Chilli, Jeera Hit Upper Circuit

Mumbai: Buoyed by the tight supply at the Guntur spot markets, chilli futures on NCDEX hit the upper circuit at 3.67 per cent to Rs 4,185 per quintal. Budget 2008-09

Jeera also hit the upper circuit of two per cent at Rs 9,527 per quintal on improved buying activities in spot markets. Robust export demand on the back of thin supply propped up pepper futures by 1.2 per cent to Rs 15,780 per quintal.

Rape and mustard seed and maize prices increased 0.62 per cent each to Rs 587 per 20 kg and Rs 814 per quintal. Fresh buying on firm spot market coupled with strong export demand in the market boosted maize prices while RM seed recovered on speculative buying supported by strong fundamentals.

Barley futures dipped 0.89 per cent to Rs 1,022 per quintal on long liquidation after the recent rally. Chana for March delivery shed 0.82 per cent to Rs 2,799 per quintal on profit taking as spot prices remained weak across major markets. Kapas was down 0.62 per cent at Rs 512 per 20 kg on profit taking and weak global markets.

On MCX, potato futures were close to the upper circuit at 1.99 per cent to Rs 640 per quintal on stockiest buying.

MCX recorded a turnover of Rs 5,547 crore up to 5 pm on Thursday while it was Rs 2,498 crore.

Gold futures ease

Reuters reports: Gold futures opened down on Thursday as foreign markets took a breather from the previous day’s records, but analysts said it could aim for fresh highs owing to the the weak outlook for the US economy.

“Gold may go down a bit and then come up again,” said an analyst at IL&FS Investsmart Commodities Ltd.

Overseas gold was slightly lower than the previous day, but still very much in sight of its record $964.70 an ounce reached the previous day.

A technical analyst Mr Aurobinda Prasad at Karvy Comtrade Ltd said the April gold contract on the Multi Commodity Exchange of India Ltd could aim for Rs 12,350 per 10 gm if it manages to stay above its support of Rs 12,170.

April gold on MCX touched its all-time high of Rs 12,291 on Wednesday.

Open interest for April gold was at 11,319 lots, up from the previous day’s 11,277. Volume on Wednesday was at 53.81 kg.

Speculation Keeps Pepper Futures Hot

Kochi: Pepper futures market continued to increase on excessive speculation on Thursday as the prices in all other origins are also on an upsurge. Budget 2008-09

Investors, processors who had sold to investors and exporters with multi-origin operations bought pepper and as a result 150 tonnes of the commodity were traded. Investors were selling futures and buying spot exchange delivered pepper.

Difference in the prices of two main exchanges indicates that the pressure is on one exchange only, market sources told Business Line.

Indian parity has gone up to $4,200 a tonne (c&f) and at par with that of Indonesia. Vietnam was not offering Asta grade as they did not want to sell heavy pepper, they said.

According to overseas reports the international market is very firm with fresh buying interest at $4,050 a tonne (c&f) New York for March/June shipment.

Prices continued its upward run with Lasta being offered at $4,100 a tonne (f.o.b.) while Brazil B 1 at $3,800 a tonne (f.o.b.). This was being offered at $3,700 a tonne (f.o.b.) on Wednesday.

Vietnam with prices above the Indian and Indonesian levels is now out of the market.

Meanwhile, Brazil Pepper Trade Board said “Pepper exploding again in all origins and Brazil was the cheapest until today (Wednesday)”.

However, it said, the dollar rate continues to slide down and exporters are feeling the market firm. So the trend is to increase the prices.

Domestic demand has slowed down significantly following the sharp rise in the prices.

CONTRACT POSITION

March contract on NCDEX on Thursday increased by Rs 187 a quintal to Rs 15,780. The increase in other contracts was from Rs 91 to Rs 197 a quintal.

On NMCE, March contract shot up by Rs 224 a quintal to Rs 15,390. The rise in other contracts except July was from Rs 89 to Rs 237 a quintal. July contract fell by Rs 240 a quintal. Total turnover on NCDEX increased by 2,282 tonnes to 23,234 tonnes, while that of NMCE went up by 101 tonnes to 2,166 tonnes.

Total open interest on NCDEX increased by 603 tonnes to 24,205 tonnes. March position dropped by 24 per cent while April and May moved up by 63 per cent and 6 per cent respectively.

Spot prices on tight supply and in tandem with the futures market trend shot up by Rs 200 a quintal on Thursday to close at Rs 14,700 (un-garbled) and Rs 15,300 (MG 1).

Spot Rubber Prices Pare Gains

Kottayam: Domestic rubber weakened in tune with the declines in Japanese futures. In spot, sheet rubber slipped to Rs 100.50 and Rs 101 from Rs 101 and Rs 101.25 a kg respectively at Kottayam and Kochi on buyer resistance. Budget 2008-09

The prices may remain rangebound till the end of this financial year that too in tandem with the global indices and a major takeoff could be expected only during the next fiscal, an analyst said. The trend was mixed.

Futures decline

In futures, the March contract for RSS 4 declined to Rs 100.08 (101.18), April to Rs 102.90 (104.02), May to Rs 104.47 (105.69) and June contract to Rs 106.50 (107.68) per kg on NMCE. . The volumes totalled 1,507 (1,047) tonnes trading 481 (341) tonnes in March, 656 (459) tonnes in April 199 (173) tonnes in May and 171 (74) tonnes in June.

Spot prices were (Rs/kg): RSS-4: 100.50 (101); RSS-5: 99 (99); ungraded: 96 (97); ISNR 20: 98.50 (98.50) and latex 60 per cent: 66 (66).

Excise Duty On Sugar Raised By Rs 9 A Quintal

Chennai: The Centre has increased the excise duty on sugar by Rs 9 a quintal. The levy will come into effect from March 1 and has nothing to do with the Budget being presented in Parliament on Friday. Budget 2008-09

“The additional duty will now make the total excise levy on sugar at Rs 95 a quintal and together with the special educational cess of three per cent, the burden will be Rs 97.85 a quintal for the sugar mills,” trade sources said.

Actually, the Centre had initially pegged the excise duty at Rs 71 a quintal. Then, following the setting up of the Sugar Development Fund (SDF), it imposed an additional Rs 14 a quintal, thus making it Rs 85. Last month, the levy was further increased by Re 1 a quintal.

Sugar Development Fund

“This levy is not related to the Budget as it is meant for the Sugar Development Fund being managed by Food and Consumer Affairs Ministry. Though the Central Excise authorities collect the levy, part of the collections go into SDF, which is exclusively meant for the industry’s benefit,” the sources said.

SDF is used for extending loans to mills for co-generation power projects, anhydrous alcohol and defraying expenses on internal transport and freight charges. It is also used for maintaining sugar buffer stocks.

Consumers, however, are expected to be unaffected by this additional duty on sugar. “It is demand and supply that dictate price in the sugar market and, therefore, this levy will not cast any burden on the consumer,” the sources said. “Basically, the duty is intended to help the industry,” they said.

With quite a few obligations being met out of SDF, the latest hike is expected to meet the increasing expenditure from the fund.

Interest subvention

This hike, it is learnt, is particularly to meet part of the interest subvention or Government’s financial aid for the mills the Food Ministry has to bear towards payment of cane arrears. In October last, the Government had approved bank loans to the mills, equivalent to the actual excise duty paid by them during 2006-07 and the estimated amount payable in the current year. The interest on these loans with a tenor of five years with a two-year repayment moratorium was supposed to be borne by the Centre.

However, the Finance Ministry came forward to offer only interest subvention of 12 per cent. Of this, five per cent was to be borne by the Finance Ministry and the rest by the Food Ministry. Money for the Food Ministry for meeting this obligation had naturally to come from SDF.

It is learnt that the amount of money available in the SDF has become a cause for concern and, therefore, the Food Ministry decided to impose the additional levy.

According to the trade sources, the increase in the duty was very much on cards after an agreement was worked out on loans for the mills to pay cane arrears.

(As per the Economy Survey tabled in Parliament on Thursday, cane arrears as percentage of the price have increased to 6.2 per cent and outstanding dues have been estimated at Rs 1,830 crore.)

It is felt that the Centre could have avoided such a steep hike at one go and it could have been made in phases.

Commodities Hottest Play

Mumbai: If stocks are not helping you make money, may be raw materials could. Even when the BSE Sensex dipped by 12.13 per cent, the top traded commodities have surged by 16.28 per cent, as per the average year-to-date returns on February 27, 2008. Run-up to Budget 2008-09

If one considers spot trading of commodities such as gold, silver, crude oil, steel, copper, guar seed, chana, aluminium and groundnut oil at the Multi-Commodity Exchange, most of them have returned between 5-30 per cent on a year-to-date basis.

That commodities such as gold, silver and crude oil have touched their all-time highs prove that the sluggishness in equity markets does not reverberate in the commodities market.

"This is not just an Indian phenomenon. Equity markets have been beaten globally. So, there is a perception change among investors. They are shifting from equity markets to commodity markets - from paper-based assets to actual assets," said Shailendra Kakani, head, Commodity Research Group.

"The run-up has been in base and precious metals, which are investor-friendly metals that compete with currency and stocks. The gloom in the stocks has forced people to turn to gold. The uncertainty in the equity market is likely to help the commodities boom," Kakani said.

He predicts that, during the rest of the year, commodities such as gold and silver are likely to give better returns.

Pranav Mer, an analyst with India Infoline Commodities, said, "Commodities can be traded by normal investors as well. There are smaller size contracts such as gold-mini and silver-mini futures contracts, which have a margin of 5 per cent, which would be between Rs 6,000-10,000."

Delivery is not a compulsion, and at the end of the contract, one can square off positions in case of base metals and others do not require delivery, Mer added.

But for investors willing to jump into the commodity pool, Kakani has a warning, "Please don't play with leveraged fund. The commodities market is witnessing a bull run, but investors should bear in mind that volatility is going to be supreme. If one is not ready with funds, one should avoid trading," he added.

