $1,038 a ton in May 2008 as concerns over supply shortages prompted countries including India and Vietnam to curb exports, sparking food price riots across the globe.

India, the world’s second-largest grower and consumer of rice, lost 18 percent of its crop to drought and is in talks with Thailand and Vietnam, the two biggest exporters, to buy rice, Farm Minister Anand Sharma said Nov. 17. India is seeking as much as 2 million tons of rice, Thailand’s Prime Minister Abhisit Vejjajiva said Nov. 18.

India’s total rice harvest may drop to 69.45 million tons, from a record 84.58 million tons last year, the farm ministry has said.

The country’s next harvest, which begins in January, may plunge to 12 million tons, from 15 million tons a year earlier, Narang said.

That could lower the nation’s stockpiles to a “critical level” of 950,000 tons by October 2010, equal to just four days of the nation’s needs, if the government decides not to import, he said.

Indian government policy requires state food agencies to maintain a total stockpile of 5.2 million tons to ensure the nation’s food security, Narang said.

Against the backdrop of rising global prices, the government on Friday decided against rice import stating it has enough stocks to manage demand despite a shortfall of 15 million tonne in Kharif production.

“We are not importing (rice). We have adequate stocks. We will review if there is any need (in future),” commerce and industry minister Anand Sharma told reporters here after a meeting of the empowered group of ministers (eGoM) on food.

The eGoM, headed by finance minister Pranab Mukherjee, decided to scrap the three tenders, totalling 30,000 tonne, floated by the state-owned trading firms – MMTC, STC and PEC.

The Vision Foods

“The government does not want to buy at such high prices,” a source said adding the option of imports through government channels of exporting countries remains open.

The three government firms had received bids earlier this month with a price range of $372-598 per tonne.

In what appears to be a move to cool international prices, the government has said it would not go in for rice imports as it has enough stocks to manage despite a 15 million tonne kharif production shortfall.

The Vision Foods

The decision not to import comes with a caveat that India can always review the situation. “We are not importing (rice). We have adequate stocks. We will review if there is any need (in future),” agencies quoted commerce and industry minister Anand Sharma telling reporters after a meeting of the empowered group of ministers (EGoM) on food.

The government seems to have decided to take a calculated risk as it would definitely go for imports if it feels the need to control domestic prices which have been rising. It seems to feel that it might be able to wait a while as its procurement has gone off very well and stocks for the public distribution system are more than adequate.

The problem may arise if retail prices don’t level off now that the EGoM headed by finance minister Pranab Mukherjee decided to scrap three tenders, totalling 30,000 tonnes, floated by the state-owned trading firms — MMTC, STC and PEC.

The three government firms had received bids earlier this month with a price range of US $372-598 per tonne. The landed price of these bids at the ports works out to Rs 18-28 per kg against the average domestic price of Rs 22-25.

The government has been considering what is seen to be an ad-hoc figure of 2 million tonnes by way of imports though the actual need is expected to be much lower. With Phillipines having recently gone in for imports, Indian tenders were bound to push up the price.

There is also a tug-of-war over who will foot the bill for losses the state firms will incur. Commerce ministry wants the government to make good the difference between import prices and sale. The food ministry on its part has made it clear that it is busy with procurement and providing space for more stocks will not be easy. There is also a discussion over how imports are to be put into the retail market.

The EGoM decision against rice import, though an about-turn from the earlier government announcement, is being viewed in the trade circles as a strategy to control rising international price. The government may again enter the market at an appropriate time.

Earlier this week, both Mukherjee and Sharma had spoken about the government move to import rice in view of production shortfall and rising food prices.

NEW DELHI — India has scrapped tenders to import rice, saying it has enough stocks to manage despite a harvest shortfall following the worst monsoon in almost four decades.

The Vision Foods

A top-level cabinet committee on food cancelled the three tenders totalling 30,000 tonnes, which would have represented the first imports of the staple by India — a traditional exporter — since the 1980s.

