Foodgrains Output To Up 5.4 Percent On Better Rainfall

Mumbai: India is keen on producing 5.4 per cent more food grains as rainfall in the growing areas improve prospects for a bigger harvest. Production of food grains, including lentils and coarse cereals, are expected to go up to 220 million tonne in the year ending June from 208.6 million tonne a year earlier, the government said today in the Economic Survey for the year ending March 31. A bigger harvest will help to improve local supplies of the grain, helping Prime Minister Manmohan Singh's government to damp the fastest inflation in two years. Increased production may also lower imports, cooling global wheat prices that have risen by a third in the past year on the Chicago Broad of Trade. Chicago wheat prices reached a 10-year high in October in part because India began importing the grain in February 2006 after a six-year gap. Domestic prices rose by more than a fifth as rising demand worsened a production shortfall. The country's wheat reserve had halved to 6 million on November 1. While rains in September encouraged farmers in states of Madhya Pradesh, Maharashtra and Rajasthan to plant wheat early, the crop benefited from rainfall this month, the survey said. Output may exceed 72.5 million tonne, Agriculture Minister Sharad Pawar said February 20. Wheat, India's biggest winter-sown grain, was planted to 28.45 million hectares (70.3 million acres), 7 per cent from a year earlier, the farm ministry said. Still, the country may import 3 million tonne in the year starting April 1 to build stockpile, the Foreign Agricultural Service at the US embassy in New Delhi said in a report dated February 21. State warehouses may hold 3.5 million tonne of wheat on April 1, less than the buffer stock of 4 million tonne. Wheat demand likely to go up to 75.2 million tonne, 1.6 per cent more from a year earlier. The country's inflation has climbed to a two-year high as record economic expansion boosts demand for farm and factory products. Gains in consumer prices paid by farmers are at an eight-year high of 8.94 per cent, while price increases for urban dwellers are the most in six years. The government has in the past month reduced import duties on cooking oils, steel, aluminum, copper, cement and chemicals such as sulphur, and cut prices of auto-fuels. Last week, the government said it will sell 365,000 tonne of wheat at below market prices to cushion consumers from rising food prices.

Guar Exports Rise By 13-pc During Apr-Oct period

Mumbai: India's guar gum exports in April-October went up 12.6% to 109,481 tonne, compared with the year-ago period, the latest figures released by Agricultural Processed Food Products Export Development Authority indicate. The country has reported the 97,211 tonne guar gum exports during April-October. In the value terms, total guar gum exports in April-October were valued at $144.71 million, up 19.37 per cent from the year-ago period. High prices of guar seed and guar seed gum during April-October is seen as the reason for plummeting the export growth. Global demand went to Pakistan from India in the last few months in 2006 due to high prices. Pakistan, the second major producer of the crop, offered guar gum at the rates cheaper than those quoted by India. India's export target for 2006-07 (April-March), in value terms, also plummeted to $281.59 million from $283 million earlier. About 51.39 per cent of the revised target has been achieved as of October. In 2006-07 (April-March), exports in quantity terms have been pegged at 275,000 tonne, compared with 186,530 tonne a year ago, due to higher production of guar seed. Guar seed production is estimated at 7.5-8.5 million bags (1 bag=100 kg), up from 5.5-6.5 million bags. India produces around 80 per cent of the world's guar gum, which is extracted from guar seed.

Pepper Futures Market Continues To Witness Downward Trend

The pepper futures market continued to witness downward trend on February 26 owing to the uncertainty over delivery of the goods by the sellers. The source said that space would be available only from March 5 and the time available between this date and the maturity would be too short a period for making the delivery. Some good quantity were traded on February 26. Exporters covered from the primary market at lower levels.
On the NCDEX, March contract fell by Rs 203 a quintal to close at Rs 12,286. The fall in other contracts was from Rs 159 to Rs 199 a quintal. On NMCE, March contract dropped by Rs 283 a quintal to close at Rs 11,603. The decline in other contracts was from Rs 49 to Rs 198 a quintal. The total turnover rose by 74 per cent on the NCDEX to 20,703 tonnes from 11,847 tonnes at last weekend close. On NMCE, it moved up by 1,960 tonnes to close at 3,603 tonnes. The total open interest on NCDEX went up by 476 tonnes to 30,493 tonnes, while the March position dropped by 294 tonnes to 13,398 tonnes against a total stock position of around 6,000 tonnes of the exchange. April position increased by 442 tonnes to 9,247 tonnes. On NMCE, total open interest dropped by 122 tonnes to 4,911 tonnes of which the March position was at 3,783 tonnes. In the international market Vietnam was offering FAQ pepper at $ 2,400 a tonne (f.o.b) while 550 GL at $ 2,550 a tonne (f.o.b). ASTA grade is not yet ready.