Rubber Prices Steady

KOCHI: Natural rubber prices refused to come down this week with the spot market witnessing hardly any arrivals.

In the physical market, RSS 4 settled flat at Rs 101 and Rs 101.25 a kg respectively at Kottayam and Kochi.

The rates sustained even amidst buyer resistance as the arrivals were too low and nobody seemed interested to sell the stocks since the off-season target has been projected at Rs 125 a kg for sheet rubber.

In domestic Futures, rubber was almost steady on NMCE. The March Futures was traded at Rs 101.20 (101.23), April at Rs 104 (104.02), May at Rs 106 (105.66) and June at Rs 107.75 (107.77) per kg for RSS 4.

The volumes improved to 1,047 (941) tonnes trading 341 (232) tonnes in March, 459 (509) tonnes in April 173 (129) tonnes in May and 74 (71) tonnes in June.

Spot prices were (Rs/kg): RSS-4: 101 (101); RSS-5: 99 (99); ungraded: 97 (97); ISNR 20: 98.50 (98.50) and latex 60 per cent: 66 (66).

Rains To Help Boost Coffee Output

MUMBAI: The February rains will make the coffee farmers happy with an expected jump in production.

The coffee growing areas in sought India, especially Karnataka and Tamil Nadu, received good rains during the first week of February which will boost the flowering of coffee plants.

According to the Coffee Board officials, the country’s coffee crop will gain from the rains.

The rains are certainly going to be beneficial for the next Arabica crop to be harvested in October.

The rains led to dropping of beans in some plantations of Robusta, a variety used in instant coffee.

A bigger crop in India, which exports 80 per cent of its output, may help slow this year’s 35 per cent gain in Robusta coffee prices.

The Futures touched $2,625 a tonne this week on London’s Liffe exchange, the highest in almost 11 years.

India’s coffee production may reach 262,000 tonnes in the year to September 2008, 10 per cent lower than the 291,000 tonnes forecast in July by the government, the Coffee Board said in December. The crop totaled 288,000 tonnes in a year earlier.

Exports may total 210,000 tonnes in the year ending March 31, 16 per cent lower from a year earlier. India exported 182,431 tonnes in the April 1-February 21 period.

FCI To Procure More Wheat This Fiscal

NEW DELHI: The Food Corporation of India on Wednesday announced that it would procure nearly 135 lakh tonne wheat this fiscal.

Speaking to reporters here FCI Chairman and Managing Director Alok Sinha said FCI expects to lift at least 135 tonne of wheat in 2008-09, up by 23 lakh tonne over the current fiscal.

He said, “The major factors behind increase in lifting would be higher MSP, good crop in Punjab, Haryana, Northern Rajasthan and Western Uttar Pradesh, and low interest of private buyers in buying the crop.”

From Punjab and Haryana alone, FCI expects to lift 85 lakh tonne and 40 lakh tonne of wheat respectively, he informed.

FCI procured 92 lakh tonne of wheat in 2006-07, followed by 112 lakh tonne lifted in 2007-08. With the procurement of 135 lakh tonne of the crop, the wheat stock of the country would reach 188 lakh tonne.

The agency predicts that the private buyers would not be aggressive this year for wheat buying due to stabilized domestic wheat prices.

Fertilizer Glut Likely By 2012

NEW DELHI: Farmers across the world will not face any shortage of fertilizers in four years’ time.

If a UN Food and Agriculture Organisation report is anything to go by, global fertilizer supply is expected to outstrip demand by 2011-12 and will support higher levels of food and bio-fuel production.

The supply of fertilizer — nitrogen, phosphate and potash nutrient — in the global market will be surplus at 241 million tonnes in 2011-12 compared with the demand of 216 million tonnes, according to the report ‘Current World Fertiliser Trends and Outlook to 2011-12’.

FAO fertilizer expert Jan Poulisse said high commodity prices experienced over recent years led to increased production and correspondingly to greater fertilizer use, leading to tight markets and higher fertiliser prices.

Spices Make Things Better

Spices are precious for foods as well as for medicines. There are accounts that since ancient times spices had been used for making medicines. Here are some astonishing facts about spices.

• India is the land of oriental spices used in over 130 countries

• Two major spices originated in the Western Ghats-Black pepper and cardamom

• Research is now on to validate the medicinal, therapeutic and nutraceutical properties of spices in India

• 79 spices out of 109 spices listed in ISO list are grown in this country and production is about 4.04 mn tones

• Indian spices are known for its taste, flavour, colour and fragrance

• India has set a target of US $ 10 bn exports by 2017

• Indian pepper is stilled detained at US ports for testing of salmonella and e-coli

• Only a few Indian companies have steam and ETO sterilization facilities

• Bible's Old Testament contains references to cinnamon, cardamom, spices indigenous to Kerala

• Cinnamon is referred to in Bible as the one of the holy anointing oils and perfumes used in the ritual of the Tabernacle erected by Mostes, the great Jewish law giver, in the wilderness of Sinai

• Muziris (Kodungallur) in Ernakulam district (Kerala) was the ancient gateway of India.

• Pepper is called Black Gold

• Gujaratis acted as middlemen between Vasco-Da-Gama and local spice traders when he landed in Calicut in 1498

• Ancient Egyptians used spices from Kerala to make perfumes, holy oils.

• Spices were used to preserve dead bodies of their kings and important people

• The Holy Testament also refers to the enticing role played by perfumes made of spices in the field of lovemaking.

• Greek word Zingiber is derived from Malayalam word 'inchi' meaning Ginger

• Hippalus discovered the existing monsoon winds blowing across Indian ocean thereby helping discover the trade route to India

• Pliny estimated that the Roman Empire paid out annually a hundred million Sesterces (about pounds 1,087,500) to India, China and Arabia for the purchase of luxuries.

• In the magnificent city of Hangchow, Marco Polo the celebrated traveler of 13th Century was informed by the Chinese emperor that the daily amout of pepper brought was 43 loads, each load having 243 pounds or a total of 10,449 pounds

Spot Rubber Rules Steady

Kottayam: In the physical front, sheet rubber continued to rule steady at Rs 101 and Rs 101.25 a kg respectively at Kottayam and Kochi on Tuesday. The volumes were dull in a rather inactive market following heavy declines in global futures. The March futures for RSS 3 fell sharply to ¥300 (Rs 110.90) from ¥307.2 a kg at TOCOM mostly on profit booking at higher levels. The grade firmed up by 27 paise to Rs 114.16 a kg at Bangkok. Run-up to Budget 2008-09

Futures weak

The rubber futures weakened on NMCE quoting the March futures at Rs 101.20 (102.09), April at Rs 104 (104.90), May at Rs 105.61 (106.85) and June at Rs 107.76 (108.62) per kg for RSS 4. The open interest stood at 7,003 (7,039) tonnes. The volumes were 941 (1,081) tonnes with 232 (384) tonnes in March, 509 (536) tonnes in April 129 (78) tonnes in May and 71 (83) tonnes in June. The outstanding positions were 4,127 (4,131) tonnes in March, 1,873 (1,912) tonnes in April, 712 (711) tonnes in May and 291 (285) tonnes in June.

Spot prices were (Rs/kg): RSS-4: 101 (101); RSS-5: 99 (99); ungraded: 97 (97); ISNR 20: 98.50 (98.50) and latex 60 per cent: 66 (66).

India Holds Key To Global Sugar Prices

Chennai: India holds the key to global sugar prices, says a report on World Sugar Outlook 2008 by Rabo India Finance Ltd. Run-up to Budget 2008-09

“India currently owns much of the global stocks accumulated since 2005-06 (October-September). If there is not a prompt increase in export offers from India in the face of rallying prices in the first half of 2008, expectations of global export availability for 2008 will be revised downwards, providing fundamental support for any rally,” the report said.

A pruning of India’s projected crop this season to September helped fuel the prices rally last month, though the report said it was not clear how much impact the revision would have on the market.

“As a result, a modest decline in the projected surplus and stocks build-up in 2008 is not, on its own, likely to have much effect on the availability of Indian sugar for export over the next year,” the report said. However, the recent increase in domestic market sales price had made millers cautious on entering new export deals.

Global prices

In January, mills in Maharashtra were able to sell sugar at Rs 12,500-13,000 a tonne in the domestic market against Rs 11,300-11,800 in November.

The latest increase in global prices was also prompting millers to be delay negotiating export contracts and not lock themselves into the existing rates to cover against any upside risk. “Some millers are even trying to wriggle out from delivering against past contracts, though this may invite legal action,” the report said.

Referring to the controversy over higher State advice price fixed by the Uttar Pradesh Government, it said a ruling by the Supreme Court either way could dent the relations between the growers and millers.

Stating that the speed and degree with which India makes more sugar available in the export market would influence the global price rally, the report said a limited response could certainly help to support prices until at least 2008.

Dwelling on supply, demand, stocks and export availability, Rabo said there was little justification for global sugar prices to be substantially higher this year than they were last year. Raw sugar prices may average 12.9 cents a pound in 2009, it said.

With almost all investment funds going long on sugar, their resolve would be tested by market developments, first by expiry of March 2008 raw sugar futures contract and later when Brazil new crop campaign gathers steam. That could lead to volatility in the market, it said.

Vietnam Factor Drives Up Pepper

Kochi: Pepper futures market witnessed high volatility and speculators were pushing up the prices on reports of continuous rise in Vietnam pepper prices. Run-up to Budget 2008-09

Investors were active in selling futures and buying spot pepper exchange delivered. Domestic demand was weak.

Arrivals continued to be almost half of what used to come during these days normally in previous. Besides, the pattern of arrival has also changed now with the goods coming directly to exporters or processors or direct suppliers, market sources told Business Line. On an average 100 tonnes of pepper arrive daily now as against 200 to 250 tonnes in the previous seasons.

Under the Vietnam influence Indonesia and Brazil are also said to have raised their pepper prices. Indonesian LAsta was being offered at $4,050 a tonne (f.o.b.) while Brazil B Asta at $3,650-3,750 a tonne (f.o.b.) and B1 at $3,700 a tonne (f.o.b.). Indian parity on Tuesday was at $4,150 a tonne (c&f).