“We are not importing (rice). We have adequate stocks. We will review (the decision) if there is any need,” Commerce Minister Anand Sharma told reporters late Friday after the committee met.

The tenders had been floated by state-owned trading firms MMTC, State Trading Corp and PEC.

However, the Press Trust of India quoted an unnamed official as saying: “The government does not want to buy at such high prices.”

The decision not to import marks a U-turn from a government announcement when Sharma said India was in talks with Thailand and Vietnam about buying rice to offset an estimated summer harvest shortfall of at least 15 million tonnes.

The country of nearly 1.2 billion people produced a record 99.15 million tonnes of rice last year.

Industry officials said the decision to scrap the purchase tenders might be a strategy to cool rising international prices and that the government could seek to enter the market when it was more favourable.

Global prices rose after India announced it was entering the market.

The three state trading firms had been asked to import 10,000 tonnes of rice each.

Domestic rice prices have soared 25 percent in the last four months on supply worries after the poor annual rains, which were followed in some areas by devastating floods that hit crops.

Private traders have already imported at least 400,000 tonnes of rice, in expectation of higher domestic prices, and Indian media reports say the figure is expected to rise.

India is the world’s second-largest rice producer and the shortfall comes after bumper harvests in the two preceding years. However, the country still has comfortable buffer stocks totalling 14.5 million tonnes, nearly triple its target of 5.2 million tonnes.

Source: AFP

SEBI Allows Auctions for QIBs in FPOs

Market regulator, SEBI has introduced a significant change in the way institutional bidders invest in follow-on public offers by allowing allotments through auctions.

The Securities and Exchange Board of India (Sebi) has amended the Issue of Capital and Disclosure Requirements Regulations (ICDR) to allow pure auctions for qualified institutional investors (QIBs) in follow-on public offerings to begin with.

The method may be later extended to initial public offerings.

Under the new method, bidders will be free to bid at any price above the floor price.

At present, allotments are made at the floor price.

Retail investors, however , will be allotted shares at the floor price.

The board also decided that the issuer is free to place a cap either in terms of the number of shares or percentage to issued capital of the company so that a single bidder does not garner all the shares on offer, ensuring a wider distribution of shareholding.

Jagannadham Thunuguntla, Equity Head,  SMC Capitals, said this means an institutional investor can continue to bid above the floor price and the QIB allotment will be made to the highest bidder.

“The intent is to enable companies to mop up more funds. Earlier, even when there were huge subscriptions and huge demand for an issue, the company could not get more money. This becomes more relevant in the context of the recently announced divestment plans and FPOs by the government for public sector units,” he said.

Auction for QIBs is welcome as it would allow risk-taking entities and not just the promoters to be a part of the price discovery process, other analyst said.

A SEBI release issued after the board meeting also said the minimum market capitalisation required by listed firms to sell shares in follow-on offerings has been halved to Rs.5,000 crores  from Rs 10,000 crore.

Moreover, the market regulator has also made it a mandatory that all listed companies would have to furnish audited or un-audited balance sheets on a half-yearly basis within 45 days from the end of the quarter instead of the current yearly basis.

This would imply that Indian companies will be required to disclose balance sheet items.

Shareholders would be able to access the statement of assets and liabilities of the company and its solvency position on a half-yearly basis.

Shareholders would receive immense help in making informed investment decisions now and would be in better position to assess the financial health of the companies, with the implementation of this SEBI regulation of mandating frequent disclosure of the asset-liability position of companies by companies.

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the country.

Govt Decides Against Rice Imports

Govt decides against rice imports:

In a calculated move to signal categorically to the world market that India was not in a desperate situation with respect to rice, the government said on Friday that it will not import rice for now.

The immediate implication of this move is that retail prices of rice, up 15 per cent over last year, will remain firm at least until early next year.

Rice output is estimated to have dropped 15 million tonnes due to poor monsoons this kharif.

The government has, over the last two days, put in place strictures that will force traders to report purchases of more than 10,000 tonnes of rice in a bid to check prices.