Vietnam might start offering it from April. Indonesia was offering Lampong Asta at $ 2,800 a tonne (f.o.b). In tandem with the futures market trend the spot prices dropped by Rs 100 a quintal to close at Rs 11,500 (un-garbled) and Rs 12,100 (MG 1) on February 26.

CTC Leaf And Dust Receive Good Demand

In all the three auction centres of North India, CTC leaf and dust teas have been getting good demand. As the bulk of the offerings were of the end season varieties, prices followed quality. Nominal weight of orthodox teas were sold well. There was a fair enquiry from shippers to the CIS countries. The North India market was active. The Sri Lankan orthodox market in Colombo too witnessed further firming up of prices for all categories with substantial international demand. The total crop of Kenya, Sri Lanka and Bangladesh up to December 2006, taken together, was 31.1 million kg, lower than the corresponding period of the previous year. This may have an impact on the international market. Weather conditions in North India continue to be favorable to a healthy start to the cropping season. The first new season CTC invoices from Dooars and Terai have seen attractive prices ranging from Rs 160-200 per kg. Selected hard withered manufactured Orthodox tea from Terai sold up to Rs 475 per kg. From April 2006 to January 2007, the total auction average for all three North Indian centres cumulatively was Rs 72.24 per kg as compared to Rs 64.44 per kg in the previous season.

Govt May Go In For Another Cut In Edible Oils Import Duty

Mumbai: The Government is likely to slash import taxes on the edible oil for a second time in five weeks to boost supplies and curb inflation that's at a two-year high. Rising prices of farm and manufactured goods have become a danger for the Congress party-led coalition as it prepares to face seven state elections this year. The government is stocking up wheat, sugar, pulses to augment supplies and keep inflation at below 4 per cent. Lower import taxes by India likely to shore up gains in palm oil prices in Malaysia and soybean oil in Chicago, analysts said. Palm and soybean oil futures have each risen almost 20 per cent in the past six months on increased demand for oilseeds to make into alternative fuels. Palm oil on the Malaysia Derivatives Exchange advanced 0.5 per cent to 1,934 ringgit. The commodity averaged 1,559 ringgit ($445) a tonne last year. Prices of refined bleached and deodorised palm oil have gone up 17% in the past year on the National Commodity & Derivatives Exchange to Rs 440 per 10 kilograms. Refined sunflower and peanut oils have each gained 19 percent in the past six months on the Multi Commodity Exchange of India. The key inflation rate rose to a two-year high of 6.73 per cent in the week ended February 3.

Govt Lifts Ban On Dollar Chana

New Delhi: The government has done away with the ban on exports of dollar chana to contain a fall in its prices and protect farmers' interest. In June 2006, the government had imposed a blanket ban on export of pulses to control their rising prices. This particular variety is mainly grown for exports. This particular variety of chana is mostly grown in Madhya Pradesh and Andhra Pradesh. Following the ban, prices plummeted from Rs 4,000-4,500 a quintal to Rs 2,500, acting as a disincentive to growers.

Edible Oil Imports Up 36%

The country imported 312,584 tonne edible oil in January, an increase of 36 per cent from the corresponding month last year, said the Solvent Extractors' Association. However, the edible oil imports in January were 15% lower from December, according to the association's data. Non-edible oil imports during January were 36,110 tonne, up from 23,626 tonne a year ago, but down from 72,890 tonne in December. The country's November-January edible oil imports stood at 932,214 tonne, up 20 per cent compared with the same period a year ago. Non-edible oil imports during the three months were 158,792 tonne, up 7.8 per cent on year. Industry officials said edible oil imports had risen sharply in December in the wake of lower kharif oilseed output estimates. Industry estimates peg India's kharif oilseed output at 12.3 million tonne down 1.4 million tonne on year. In the current oil year which started November, edible oil imports are seen at 5.0-5.1 million tonne, up 700,000 tonne from last year due to the expected decline in kharif oilseed output. In the year ended October 31, the country had imported 4.42 million tonne edible oil, down 12 per cent on year due to better domestic availability. India imposes 70 per cent import duty on crude palm oil and 45 per cent on crude soyoil. Prior to August 14, the duty on crude palm oil was 80 per cent. The reduced duty on palm oil, which was to be earlier valid only till December 31, has been extended for an indefinite period to check spiralling prices of essential food items.