Meanwhile, according to overseas reports, market in Vietnam was reportedly dull due to hot local prices, recent hike in interest rates and weak dollar. Pepper prices there continued to rise on tight supply. Prices quoted on Tuesday are FAQ 500 GL $3,850 a tonne (f.o.b.), FAQ 550 GL $4,050 a tonne (f.o.b.) and V Asta $4,410 a tonne (fob).

As the prices are ruling high at 60,000 VND a Kg farmers are said to be selling only one kg/day to meet their daily requirements.

CONTRACT POSITION

March contract on NCDEX on Tuesday moved up by Rs 114 a quintal to Rs 15,400. The increase in all other contracts except August was from Rs 158 to Rs 191 a quintal. August declined by Rs 6 a quintal to close at Rs 16,780.

On NMCE, March contract went up by Rs 35 a quintal to Rs 15,025 from Rs 14,990. The increase in other contracts except June was from Rs 5 to Rs 107 a quintal. June declined by Rs 31 a quintal to close at Rs 16,010.

Total turnover on NCDEX dropped by 466 tonnes to 19,919 tonnes, while that on NMCE also fell by 325 tonnes to 1,934 tonnes.

Total open interest on NCDEX increased by 1,074 tonnes to 22,094 tonnes. March position fell by 34 per cent, while that of April and May went up by 55 per cent and 7 per cent respectively.

On NMCE, total open interest declined by 50 tonnes to 1,631 tonnes.

Spot prices in tandem with the futures market trend and buying support went up by Rs 200 a quintal on Tuesday to close at Rs 14,300 (un-garbled) and Rs 14,900 (MG 1).

Palm Oil May Top 4,000 Ringgits Soon

Kuala Lumpur: Crude palm oil prices that have been hovering around 3,500-3,700 Malaysian ringgit (MYR) a tonne could touch 4,000 MYR a tonne quicker than many think, a representative of Frost and Sullivan told the delegates at the “Palm and Lauric Oils Price Outlook” conference here on Tuesday. Over 1,700 delegates from over 40 countries are participating. Run-up to Budget 2008-09

Biofuels prop up the prices of agricultural goods through increased demand, setting a floor for other crops, he pointed out, adding that the market will continue to look for ways to grow, especially bioethanol crops. Energy security and politics will be a key reason behind this, the expert asserted.

Importantly, over the next five, 10 or 20 years, whether oil will keep up with the demand growth in the context of factors like growing population, energy needs, crops competing for land and water stress should cause considerable concern, he reasoned.

Suggesting that palm bio-diesel was a cost-effective environment-friendly fuel, U.R. Unnithan of Carotino Sdn Bhd pointed out that in a free market world, palm bio-diesel was still the most cost effective diesel substitute as shown by Malaysian data. In terms of energy efficiency, greenhouse gas emissions and sustainability, the product stood out as an excellent eco-friendly fuel, he said.

Given palm’s best yield improvement potential, it can alleviate the food versus fuel problem, according to Unnithan.

Pepper Futures Up On Tight Supply

Kochi: Pepper futures market shot up on Monday on reports of Vietnam offering its pepper at higher prices due to lack of selling pressure. Run-up to Budget 2008-09

The market witnessed high volatility and the speculative activities pushed up the prices to touch almost the circuit level in morning session of trading and then came down to close at Rs 230 a quintal above last Saturday’s levels.

Investors became active and were buying spot and selling futures. Domestic demand also slowed down as the prices showed an upward swing.

Tight supply position is felt in the international market and buyers have started making enquiries with Indian exporters about the trend here. They still hope that once the arrivals at the market here increased the prices may decline.

Indian parity has crossed $4,000 a tonne (c&f). Brazil reported to have sold almost everything while the situation in Indonesia is also same and hence it is not in the market.

Overseas reports on Monday on Vietnamese market said that farmers in Vietnam were holding back their produce aimed at pushing the prices up. As a result, the Asta grade pepper is offered at $4,300 a tonne (f.o.b.). FAQ 500GL and FAQ 550 GL is offered at $3,750 and $3,950 a tonne (f.o.b.) respectively.

CONTRACT POSITION

March contract on NCDEX increased by Rs 238 a quintal to close at Rs 15,340 from Rs 15,102. The rise in other contracts was from Rs 237 to Rs 304 a quintal.

On NMCE March contract went up by Rs 154 a quintal to close at Rs 15,030 from Rs 14,876. The increase in other contracts was from Rs 265 to Rs 301 a quintal.

Total turnover on NCDEX moved up by 7,423 tonne to 20,385 tonne while that on NMCE went up by 1,173 tonne to 2,259 tonne. On NMCE total open interest moved up by 44 tonne to 1,681 tonne.

Spot prices in tandem with the futures market trend shot up by Rs 200 a quintal on Monday to close at Rs 14,100 (un-garbled) and Rs 14,700 (MG 1).

Spot Rubber Rules Steady

Kottayam: Physical rubber was steady on Monday. RSS 4 continued to be traded at Rs 101 a kg at Kottayam but the grade was slightly better by 25 paise at Rs 101.25 a kg at Kochi. According to sources, the market activities were in a low pace as the global news were not strong enough to set a visible price movement either side. RSS 3 firmed up by 13 paise to Rs 113.89 a kg at Bangkok. The March futures for RSS 3 improved to ¥307.2 (Rs 113.75) from ¥303.6 while its February contract weakened to ¥301 from ¥303.9 a kg at TOCOM. Run-up to Budget 2008-09

Futures better

The rubber futures finished better on NMCE. The March futures improved to Rs 101.99 (Rs 101.42), April to Rs 104.75 (Rs 104.19), May to Rs 106.55 (Rs 105.97) and June to Rs 108.50 (Rs 108) per kg for RSS 4.The outstanding positions were 4,131 (4,230) tonnes in March, 1,912 (1,854) tonnes in April, 711 (711) tonnes in May and 285 (246) tonnes in June. The volumes were 1,081 (385) tonnes with 384 (169) tonnes in March, 536 (105) tonnes in April 78 (28) tonnes in May and 83 (83) tonnes in June. The open interest was 7,039 (7,041) tonnes.

Spot prices were (Rs/kg): RSS-4: 101 (101); RSS-5: 99 (99); Ungraded: 97 (97); ISNR 20: 98.50 (98.50) and Latex 60 per cent: 66 (66).

Industry, Trade Upbeat On Palm Oil Price Outlook

Kuala Lumpur: A day ahead of the much-awaited annual Palm Oil Price Outlook organised by Bursa Malaysia, the mood within the vegetable oil industry and trade, especially among producers and exporters, is absolutely upbeat. And why not? Run-up to Budget 2008-09

The market has gone through an unprecedented period of bullrun that has taken prices to four digits in dollar terms, a stark contrast with the long bear run of 2001-2002.

Driving factors

Currently both crude palm oil and soyabean oil are trading well above the psychological $1,000 a tonne, nearly five times higher than prices 5-6 years ago; and twice the rates traded in 2006.

What changed in the recent years?

An unusual combination of factors - robust surge in demand, supply uncertainties and fund play - are currently seen driving the commodities market in general, and vegetable oil market, in particular, up.

Asset class

Importantly, commodities are now an asset class in the league of stocks, bonds, foreign exchange and real estate. Last one year, some commodities such as gold have outperformed other traditional asset classes.

Obviously, there is a larger flow of funds for trading commodities; and when the market fundamentals face uncertainties or imbalances - such as the one vegetable oil market is currently facing - can funds lag behind?

Trading volumes

Trading volumes in the futures counters have grown rapidly. Whether Bursa Malaysia for crude palm oil or Chicago Board of Trade for soyabean oil, trade transactions are exploding.

The interest in vegetable oils is heightened by other factors such as the crude market, ocean freight rates and exchange rate.

Will crude palm oil reach ringgit 4,000 a tonne or is there a possibility of correction down to around ringgit 3,000? Bursa Malaysia has lined up several expert speakers from around the world to present their perceptive analysis of the current global vegetable oil market dynamics and expectations of the shape of things to come.

Analysis meet

The keynote speech will be delivered by the Guest-of-honour, Dr Peter Chin Fah Kui, Malaysia’s Minister for Plantation Industries and Commodities.

Dr James Fry of LMC International will speak on the lessons we can learn from the past bull markets and Thomas Mielke, Hamburg-based editor of Oil World, will share his thoughts on the reactions of the world vegetable oil market to challenges from the energy market.

Dorab Mistry, Director of the London-based Godrej International, will present a paper on palm oil price outlook with special reference to India. There will also be experts speakers on palm oil producers’ perspectives and soya oil complex outlook.

A special session on biodiesel too has been organised. About 1,700 participants are expected to turn up for the event.

Chana Futures Hit Upper Circuit

Mumbai: Amidst all the bullishness surrounding the agriculture complex, Chana prices hit the upper circuit on NCDEX on Monday. Run-up to Budget 2008-09

Chana April contract hit the upper circuit of 4 per cent in the first hour of trading itself whereby trading in the contract remained suspended for almost the entire day. The contract closed up at Rs 2,255 per 100 kg, the upper circuit level.

Bullish fundamentals of the commodity stem from the expectation of lower crop by 10 to 15 per cent, said Amul Tilak, research analyst at Kotak Commodities Pvt Ltd.

Also the market is expecting a delay in the arrivals with the result of lower warehouse stocks, he added. This has resulted in higher spot prices that is supporting the futures, he added.

Spot price in Delhi was quoted at Rs 2,833 per 100 kg up by Rs 179 and up 26 per cent this month.

The Government earlier this month said chana output in 2007-08 may drop by 7.9 per cent to 5.83 million tonnes from 6.33 million tonnes last year.