Punjab has also imposed stock holding limits on traders and millers for both rice and pulses.

In Other major Commodities Updates we can see how Government has bowed down to demands of Farmers after their mass protest in capital this week.

Government to amend new sugarcane price rule:

The government on Friday said it would amend a new sugarcane pricing rule, bowing to protests held in the capital by farmers demanding higher prices for their produce.

The government would delete the contentious part of the new cane pricing rule, Railways Minister Mamata Banerjee told reporters after a meeting of senior ministers.

Cane farmers believe the new cane price rule, which puts the onus on state governments if they decide to raise the cane floor rates fixed by the federal government, will curtail their bargaining power.

Earlier, Farmers from Uttar Pradesh (UP) state in northern India, which produces almost half of the country’s cane, have been on warpath for about three weeks to press for higher prices, forcing Prime Minister Manmohan Singh to consider changes in fixing cane prices.

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Gold buying cools off after new records

Gold demand declined as prices struck a fresh high, after a slight pick-up seen in off take in the previous session.

However, the most-traded December gold contract hit a fresh record high at 17,284 rupees per 10 grams, before trading 0.12% higher at 17,251 rupees tracking overseas leads.

Meanwhile, it is said that traders were stationed on the sidelines seeking lower prices to stock for the ongoing wedding season while the business of dealers declined by about 50% on year as high prices dented demand.

On the other hand, jewelery demand in India decreased 42% to 111.6 tonnes in Q3 to September, while total demand, which comprises jewellery and retail investment demand, fell 49% to 137.6 tonnes.

Govt Not to Impose Restrictions on Foreign Borrowings

The government ruled out limiting companies from borrowing money from overseas market stating that the rise in foreign money is not a matter of concern at present and there is no such proposal.

However, companies are permitted to raise $500 million annually under the automatic route while infrastructure firms under the approval route can remit up to $100 million for rupee expenditure and for other companies the cap on approval route remittance is set at $50 million.

Meanwhile, capital inflows reached record levels as investors borrow cheap from advanced countries and invest in high-yielding assets in developing countries while this led to speculations that government may put in place a system of auctioning ECBs.

In India, foreign inflows through foreign institutional investors (FIIs), ECBs and foreign currency convertible bonds (FCCBs) have been on the rise, while FDI is not picking up as fast.

On the other hand, on a quarterly basis, the funds raised through ECBs and FCCBs increased by 70% in the September quarter to $4.61 billion while FIIs have put in a record over Rs 71,900 crore in the equities market.

Precious Metals are on Record Setting Spree

As gold rallied by Rs 80 per ten grams to Rs 17,095 and silver firmed up by Rs 110 per kilo to Rs 28,510 due to constant demand from stockiest on account of rising trend  in global market, both gold and silver resumed at a record high on the bullion market.

However, due to worries about future inflation and economic uncertainties,  another record high in the Asian marketgold hit , while Asian stocks bounced back as the bearish dollar kept assets in demand.

Meanwhile, spot gold increased as high as $1,143.95 per ounce in early Asia trade, settling just above $1,140 while standard gold rose by Rs 80 per ten grams to resume Rs 17,095 from the overnight closing level of Rs 17,015.

On the other hand, pure gold also firmed up to Rs 17,185 from Rs 17,105 while silver ready too hardened by Rs 110 per kilo to Rs 28,510 from Rs 28,400 previously.

Earlier due to frantic buying by jewellers in the midst of firming global trend, gold prices touched a record high of Rs 17,300 per 10 gram in the bullion market and Silver coins also set a record by adding Rs 400 to Rs 33,900 for buying and Rs 34,000 for selling of 100 pieces.

Moreover yesterday silver also rose by Rs 1,000 to Rs 28,350 per kg.

Sudden Surge and the record setting spree in the precious metals can be attributed to frantic buying of gold in marriage season.

In between, gold in international markets too has climbed to a record high along with the weakening of dollar.