Pre Open Market Commentary

Indian market is likely to open on firm note today. Yesterday, market ended mixed amid higher volatility due to the issues regarding inflation and interest rate. BSE sensex closed at 14009.90 down by 81.08 points while Nifty was up by 2.55 points to close at 4047.10. The outlook for the market is continued optimism on back of positive global cues.

Wednesday, US markets surged due to lack of overly hawkish commentary from Fed Chairman Bernanke eased the worst of fears about a possible rate hike. DOW ended up 87.01 points at 12741.86 and NASDAQ rose by 28.50 points to close at 2488.38.

Indian ADRs closed in green on Wednesday. In the technology sector, while Sify ended up 3.28%, Wipro rose 1.24% and Infosys surged 3.08%, Satyam jumped 3.94%. Tata Motors closed up 2.16%. Among banks, HDFC Bank added 0.81% and ICICI Bank closed higher 3.24%. In the telecom space, VSNL rose 1.74% while MTNL ended up 4.42%.

The major stock markets in Asia are trading higher on Thursday. Nikkei 225 index was adding 92.33 points at 17844.97. KOSPI gained 9.51 points at 1445.61 and Straits Times advanced 59.74 points at 3241.95. Oil prices closed around $58 a barrel.

Today, Nifty has support at 3990 and resistance at 4,125 and BSE Sensex has support at 13970 and resistance at 14,335. However, it is our advice to watch trading session carefully.

FIIs were net sellers to the tune of Rs239.60crores in equity (provisional) on 14th February 2007. Mutual funds were net purchasers to the tune of Rs24.87crores in equity (provisional) on 13th February 2007.

Chilli Prices Dwindle On Glut, Low Exports

Guntur: Spot chilli prices likely to fall in the mandies of the country due to low export demand and heavy arrival of new chilli crop. And the arrival of new chilli crop is set to increase in the coming days. The week began on a sad note for mirchi farmers as maximum prices for special and common varieties of fresh mirchi crop fell suddenly, forcing them to go for a panic-selling. The prices of new mirchi crop special varieties crashed on Monday to Rs 4,800 per quintal from Friday's Rs 5,700. However, the minimum price moved up from Rs 3,700 to Rs 4,200 per quintal at the state-run market here. Again, prices of fresh mirchi crop common varieties moved from Rs 5,500 (Friday) to Rs 4,700 per quintal. However, the minimum price jerked up from Rs 2,800 to Rs 3,000 per quintal. Traders purchased white chillies (talu variety) at Rs 2,500 per quintal (Rs. 2,800 on February 9) and minimum Rs 700 per quintal (Rs 1,000 on Friday). On Thursday, maximum and minimum prices paid per quintal of special mirchi were Rs 5,600 and Rs 4,100; on February 7 Rs 6,000 and Rs 4,000; on February 6 Rs 6,500 and Rs 4,300, and on February 5 Rs 6,700 and Rs 4,200, respectively. On February 8 farmers sold common mirchi varieties at a maximum of Rs 5,500 and a minimum of Rs 3,400; on February 7 at a maximum of Rs 5,700 and Rs 3,400; on February 6 at a maximum of Rs 6,200 and a minimum of Rs 3,400 and on last Monday at a maximum of Rs 6,300 and a minimum of Rs 3,400 per quintal. The maximum and minimum prices paid for white mirchi on Thursday were Rs 3,000 and Rs 800, respectively; on Wednesday Rs Rs 3,000 and Rs 800; on Tuesday Rs 3,000 and Rs 500 and on last Monday Rs 3,000 and 900 per quintal, respectively. According to the source, 50,000 tikkis (bags) arrived at the market yard hinting at start of the peak season. Over a lakh tikkis arrive at the yard every day during the peak time. He said farmers sold 80,244 quintals at a maximum of Rs 7,400 and a minimum of Rs 3,400 in January.