Homedale Fetches Top Price At Coonoor Tea Sale

Coonoor: Homedale Estate, which had consistently remained in the high-bid bracket, created a record in Sale 8 of the auctions of the Coonoor Tea Trade Association (CTTA) here on Friday when its RD grade, auctioned by Global Tea Brokers, fetched Rs 100 a kg. Paras Tea Co bought it. This was the highest price fetched by any CTC tea at this auction. It was also the highest price the factory got so far in the auctions. Homedale’s top price in 2007 was also Rs 100, got in December. Darmona Estate, another consistent topper, got Rs 99 this week. Green View Estate got Rs 83, Deepika Supreme and Kannavarai Rs 82 and Hittakkal Rs 81. Run-up to Budget 2008-09

Among the orthodox teas from corporate sector, Curzon got Rs 128, followed by Kairbetta at Rs 124, Prammas Rs 123, Glendale and Kil Kotagiri Rs 122, Chamraj Rs 119, Mailoor Rs 117, Quinshola and Kodanaad Rs 115, Corsley Rs 111, Tiger Hill Rs 110, Erinkadu, Havukal and Craigmore Rs 105, Nonsuch Rs 103, and Sutton and Katary at Rs 102.

On the export front, Egypt bought CTC dusts paying Rs 49-51 a kg. CIS supported medium and plainer bolder grades in the range of Rs 44-47. Russia also bought some orthodox leaf grades. Pakistan selected blacker teas for Rs 49-51.

“With the exporters supporting plainer grades, their prices rose by Rs 2 a kg over last week. Medium CTC leaf teas were barely steady. High priced CTC dusts lost Rs 2. Primary orthodox dusts eased Rs 5. Blacker whole leaf grades were dearer by Rs 1-2,” an auctioneer told Business Line.

Corporate buyers

Among the corporate buyers, Hindustan Unilever lent useful support for better medium grades. JV Gokal and Bhansali were active on orthodox leaf sale. Western Indian buyers were fairly active. Karnataka traders bought unmindful of the lorry strike.

Quotations held by the brokers indicated bids ranging from Rs 43-46 a kg for the plain leaf grades and Rs 60-78 for the brighter liquoring sorts. They ranged Rs 47-50 for the plain dust grades and Rs 62-78 for the brighter liquoring varieties.

Maize Futures Close Higher

Coimbatore: Maize futures has closed higher in the Rs 8,140-8,490 per tonne range for the March/April deliveries as compared to current market yard prices (loose) which are quoted at Rs 7,200-7,300 per tonne, according to market reports. Run-up to Budget 2008-09

The May and June 2008 deliveries are quoted even higher at Rs 8,800-8,990 per tonne respectively.

According to the US Grains Council India market report for the just ended week, with the demand for Indian maize in export market remaining firm, the prices have started to show a firm trend after a little lull. Another reason for higher futures prices is the anticipated lower rabi crop which is expected to be around 2.54 million tonnes as against last year’s crop of 3.54 mt.

The report also stated that maize price in spot market too rose this week with Ratlam and Nimbaheda market quoting at Rs 8,300 and Rs 8,375 per tonne respectively, while the prices in Karimnagar and Davangere markets were prevailing at Rs 7,217 and Rs 6,877 per tonne.

The US maize prices kept moving up along with higher freight giving support to export of maize from India to South-East Asian markets. For example, the US Gulf maize prices on f.o.b. were indicated at $228-229 per tonne and the freight cost to Japan was at $107 per tonne, making the aggregate delivery cost at $325-326 per tonne. Whereas Indian corn at a quote of $235 per tonne (f.o.b. and freight quoted at $38-40 per tonne for the South Asian destinations, the delivery cost would work out at $275-280 per tonne. With the cost differential of $40 per tonne between Indian and the US corn, another round of buying by exporters could not be ruled out, the report added.

Tech Centre Mooted To Boost Cashew Cultivation

Kochi: The Cashew Export Promotion Council of India (CEPC)-Laboratory in Kerala’s Kollam city has mooted a Rs 90-lakh project for the development of a Centre for Technology Transfer for Cashew to enable cultivation, production and processing with financial assistance from Nabard. Run-up to Budget 2008-09

Dr V.P. Potty, Head of the Laboratory, told Business Line that setting up of such a development centre has become inevitable for boosting raw nut production and processing, given the slow pace of growth at present in this sector.

Low productivity, long gestation period to get the maximum yield, and large areas of senile plantations are some of the major problems which needed to be surmounted, he said.

The current productivity of cashew per hectare in India is around 800 kg, while it is 2,670 kg/ha in Vietnam.

In India, Maharashtra has the highest productivity at 1,300 kg/ha despite having a potential of 5,000-6,000 kg/ha.

“There are hybrids and selections of cashew in the cashew research stations in Maharashtra and Goa with a potential to yield about 40 kg per plant, i.e., 8,000 kg/ha at the 14th year of planting. It is, of course, a late variety which can be improved,” he said.

Density planting

At present, there are no compact, dwarf and early bearing varieties available in the country and as a result, density planting cannot be undertaken. It is not known to the farmers.

This is an important area where the CEPC Lab wanted to concentrate, he said.

The major components of the project include development of standards for raw nuts and popularising the same; training farmers in harvest and post-harvest operations; training workers on hygiene/sanitation in processing units; and developing and popularising high-yielding cashew crops.

A total of 37 cashew varieties have been developed and released.

Among them, 25 are selections and 12 are hybrids. 21 varieties are exportable grade kernel producing (W180-W240).

Other components

Other project components are development of agricultural and horticultural techniques like soft wood grafting, soil and water conservation technique in high density planting, vermin-composting of the cashew biomass, pruning, top-working for rejuvenation of senile orchards, plant protection techniques for controlling tea mosquito, stem and root borer attacks, irrigation and drip irrigation techniques, fertigation, application of plant growth regulators and intercropping in cashew orchard.

Besides, introduction of the concept of Good Agricultural Practices (GAP) among the farmers and developing a scheme for certification under GAP quality system, and thus institutionalising the farming activity to a market oriented operation, are also included in the project.

The project could be implemented in three years at a total cost of Rs 90,43,000 and financial assistance from Nabard has been sought, Dr Potty added.

Coir Exports Drop On Rupee Appreciation

Despite of government`s relief package the coir exports are unable to recover due to appreciation of the rupee against the dollar, reports Economic Times.

According to Coir Board statistic, the coir exports have increased in terms of quantity but the value has slumped. Coir exports touched 149,232 tons valued at Rs 4.8686 billion for the 10-month period ended January 2008. For the same period in the previous year, exports came to 131,109 ton, valued at Rs 4.9017 billion.

While the quantity has grown 13.82%, value has fallen marginally by 0.68%. Coir mats, the principal item in the coir export basket, has shown 2% rise in quantity while the value has dropped 2%. Coir mats export stood at 62,125 ton, valued at Rs 3.6813 billion.

Coir pith, geotextiles and fiber have shown improvement in both quantity and value. According to Coir Board sources, there has been increased demand from Europe and other countries for coir geotextiles and pith.

Gold Jewellery No More Indian Bride's Best Friend

Ahmedabad: When textile designer Anshu Murarka married earlier this month, her wedding trousseau had a laptop, a plasma television and mutual fund units besides seven gold coins, dainty gold chains, pendants and bracelets. Run-up to Budget 2008-09

Twenty seven years ago, says Anshu's mother Ramila, she had 500 grams of gold in the form of necklaces, ear rings, bangles and hair braids in her wedding dowry.

The unchallenged place of gold jewellery in Hindu weddings made India the world's largest consumer of the metal.

But soaring prices resulted in upstart gadgets replacing gold jewellery in the wedding dowry.

"If my daughter had to wear all gold (jewellery) at her wedding, I would have had to spend an additional Rs 2, 00,000 which was out of the question for now," Ramila Murarka said.

"About 20-30 years ago, a middle-class wedding trousseau had an average of 100 gram of gold. Now it has fallen to 70-80 gram," said Ajay Mitra, managing director-India of the industry-funded World Gold Council (WGC).

"Televisions, cars and cell phones have crept into a woman's marriage."

Gold prices have risen by 25 per cent on year curbing demand at a time when weddings are scheduled, and traditionally a boomtime for the trade.

On Monday, a bank quoted prices at Rs 12,421 per 10 gram, up from Rs 12,377 on Friday. The April gold contract on the Multi Commodity Exchange of India touched its highest level on Monday at Rs 12,186.

In January, when the season started, imports of gold totaled just 24 tonnes, down 72 per cent on the year, according to the figures of the WGC.

Fashions change, designs remain

While jewellery is losing appeal, it is not as if gold itself has lost any shine.

Rising incomes have ensured that the base of gold buyers is getting bigger, an analyst said. WGC figures show India's gold imports rose 7 per cent in 2007 to 773.6 tonnes.

Nineteen-year old bride, Vindhya Tiwari, also in Ahmedabad, said she did not want her parents to feel the financial burden of buying gold for her.

"So it is simple for me -- mix gold jewellery with fake (gold) jewellery," Tiwari said referring to her attire on her wedding day last week when she wore her mother's gold jewellery with newly acquired non-gold ones.

It's just that patterns of spending and new priorities have to be made room for.

Ritu Datta, an air-hostess also based in Ahmedabad, said she chose to buy a car with the money meant for her trousseau.

"I find it senseless to buy expensive gold ornaments and keep it in safe vaults when I can buy a car and use it everyday," Datta said.

These signs of more purchasing power help to sell more gold.

"With the reach of television increasing and the heavy promotions, gold has created a position in the minds of people," said Nayan Pansare, a gold market expert working for jewellery exporting companies.

"Many luxuries have become a necessity so brides may be buying less gold, but overall gold consumption may continue to increase due to Indians' fascination for the metal and more people being able to afford it now."

Tight Supplies Keep Pepper Market Hot

Kochi: Tight supply position coupled with the upward trend in Vietnam and other origins have pushed up the pepper futures market last week. Run-up to Budget 2008-09

On NCDEX, all the contracts increased by Rs 965 to Rs 1,141 a quintal while on NMCE, it was from Rs 732 to Rs 1,000 a quintal.

Spot prices shot up by Rs 600 a quintal to close at Rs 13,900 (un-garbled) and Rs 14,500 (MG 1).

However, the turnover on NCDEX dropped by 13,235 tonnes to 69,133 tonnes while that on NMCE, it declined by 1,150 tonnes to 7,150 tonnes.

Total open interest on NCDEX moved up by 1,532 tonnes to 21,491 tonnes. During the week, 1,034 tonnes of February contract were delivered. Open interest for March witnessed a drop of 1,895 tonnes.

Overall supply position continued to remain tight. Availability of Asta grade pepper was thin in other origins. Heavy pepper arrivals in Vietnam even after 30 per cent of harvesting were negligible. Hence, Asta prices there were ruling above $4,000 a tonne (f.o.b.). Indian parity was around $3,900 a tonne (c&f) remained competitive. India is currently at an advantageous position.

In the International market, the buyers have been waiting for a selling pressure to build up in Vietnam. The low output in India and its huge domestic market capable of absorbing the entire quantity might place Vietnam at an advantageous position in the second quarter of the year. Meanwhile, unconfirmed overseas reports said that the Indonesian 2008 crop would be around 20 per cent smaller.

IPC REPORT

According to the International Pepper Community (IPC) report, black pepper market firmed up during the week. In Vietnam, the market showed some improvement. Pepper prices at HCMC increased steadily through out the week and moved up significantly during the last two days.

Price for local purchases was VND 52,000 a kg at the beginning of the week increased to VND55,500 a kg at the week’s close. F.O.B. prices were $3,450 a tonne for black 500 GL and $3,650 for 550 GL. On an average, pepper prices at HCMC increased by four per cent from the previous week. In India, prices firmed up slightly, but trading was slower as indicated by the decrease in volume of trade at the commodity exchange. In Sarawak, local prices increased by two per cent, but f.o.b. prices were stable at $3,850. In Europe, Sarawak black pepper price increased by three per cent.

WHITE PEPPER

The market continued to be quiet. In Bangka and Sarawak, local prices were relatively stable. But in dollar terms, prices increased marginally by one per cent due to weakening dollar rate against local currencies. In Europe, Muntok white pepper price increased by five per cent.

In Brazil, according to Brazilian Pepper Trade Board (BPTB), exporters stopped offering and were talking prices up to $3,700 f.o.b. for ASTA and $3,550 for B2 500 GL.

Gold Prices May Be On The Slide

The commodity bourses hogged the limelight last week with commodities setting records after records. Platinum traded at an all-time high and went above $2200, Palladium above $500 and Rhodium within a spitting distance of $9000. The agri commodities were not far behind either: wheat, soya and maize made exciting trading patterns. Of course, gold and silver, too, scaled fresh peaks. Gold went up all the way to $954 during the week while silver reached a fresh 27-year high by going beyond $18 threshold. Run-up to Budget 2008-09

Tuesday saw the beginning of the rally, and on that day itself the price went beyond $920 an ounce. Wednesday saw the price beginning from a vantage point at $928 in cash market, and thus did not have much difficulty to go beyond $940 mark. Thursday took the prices way beyond $950 level, all the way to $954.70, yet another record. The market cooled down a bit on Friday yet the price closed at a very healthy $944.60 an ounce, registering the best weekly gain in decades.

With the sustained weakness in US dollar, the push to the precision metals was automatic. The dollar fell to a three-week low against the euro on concerns that the Federal Reserve will cut borrowing costs to avert a recession. (The dollar has lost 11 per cent against the euro in the past year.)

The real push to gold, however, came from the astonishing rise in the crude price. Crude oil advanced to an all time high price of $101.32 a barrel in New York. The main driver to the oil prices came from the speculation that the OPEC, due to meet on March 5, is expected to cut output as winter heating demand wanes.

The across the board rise in commodities price during this week is clear indication that the investors are piling in their investible funds in the commodities sector, after having taken a heavy beating in stocks around the world. The most important news during the week in precious metals market was that China surpassed the US to become the world’s second-largest market for gold jewellery.

Coming to trading during the new week, the economic indicators due this week are existing home sales on Monday, producer price index and consumer confidence on Tuesday, new home sales on Wednesday, GDP numbers and jobless claims on Thursday. The prices are likely to stay volatile during the week, and there is a very strong case for decline in the gold prices this week.

According to statistics released by the World Gold Council (WGC) the sales of gold jewellery reached a record high of 302.2 tonnes, up by 34 per cent and second only to India.

The remarkable thing is that the consumption in China went up exactly in a year when it fell in the US, supposedly a price-inelastic buyer. In 2007, the demand for gold in the US saw a 14 per cent year-on-year drop. Even the gold market in Italy and Britain slumped, but the Red country sales were up. Another remarkable fact is that the Chinese buying has increased at a time when the gold prices are reaching the skies and smashing one record after another. China saw a 20 per cent year-on-year growth in gold jewellery sales in the last quarter of 2007 — the very period when the price of gold was going up remarkably.

The economic indicators due this week are existing home sales on Monday, producer price index and consumer confidence on Tuesday, new home sales on Wednesday, GDP numbers and jobless claims on Thursday.

The prices are likely to stay volatile during the week, and there is a very strong case for decline in the gold prices this week.

The market is top heavy and thus needs to be attempted with greatest caution.

Kolkata Tea Sale: Good Demand For CTC Leaf, Dust

Kolkata: Last week, the CTC leaf and dust teas met with good demand at the auction centres in Guwahati, Siliguri and Kolkata. The offerings comprised old season varieties which were readily absorbed and the few earlier teas on offer sold at attractive rates. The major blender was selective while the other major packeteer was quiet. Internal sections operated strongly. Run-up to Budget 2008-09

Selected well-made orthodox whole leaf sold well following inquiries from North India and local buyers. Stalk free clean varieties were firm to dearer while the remainder were lower following quality. There were some export inquiries.

The small weight of Darjeeling whole leaf on offer sold at firm to dearer rates while brokens and fannings were irregularly lower. Local dealers absorbed the bulk of the offerings.

CROP

The Kolkata sale 9, due on February 25, has been dropped in view of the paucity of arrivals.

INTERNATIONAL

In the Colombo auction, selected better sorts and plainer categories sold well at firm to dearer rates while the remainder tended irregularly lower. Traditional exporters were active.

The Mombasa market saw less demand at easier rates with some withdrawals. Few better smaller grades, however, saw good enquiry. West Asia and Russia lent strong support while Kazakhstan was fairly active with some interests from Sudan. The packers from Pakistan, the UK and Egypt were less active.

Maize Futures Expected To Trade Higher

Mumbai: Despite estimates of higher rabi production, maize futures on NCDEX are expected to trade on the higher side in the near-to-medium term on strong demand from Australia, Sri Lanka, the Philippines and Nepal. Run-up to Budget 2008-09

Till February, India exported 5-lakh tonnes compared with 4.5-lakh tonnes shipped during the same period of the previous year. Global corn production estimates are around 766.23 million tonnes (mt) compared with 704.1 mt last year.

Export demand

According to USDA Report released recently, India’s production in 2007-08 is projected at 16.3 mt against 14.98 mt last year, up 8.81 per cent. Rabi crop from Northern States and a small quantity from Andhra Pradesh are expected to arrive next fortnight. “The quality of rabi crop is not suited for export. The entire export demand has to be met by the kharif produce,” said Harish Galipalli, Karvy Commodities.

Further, lack of carry forward stocks may support prices on the higher side. The country is expected to produce 16.3 mt. Domestic consumption is pegged at 15.4 mt and exports at 5-lakh tonnes.

Future Trend

Maize futures on NCDEX rallied by Rs 140 per quintal in January despite higher output this year. Most active April contracts moved up from a low of Rs 790 per quintal in January to Rs 928. Strong export enquiries and declining kharif arrivals supported the prices. However, the bull run halted and fell to a low of Rs 805 by mid-February after outbreak of bird flu in West Bengal.

“Outbreak of bird flu in West Bengal and Bangladesh suppressed the prices. Wholesale prices of broilers and eggs plunged by 20-25 per cent across the country resulting in a slowdown in demand for poultry feed sector,” Galipalli said.

However, the bearish trend is set to reverse in the coming days. The April contract is retracing back after witnessing a decline to Rs 791 levels. Prices have risen from Rs 808 per quintal to Rs 843 in the last one week. “We recommend going long at Rs 830-835 levels for possible target of Rs 870 and then Rs 885-900 with stop loss below 800 levels,” he said.

Edible Oil Prices Shoot Up By 20-50%

Hyderabad: After gold, it is the turn of edible oils to get affected by international factors. Consumers, who have witnessed huge increase in the prices of the yellow metal in the last few weeks, are in for yet another shock. Run-up to Budget 2008-09

Prices of edible oil have shot up 20-50 per cent due to a sharp rise in the price of raw oil globally.

While the price of sunflower oil (packed) has gone up to Rs 100 from Rs 78, soya oil reached Rs 70 (Rs 55) and rice bran oil Rs 66 (Rs 44).

Bio-diesel factor

“This is largely attributed to huge sops being given to bio-diesel by countries in the European Union,” said O.P. Goenka, a national expert on edible oil and former President of the Federation of Andhra Pradesh Chambers of Commerce and Industry.

“The EU member countries offer huge subsidies and high prices for bio-diesel. Encouraged by this lucre, part of crude palm oil and rape seed oil stocks are being diverted to units that produce bio-diesel,” he said. This has resulted in scarcity, raising prices globally.

Rajender Prashad Agarwal, President of AP Oil Millers’ Association, said the price of soya oil in the retail market had gone up to Rs 70 a kg from Rs 55 a month ago. “International price for this soft oil is ruling at $1,450 a tonne,” he said. He said about 20 per cent of edible oil source was going to the bio-diesel industry, leading to a sudden shortage for the edible component.

Some good news

However, there is good news. The phenomenal increase in cotton and groundnut production have helped in stabilising cottonseed and groundnut oil.

While international developments resulted in rising prices, increase in domestic consumption of edible oil is also a contributing factor.