Chilli Spot Slips By Rs 400

Mumbai: Red chilli on February 8 hit the lower circuit across all the sections in futures trade on the National Commodity & Derivatives Exchange on the back of inordinately high arrivals in mandis. The hot variety plunged by Rs 400 a quintal in the spot market. Moreover, the price decline also witnessed in the futures market was a reflection of the huge slump in spot prices. The country's total chilli production for this season was estimated at 2.2 crore bags (40-45 kg each). But traders now say the output may go up slightly. And this, according to them, may push down the market into a further bearish trend. Even at these lower price levels, buyers are keeping away from the market. Traders, however, are expecting good export demand this year. Guntur is currently seeing a daily arrival of around 20,000 bags, and this is expected to touch a peak of 1 lakh bags by the end of this month. Quality-wise, the crop hitting the markets currently is better than what had been supplied till last month.

Cotton Prices Up 6-pc In A Fortnight

Supply shortage and besides an exponential growth in export demand, helped cotton prices surge 6 per cent across all varieties over the past fortnight. While Bengal desi today jumped to Rs 3,852 a quintal from Rs 3,768 a quintal, V 797 made similarly to touch Rs 3,824 from Rs 3,627 a fortnight ago. J 34 too appreciated substantially to close at Rs 4,527 compared with Rs 4,359 a quintal. NHH and Ira closed higher at Rs 4,584 a quintal (Rs 4,387) and Rs 4,809 a quintal (Rs 4,612) respectively. Additional, prices of H4 perked up to Rs 4,977 a quintal from Rs 4,780, while Shankar 6 closed at Rs 5,146, up from Rs 5005 a quintal two weeks ago. M26 made a substantial gain to settle on February 6 at Rs 4,696 a quintal from Rs 4,471 a fortnight earlier. While explaining the reasons for the price rise, a Mumbai-based leading cotton trader said the daily arrivals had declined from usual 2 lakh bales to 1.25 lakh bales in the period under review. Besides, mills have started buying on fears of a further quality deterioration in the domestically available cotton. And above all, export orders - led by China - had swelled up, market sources said. Recently, Pakistan too has started sourcing cotton from the country resulting in a huge demand and supply mismatch. Cotton exporters have cloaked orders worth 100 tonne of cotton so far this year. Total crop this year is expected to decline to 265 lakh bales from the earlier estimate of 270 lakh bales. So far, the market has witnessed arrivals of 176 lakh bales this season. Volume of trade in cotton has also risen since the ban on tur and urad to 81,12,000 kg, as on February 2, compared with 20,44,000 kg on January 23.

Spice Board To Set Up Spice Park In Guntur, Pepper Park In Kerala

The Spices Board will establish a Spices Park in Guntur, Andhra Pradesh, and a Pepper Park in Kerala. Andhra Pradesh Government asked to allot about 250 acres for the Spices Park. The board will ink an MoU with the State Government the moment it allocates land. The Spices Park would provide value addition to turmeric, cardamom and chillies, which are widely grown in Andhra Pradesh. The Rangachari committee, which submitted its report on Price Stabilisation, has recommended the launch of an insurance scheme for plantation growers. After that the farmers will move on to a different scheme that opens up opportunities in the futures market. Farmers would be encouraged to form collective or self-help groups to participate in the futures market.

Chana Prices Fall

Chana prices slipped on tepid demand, new arrivals, high possibilities of achieving the crop target and fears of ban on futures. Prices in the spot market crashed in the range of Rs 150-250 a quintal on January 2.