“Per capita consumption, which was hovering as low as 5-6 kilograms annually increased to 11-12 kilograms this year. The rise was up to 40 per cent in the last two years,” Goenka said.

This was due to a sharp increase in purchasing capacities of the consumers across the country. Agarwal suggested removal of the four per cent value added taxon edible oils as it benefited the farming community.

Gold Softens On Reduced Buying, Weak Global Cues

New Delhi: After moving upward for the last four days, gold prices today receded marginally by Rs 5 to Rs 12,210 per 10 gram in the bullion market here on reduced offtake. Run-up to Budget 2008-09

However, silver continued to rise on increased industrial offtake along with strong overseas advices.

Marketmen said fresh resistance in demand due to record high levels and report of a weak trend in global markets mainly pulled down gold prices.

Gold declined by $2.24 to $943.86 an ounce in London. Prices were up 4.6 per cent this week, heading for the biggest weekly advance since November 23.

Standard gold and ornaments lacked necessary buying support and shed Rs 5 each at Rs 12,210 and Rs 12,060 per 10 grams respectively. However, sovereign, remained in demand and advanced further by Rs 100 at Rs 9800 per piece of eight gram.

On the other side, silver ready maintained its rising trend on increased offtake by industrial units and added another Rs 100 to Rs 22,100 per kg, while weekly-based delivery gained Rs 10 at Rs 22,850 per kg.

Silver coins remained steady at Rs 26,200 for buying and Rs 26,300 for selling of 100 coins in limited deals.

Spot Rubber Rules Firm

Kottayam: Physical rubber prices finished firm on Friday. The market opened on a firm note but lost steam on late trading as the international rubber futures ended in the negative zone. RSS 4 closed unchanged at Rs 101 a kg both at Kottayam and Kochi after hitting a high at Rs 101.50 a kg in the morning session. RSS 3 firmed up by 88 paise to Rs 113.76 a kg at Bangkok. But the grade weakened at its March futures to ¥303.6 from ¥305.4 a kg at TOCOM.

Futures firm

The March futures finished at Rs 101.39 (101.42) a kg on MCX. On NMCE, the March futures slipped to Rs 101.09 (101.30), April to Rs 103.96 (104.25), May to Rs 105.60 (106.44) and June to Rs 107.52 (108.12) per kg for RSS 4. The open positions were 4,257 (4,243) tonnes in March, 1,844 (1,778) tonnes in April, 707 (701) tonnes in May and 224 (209) tonnes in June. The volumes totalled 1,366 (1,565) lots transacting 584 (554) lots in March, 524 (691) lots in April 133 (167) lots in May and 125 (153) lots in June. The open interest stood at 7,032 (6,931) tonnes.

Spot prices were (Rs/kg): RSS-4: 101 (101); RSS-5: 99 (99); ungraded: 97 (96.75); ISNR 20: 98.50 (98.50) and latex 60 per cent: 66 (66).

Spices Export May Top Target

Kochi: If the current trend is any indication, the exports of spices from the country are likely to cross the target of Rs 3,600 crore set by the Spices Board for the current fiscal. Run-up to Budget 2008-09

The total shipments during April-January 2007-08 stood at 3,49,776 tonnes valued at Rs 3,485.48 crore compared with the target of 3.8-lakh tonnes valued at Rs 3,600 crore. During the corresponding period of the previous fiscal, the total exports were at 2,92,185 tonnes valued at Rs 2,850.45 crore. Thus, there has been a substantial increase — both in volume and value.

Chilli and mint

Compared with the performance of April-January 2006-07, the achievement during the year is higher by 20 per cent in volume and 22 per cent in terms of rupee value, an office release said. In dollar terms of value, the growth is 38 per cent. Against the target of 3.8 lakh tonnes valued at Rs 3,600 crore ($875 million) fixed for the year, 99 per cent of the dollar value (97 per cent in rupee value) and 92 per cent of the volume have already been achieved during the first ten months.

Export of spices like chilli and mint products have already exceeded the targets both in terms of volume and value. During the period, export of coriander and cumin has exceeded the target in value terms and vanilla in volume terms.

Spices such as pepper, chilli, cardamom (large), coriander, fennel, fenugreek, vanilla and other miscellaneous spices performed better than last year. Value added spice products such as curry powder, spice oils and oleoresins and mint products have also done better compared with last year. Performance of some of the items such as cardamom (small), ginger, turmeric, cumin, celery, garlic and nutmeg and mace fell short of last year’s performance.

During April-January 2007-08, the export of pepper from India has been 29,300 tonnes valued at Rs 427.63 crore, which is higher by 21 per cent in quantity and 71 per cent in value compared with last year’s achievement of 24,160 tonnes valued at Rs 250.24 crore. The average fob unit value has increased to Rs 145.95 per kg from Rs 103.58 per kg of last year. During the period, Indian pepper has become more competitive in the international market compared with other major producing countries such as Vietnam, Indonesia and Malaysia. The major buyers of Indian pepper are the US followed by UK, Italy, Germany and Canada.

During the first ten months of the current financial year, the export of chilli from India exceeded last year’s total export performance of chilli and reached an all-time high — both in terms of quantity and value. During the period, India exported 1,57,500 tonnes of chilli valued at Rs 848.37 crore compared with 1,04,885 tonnes valued at Rs 557.69 crore of last year.

Malaysia is the largest buyer of Indian chilly followed by other traditional buyers — Bangladesh, Sri Lanka and the US. The export of chilli accounts for 45 per cent in terms of quantity and 24 per cent in terms of value of the total export of spices from India. Presently, India is the major source of red chilli in the international market. The stringent quality measures implemented by the board, viz. mandatory sampling and analysis for presence of Aflatoxin and adulterant Sudan in export consignment of chilli, have made Indian product more acceptable in the international markets.

Value realisation

Among the seed spices, coriander, fennel, fenugreek and other seeds like mustard, dill and ajowan have performed better than last year. During the period April-January 2007-08, 21,250 tonnes of coriander valued at Rs 87.42 crore were exported compared with 16,470 tonne valued at Rs 60.52 crore of last year.

Pepper Futures Steady On Buying Support

Kochi: Pepper futures market closed steady on Friday after ruling easy and then rising. There was good domestic demand because of the moving out of over 1,000 tonnes of black pepper from the exchange, which is nearly 25 per cent of the exchange stock. Run-up to Budget 2008-09

Movement of the commodity from Karnataka by evading tax appears to have slowed down following some tightening of the borders has led to demand coming to Kerala now, market sources told Business Line.

In the international market the buyers are waiting for selling pressure to emerge in Vietnam. But, the prices were reportedly moving up. Prices of FAQ 500 GL has gone up to $3,540 a tonne (f.o.b.) and indications were that it might touch $3,700 a tonne (f.o.b.)

Given this situation some of the multinational companies operating there are said to have taken MG 1 from here due to shortage of heavy pepper in Vietnam. Indian parity remained at $3,875-3,900 a tonne (f.o.b.). Prices in other origins also continued to remain firm at previous levels.

Marginal rise

March contract on NCDEX moved marginally by Rs 28 a quintal to Rs 14,880 on Friday. All other contracts except July moved up by Rs 2 to Rs 187 a quintal. July contract declined by Rs 33 a quintal.

On NMCE, March contract dropped by Rs 37 a quintal to Rs 14,621. April, May and August dropped by Rs 34, Rs 4 and Rs 266 a quintal respectively, while June and July moved up by Rs 90 and Rs 203 a quintal.

Total turnover on NCDEX moved up by 2,680 tonnes to 15,498 tonnes, while that on NMCE went up by 461 tonnes to 1,679 tonnes.

Spot prices ruled steady at previous levels on Friday at Rs 13,700 (un-garbled) and Rs 14,300 (MG 1) a quintal.

Cardamom Steady On Lower Arrivals

Kochi: Cardamom prices at the auctions held in Kerala and Tamil Nadu during the week ruled steady on tight supply. Run-up to Budget 2008-09

The individual average prices hovered around Rs 600 a kg at the auctions held during the week.

Average prices at KCPMC auction on Sunday stood at Rs 615, while that on Monday at the CPA auction in Bodinayakannur dropped to Rs 593.99.

At the Heddar Systems auction on Tuesday, it moved up to Rs 610.92 a kg. On Wednesday, at the CPMC auction it declined to Rs 605.05 a kg.

Again at the STCL auction on Thursday, it dropped further to Rs 599.85 a kg.

Arrivals remained thin compared to that of the same period in the previous seasons, market sources said.

At the STCL auction in Bodinayakannur on Thursday, total arrivals stood at 25 tonnes, of which, 23 tonnes of cardamom were sold.

Maximum price was Rs 709 a kg and the minimum Rs 251.50 a kg. Export buying was negligible, they said.

Buyers active

At the CPMC auction on Wednesday at Vandamettu total arrivals stood at 22 tonnes and the entire quantity was sold out, P.C. Punnoose, General Manager, CPMC, told Business Line.

According to him, buyers were active and the maximum price was Rs 681.50 a kg and the minimum Rs 481 a kg.

Exporters bought three tonnes of the capsules as there is said to be demand from selected overseas buyers for the superior variety Indian produce.

Upcountry buyers were also active as it appears that they were buying for advance sales next season.

Total arrivals during the current season up to February 20 stood at 3,732 tonnes compared to 5,830 tonnes in the corresponding period last season.

Weighted average

Sales also fell sharply to 3,478 tonnes from 5,353 tonnes in the previous season. Weighted average price stood at Rs 488.55 a kg compared to Rs 300.38 a kg as on February 20, 2007.

Prices of graded varieties as on February 16 were AGEB Rs 715–725, AGB Rs 645–655, AGS Rs 630-640 and AGS 1 Rs 610–620 a kg.

Prices in the local market at Bodinayakannur on Thursday were AGEB Rs 690–700, AGB Rs 620–630, AGS Rs 610–615, AGS1 Rs 585–595 a kg. Bulk was being sold at Rs 630–710 a kg.

The weather conditions so far in the growing areas have been favourable, growers said, adding, “One shower a month will be good for the crop.”

Maize Gains On Tight Supply

Mumbai: It was profit booking time in the agriculture commodity futures trading on NCDEX as most of the near month contracts ended on Monday. Run-up to Budget 2008-09

Maize gained 2.37 per cent to Rs 798 per quintal on renewed export enquiries from Australia, Bangladesh and the Philippines. “Maize supply in the physical market was tight as it was not a major arrival season,” said a trader.

Kapas rose by one per cent to Rs 497 per 20 kg as millers hedged their position on the back of good demand from the export markets.

Guarseed gained 0.94 per cent to Rs 1,831 per quintal as the arrivals dropped to 10,000 bags from 70,000 bags last month and there was strong demand from the European Union markets.

Jeera up

Short covering helped jeera to gain 0.89 per cent to Rs 9,037 per quintal after the recent drastic fall. Rapeseed-Mustard seed futures were up 0.66 per cent to Rs 558 per 20 kg on lower production estimate and strong demand.

After a sharp rally last few sessions, barley contract lost 1.64 per cent to Rs 993 per quintal. Turmeric and chana were down 1.2 per cent at Rs 3,125 per quintal and 1.18 per cent at Rs 2,606 per quintal on profit booking. Soyabean closed flat at Rs 2,183 per quintal.

On MCX, mentha oil gained 0.58 per cent to Rs 453 per kg, while potato lsot 0.93 per cent to Rs 627 per quintal.

Gold Glitters At Rs 12,215, Silver Reaches 27-Year High

New Delhi: After breaching the crucial 12,000 mark yesterday, gold prices surged further to set a new record of Rs 12,215 per 10 gram in the bullion market here today. Run-up to Budget 2008-09

A similar trend was also noticed in silver prices as it touched 27-year high.

Marketmen said there was no physical buying in gold prices at existing higher levels but surging trend in global markets as crude oil reaching dizzy heights raised the concerns of inflation and boosted the demand for gold.

The yellow metal reached to record at $949.20 last night on the New York Mercantile Exchange and silver gained to $17.94 an ounce, the highest since 1980, they added.

Standard gold and ornaments notched up further gain of Rs 175 each to Rs 12,215 and Rs 12,065 per 10 grams respectively. Sovereign followed suit and shot up to Rs 9,700 per piece of eight gram, a level never seen before.

In the silver section, silver ready rose further by Rs 160 at Rs 22,000 per kg on firming global trend and weekly-based delivery jumped up by Rs 400 at Rs 22,840 per kg.

Silver coins rose by Rs 100 at Rs 26,200 for buying and Rs 26,300 for selling of 100 coins.

Growers Hold Back Stocks As Rubber Prices Zoom

Chennai: Prices of natural rubber, which topped Rs 100 a kg this week and were quoted at Rs 101 on Thursday, have witnessed a sudden rise during the last 10 days. And despite higher prices, buyers are not able to find stocks. Run-up to Budget 2008-09

“No one knows what is happening in the rubber market. Looks like it is being driven by speculation rather than any physical transaction,” said Prof K.K. Abraham, President of the Pala Marketing Cooperative Society.

Prices for RSS-4 (ribbed smoked sheet) had been ruling steady at Rs 94 a kg until the beginning of last week before the current bull run began. “The rates had been consistent around Rs 94 in the last two months. There is no rhyme or reason for the sudden rise in the last few days,” said Radhakrishnan of the Cochin Rubber Merchants Association.

Analysts, however, attribute the sudden rise to two factors. One, the rise in prices of crude oil, which touched a record $101.10 a barrel on Wednesday. Two, early wintering of trees, when the leaves are shed, in Thailand, the top rubber producer of the world. Crude oil derivatives are used in production of synthetic rubber, which is an alternative to natural rubber and wintering means trees cannot be tapped.

‘Alarm bells’

The rise in prices has left the user industry such as the tyre manufacturers worried. “Rubber price having crossed the Rs 100 a kg mark this week rings alarm bells for the tyre industry. An increase of Rs 5-6 a kg within a week has placed tremendous cost push pressure on the tyre industry,” said Dr R.P. Singhania, Chairman of the Automotive Tyre Manufacturers’ Association. According to the association, an increase of Rs 5 a kg in rubber price translates into an input cost increase of over Rs 100 for each truck and bus tyre.

What is more worrying is that the increase comes during the peak production period and when stocks are projected at around two lakh tonnes. “We are surprised with the sudden rise as it is a peak production period now,” Dr Singhania said.

“Stocks at the end of January were estimated at 2.20 lakh tonnes. February production is projected at 55,000 tonnes and domestic consumption at 75,000 tonnes. About 12,000 tonnes are being exported but imports are also taking place. But taking everything into consideration, there should be a carryover stock of 1.8-1.9 lakh tonnes by the end of March,” said Mr Radhakrishnan. “But we don’t find the stocks in the market,” said officials of the All-India Rubber Industries Association during a press briefing in Chennai.

“Maybe, growers could be holding stocks,” said Prof Abraham.

“Growers have been receiving fantastic prices during the last couple of years. Even small growers have been getting a good price and this has given them the capacity to hold on to their stocks. They are holding back quite a lot,” said Radhakrishnan.

Tapping

“The good prices are also seeing growers continue tapping now, which is unusual. Usually, tapping is stopped around February second week and is resumed by March-end or early April. The good prices are encouraging them to continue tapping,” Radhakrishnan said.

Though this year, production is seen lower at around 8.39 lakh tonnes against a consumption of 8.59 lakh tonnes. The stocks that can last for over two months are seen as a factor that can keep a leash on the prices. That, however, is not happening as growers, in expectation of good prices, are not bringing their produce to the market. Besides, nearly 75,000 tonnes of rubber have been imported, while exports are likely to be around 45,000 tonnes.

Industry and trade sources also blame the rise in prices to speculation. “This trend will have an adverse effect on the industry, especially tyre sector,” Dr Singhania said.

Record Price For Glendale Tea

Kochi: An invoice of handmade specialty tea offered from Glenworth Estate Ltd from its Glendale estate in Coonoor fetched a record price of Rs 625 per kg at the Cochin Leaf Auction Sale No 8 on Thursday. The tea was auctioned by M/s J Thomas & Company and bought by Amit Tea Agency, Cochin for their principal M/s Premier Tea Limited, Calcutta. The invoice represented top quality specialty manufacture, a press release issued here has said.

P.S. Sundar reports from Coonoor: “The invoice represented top quality specialty manufacture,” said a spokesman of J. Thomas. Glendale launched last month its 100-gm “Heritage Handmade Tea Packets”, but had not fixed the price yet. It also launched 250-gm “Glendale Supreme BOP” packets for Rs 45, “Glendale Frost OP” for Rs 55 and “Glendale Aurea SFTGFOP” for Rs 75.

Spot Rubber Improves

Kottayam: Spot rubber was almost steady despite a smart recovery in Japanese futures on Thursday. RSS 4 improved by 25 paise to Rs 101 a kg at Kottayam on scattered trading while the grade was static at the same level in Kochi. Traders seemed hesitant to enhance their quotes and major manufacturers stayed back letting the market to cool down the excess heat on over speculation. Run-up to Budget 2008-09

Futures firm

The domestic rubber futures stayed in tune with the global mood trading the March contract at Rs 101.49 (100.16) a kg on MCX. The March futures for RSS 4 improved to Rs 101.47 (99.94), April to Rs 104.30 (102.31), May to Rs 106.47 (104.55) and June to Rs 108.10 (106.83) per kg on NMCE. There has been some profit booking at higher levels especially in March which hit the initial daily upward limit of 2 per cent in the morning session. The open interest was 6,931 (6,787) tonnes.

Spot prices were (Rs/kg): RSS-4: 101 (100.75); RSS-5: 99 (99); ungraded: 96.75 (96.75); ISNR 20: 98.50 (98.50) and latex 60 per cent: 66 (66).

Lower Volumes On Offer At Coonoor Tea Auctions

Coonoor: An analysis of the catalogues of the brokers indicates that the volume being offered for sale No: 8 of the auctions of the Coonoor Tea Trade Association (CTTA) here on Thursday and Friday is as much as one lakh kg lower than last week’s offer. At current prices, this means a fall in total value by around Rs 52 lakh. Run-up to Budget 2008-09

The volume totals 8.50 lakh kg. Last year, Sale No: 8 was postponed due to the uncertainty over the implementation of VAT. The offer was 8.07 lakh kg. The following week, it was merged with Sale No: 9.

Fresh arrivals total 7.55 lakh kg out of the 8.50 lakh kg. The balance consists of the teas remaining unsold from previous auctions.

Of the 8.5 lakh kg, as much as 5.93 lakh kg belong to the leaf grades and 2.57 lakh kg belong to the dust grades. Again, as much as 7.86 lakh kg belong to CTC variety and only 0.64 lakh kg, orthodox variety.

Mumbai To Host 3-Day Aluminium India 2008 Expo

Mumbai: Leading aluminium manufacturers will display their wares and transact business with the target audience at the three-day exhibition — ‘Aluminium India 2008’ beginning Friday at Bombay Exhibition centre in Mumbai. Run-up to Budget 2008-09

The exhibition will have an international participation of over 70 per cent. Apart from global giants like Alcan of France and Wenstaff of US, India majors such as Nalco, Hindalco, Balco and Vedanta Resources have confirmed their participation.

The exhibition will display the latest technology used world over by aluminium companies.

The expo will provide a gist of the entire aluminium industry and its various application sectors. The other important topics to be covered are environment and management, cast house technology, recycling and melting and rolling and extrusion.

Dr Subbarammi Reddy, Minister of State for Mines, will inaugurate the exhibition.

A conference on global trend ‘Alcastek’ to be chaired by industry veteran Dr Madhukar Nilmani will be held on Friday. Speakers at the conference include G. Kirchner, Chairman of Global Aluminium Recycling Committee, Germany; U. Patel, Principal Consultant CRU, UK; and P. Suri, President of Aluminium major Balco.