Sugar Firms Eye Other Avenues

New Delhi: The revenues and the profits of sugar firms are looking at a shift from their main business, sugar, to cogeneration and distillery. Their October-December 2006 quarterly results indicate that companies are experiencing higher growth rate in either distillery or cogeneration than in sugar. For Triveni Engineering and Industries (TEIL), the revenue from sugar business felll by 12 per cent (from Rs 225.16 crore to Rs 198.06 crore), while the revenue from cogeneration grew at 30 per cent (from Rs 22.48 crore to Rs 29.23 crore) in the third quarter results. For Bajaj Hindusthan (BHL), the revenue from sugar business went up at only 3.54 per cent (from Rs 267.52 crore to Rs 277 crore), while the revenue from distillery business grew at 82.6 per cent (from Rs 15.11 crore to Rs 27.6 crore) for the December 2006 quarter. The quarter also witnessed a huge difference between revenue growth and profit increase for companies. For instance, while the net revenue of BHL grew at 5.95 per cent (from Rs 277.91 crore to 294.47 crore), net profit dropped by 28.7 per cent (from Rs 24.24 crore to Rs 17.28 crore). For Dwarikesh Sugar, while the company's revenue increased by 58.7 per cent (from Rs 40.36 crore to Rs 64.05 crore) its net profit slipped by 43.6 per cent (from Rs 7.63 crore to Rs 4.3 crore). Obviously, sugar prices are down by about Rs 200 a quintal to Rs 1,550 this quarter. The obvious reason for the depressing performance this quarter is the declining sugar prices and the sugar export ban that was lifted in two phases (December 18 and January 11). Companies are expected to perform better in the January-March quarter on account of sugar exports and higher coverage of the ethanol-blending programme.

Cashew Growers To Constitute Global Body

Bangalore: India, Vietnam and Brazil, the world's top three cashew producers, have joined hand to constitute a global alliance for promotion of cashew production, consumption, standardisation of cashew kernel grades, research and development, and validation of quality. These countries are at present in the process of working out the structure of the organisation, which is expected to take a formal shape by July this year. During the International Tree Nut Convention held in Montreal, Canada, in May last year, Antonio Jose Carvalho, president of Sindicaju, Brazilian cashew association, had informally agreed to work with Cashew Export Promotion Council of India (CEPCI), and authorised its chairman Walter D'Souza to initiate talks with Vietnam. Vietnam extended its support for the cause last week, when CEPCI-led trade delegation visited the country. A memorandum of understanding (MoU) to this effect was signed by D'Souza with Pham Van Bien, president, Vietnam Cashew Association (VINACAS), in Ho Chi Minh City on January 25, 2007. The bilateral MoU will be sent to Sindicaju for its formal endorsement and a tripartite MoU is expected to be signed by the heads of the three organisations in Florida, USA, in April this year.

Edible Oil Imports Likely To Go Up On Oilseeds Output Drop

New Delhi: Edible oil imports are expected to go up this year as the country is expected to see a 20 lakh tonne drop in total oilseeds output owing to a 8.8 per cent decline in acreage to 93.66 lakh hectares, according to industry sources. In 2005-06 (November-September), the country had imported 44 lakh tonne of edible oil. While rabi oilseeds output is expected to drop by 11 per cent this year because of a fall in acreage by 8.8 per cent, kharif oilseeds output is estimated to decrease by 8.6 lakh tonne to 128.4 lakh tonne. While rapeseed, mustard, groundnut, sunflower, linseed and safflower are the major rabi oilseeds. Soyabean, sesamum, niger and castorseed are the major Kharif oilseeds, which account for nearly 65 per cent of total oilseeds acreage and about 60 per cent of the country's oilseeds production. According to estimates by the Central Organisation for Oil Industry and Trade (COOIT), rabi oilseeds output is likely to decline by 11.3 lakh tonne to 91.4 lakh tonne this year. The estimates are an indication of the possible rise in edible oil prices, which forced the government last week to slash import duties on various categories of edible oils by 10-12.5 per cent. Among the oilseeds, production of rapeseed-mustard is expected to drop from 67.7 lakh tonne to 58.5 lakh tonne. Acreage of oilseeds has declined in most states over the last year. In Rajasthan, acreage of rapeseed-mustard has gone down to 28.97 lakh hectares from 31.12 lakh hectares, in Madhya Pradesh and Chhattisgarh it has declined from 10.24 lakh hectares to 8.36 lakh hectares, in Uttar Pradesh it has gone down from 10.21 lakh hectares to 7.7 lakh hectares. In mustard-growing areas, farmers have grown wheat and chana following a bullish trend in these commodities. Production of groundnut is expected to decline marginally from 18.5 lakh tonne to 18.4 lakh tonne. The production of sunflower is expected to decline from 10.6 lakh tonne to 9 lakh tonne. The production of safflower seed is likely to decline from 2.1 to 2 lakh tonne while that of linseed could decline from 2 to 1.7 lakh tonne. However, the production forecast of sesame seed continues to be at last year's level of 1.8 lakh tonne.