The afternoon session will focus on transport sector with speakers from Mahindra and Mahindra, Ausmelt, Australia and Alcan, Germany. Orissa government is one of the partners of the event

Bollworm May Be Developing Resistance To Bt Cotton

Mumbai: Even as life science companies in seed business and vocal lobbyists for pro-genetically modified (GM) crops combine to make propagandist noises about the goodness of the technology and rapid spread of area under GM crops worldwide comes the news that pests are slowly developing resistance to transgenic crops. Run-up to Budget 2008-09

Currently, corn (maize), soyabean and cotton are the major field crops in which transgenic varieties have been commercialised. Cotton was the first major field GM crop to go commercial in 1996 in the US. Incidentally, the US is the world’s largest producer of soyabean and corn.

Gene from a bacterium - Bacillus thuringiensis (Bt) - is inserted in the cottonseed as a result of which the plant repels bollworm attack by secreting a protein-based toxin that kills the insect and saves the plant.

Survey findings

The latest is that reports, based on extensive research, emanating from the US suggest that pests may be in the process of evolving resistance to modified crops. A study of the Bt Cotton crop by researchers in the US has revealed that the bollworm – which is widely known to attack cotton boll and inflict losses – were slowly developing immunity.

Reports in the western press suggest the University of Arizona found resistant form of bollworm caterpillar in a dozen fields in the southern states of Mississippi and Arkansas between 2003 and 2006. Until last year, the US was the world’s second largest cotton producer. It continues to be a major exporter with over 70 per cent of output destined for overseas markets.

Shrinking acreage

However, area under cotton has begun to shrink following competition for acreage from crops such as corn, soyabean and wheat.

Coming about 7-8 years after commercialisation of Bt. Cotton, the survey findings of evolving resistance are sure to not only cause concern, but also set alarm bells ringing in major cotton growing countries that have embraced the technology.

In India, GM-cotton was commercialised in 2002. Since then, cotton output has surged by leaps and bounds year after year; and in 2007 it stood at over 300 lakh bales. Over 50 per cent of the country’s acreage under cotton (90 lakh hectares) is accounted for GM seeds.

The technology has delivered, so far. It is possible some kind of fatigue could be setting in? If the bollworm pest is seen developing resistance in the US, a country where cultivation is highly organised, land is well demarcated and farming systems are automated/ mechanised, there is no reason to believe it may not happen in India.

Indeed, it would be almost impossible to isolate area and control the pest in our country given the nature of agriculture - fragmented lands and millions of growers.

It is necessary for the Government, the scientists and the industry to work together to initiate studies to ascertain the status of pest resistance in our country. When we embrace technologies from abroad, we can ill-afford to overlook related developments there.

India is today the world’s second largest producer of cotton and a very large exporter. It has emerged as a force to reckon with in the global cotton sector.

Indian cotton growers are small. Crops lost to pests that have developed resistance can have devastating effect on our rural economy. The way forward is to closely monitor the situation and initiate remedial measures.

Relief Unlikely For Vanaspati Units From New Order

Mumbai: The Centre’s move to remove the mandatory use of indigenous oils such as mustard oil in the manufacture of vanaspati is unlikely to bring any substantial relief to the beleaguered industry. Run-up to Budget 2008-09

Vanaspati producers are now free to use any oil or a combination of oils – indigenous and/or imported – as raw material for the finished product. The decision seems to have been necessitated by present market conditions of strong vegetable oil prices and poor outlook for the upcoming rapeseed/mustard crop.

While there is freedom to use any oil or combination of oils, given the level of prices and vanaspati’s shrinking share of the country’s oils and fats market, the industry’s fortunes are unlikely to see any change.

Instead of examining and addressing the structural issues that stymie the vanaspati industry as also the entire vegetable oil complex - including oil mills, solvent extraction, refining - the policymakers are content with tinkering with policies that related to trade and prices. The entire vanaspati industry – or what is left of it just now – would now start to consume imported oils – mainly crude palm oil – for its raw material requirement.

Of the over 220 factories in the country, more than half are either sick or closed, while the others operate at substantially lower capacities. Low priced imports from Nepal and Sri Lanka at continue to adversely affect the industry’s economics.

Bears Pull Down Pepper Futures

Kochi: Pepper futures market on Wednesday fell on bearish activities and February prices dropped below spot prices. Run-up to Budget 2008-09

People were not coming forward to take delivery from the exchanges despite low prices as they believe that the material is of substandard quality. Some of the unscrupulous depositors allegedly managed to get substandard materials in to the exchange and offering it to investors cheaper as exchange delivered pepper.

The situation appears to be unhealthy, market sources told Business Line. People did not have confidence in the exchange goods, they said. “We have only 45,000 tonnes production and it equals the domestic consumption while the carried forward stock is in strong hands and hence it is unlikely to come out. In the international market buyers are waiting for the Vietnam prices to drop. Meanwhile, as new buyers started appearing on the market, V Asta was being offered at $4,050 a tonne (c&f) New York. Indonesia has quoted L Asta at $3775 (f.o.b.), while Brazil was offering B Asta at $3,650-3,675 a tonne (f.o.b.). Indian parity is at $3,775 a tonne (c&f).”

Vietnam was offering 500 GL at $3,425 a tonne (f.o.b.), while 550 GL at $3,625 a tonne (f.o.b.).

Feburary contract on NCDEX which matured on Wednesday, dropped by Rs 117 a quintal to Rs 13,949. All other contracts except June moved up marginally by Rs 5 to Rs 65 a quintal. June declined by Rs 15 a quintal.

On NMCE, March contract declined by Rs 28 to Rs 14,120. The drop in all other contracts was from Rs 6 to Rs 350 a quintal.

Open interest

Total open interest on NCDEX moved up by 188 tonnes to 19,893 tonnes. February position moved up by 5 per cent while March dropped by 55 per cent. April position moved up by 31 per cent. On NMCE, total open interest declined by 66 per cent to 1,704 tonnes.

Spot prices ruled steady at previous levels on Wednesday at Rs 13,400 (un-garbled) and Rs 14,000 (MG 1) a quintal.

Maize Gains On Tight Supply

Mumbai: It was profit booking time in the agriculture commodity futures trading on NCDEX as most of the near month contracts ended on Monday. Run-up to Budget 2008-09

Maize gained 2.37 per cent to Rs 798 per quintal on renewed export enquiries from Australia, Bangladesh and the Philippines. “Maize supply in the physical market was tight as it was not a major arrival season,” said a trader.

Kapas rose by one per cent to Rs 497 per 20 kg as millers hedged their position on the back of good demand from the export markets.

Guarseed gained 0.94 per cent to Rs 1,831 per quintal as the arrivals dropped to 10,000 bags from 70,000 bags last month and there was strong demand from the European Union markets.

Jeera up

Short covering helped jeera to gain 0.89 per cent to Rs 9,037 per quintal after the recent drastic fall. Rapeseed-Mustard seed futures were up 0.66 per cent to Rs 558 per 20 kg on lower production estimate and strong demand.

After a sharp rally last few sessions, barley contract lost 1.64 per cent to Rs 993 per quintal. Turmeric and chana were down 1.2 per cent at Rs 3,125 per quintal and 1.18 per cent at Rs 2,606 per quintal on profit booking. Soyabean closed flat at Rs 2,183 per quintal.

On MCX, mentha oil gained 0.58 per cent to Rs 453 per kg, while potato lsot 0.93 per cent to Rs 627 per quintal.

Crude Oil Import Bill Jumps Over 29%

New Delhi: Crude oil import bill has jumped 29.5 per cent to $48.027 billion in the first nine months of current fiscal on increased volume of imports. India imported 91.224 million tons of crude oil for Rs 192,974 crore ($48.027 billion) in April-December 2007, as against import of 82.774 million tons for Rs 169,175 crore ($37.095 billion) in the corresponding period of last fiscal, according to latest data from the Petroleum Ministry. Run-up to Budget 2008-09

Import of 15.576 million tons of petroleum products cost the nation Rs 41,049 crore ($10.173 billion) in first nine months of current fiscal while export of 29.614 million tons of products earned the country Rs 78,286 crore ($19.395 billion).

The net oil import bill (crude oil import plus petroleum product import minus exports) in April-December was Rs 155,737 crore ($38.805 billion), as against Rs 134,655 crore ($30.359 billion) in the same period a year ago.

In April-December, India imported 4.79 million tons of naphtha for Rs 14,113 crore, 1.985 million tons of LPG for Rs 5,602 crore and 1.978 million tons of kerosene for Rs 6,445 crore.

Exports during the period were led by 10.869 million tons of shipments of diesel for Rs 29,208 crore and 7.612 million tons of naphtha for Rs 21,707 crore.

MCX Re-Files For Public Issue

Mumbai: Multi Commodities Exchange of India (MCX) has re-filed its draft red herring prospectus (DRHP) with SEBI to tap the capital market with an initial public offering (IPO) of one-crore shares of Rs 5 each for cash. Run-up to Budget 2008-09

With an enterprise value of Rs 4,400 crore, analysts expect the issue price to range between Rs 500-600. MCX plans to raise Rs 500 crore to Rs 600 crore through the IPO.

IT infrastructure

Of the total issue on offer, 60 lakh shares will be issued afresh, while 40 lakh will be through ‘offer for sale’. Earlier, the exchange had filed DRHP in mid-2006, but had to defer the issue.

The net proceeds from the issue would be used for expansion and enhancement of the information technology infrastructure of the exchange. The proceeds will also be used to set up a Commodities Ecosystem Infrastructure, for equity investment in a clearing corporation set up by MCX, for strategic investments and acquisitions and also for general corporate and issue expenses, the company said.

For the nine months ended December 31, 2007, MCX net profit declined by 9.12 per cent to Rs 54.75 crore compared with Rs 60.24 crore logged during the same period of the previous fiscal.

Financial Technologies, the promoter, holds 32 per cent stake. NYSE Euronext Inc had bought a five per cent stake for about Rs 220 crore recently.

Vanilla Growers Hit By Falling Prices

Kochi: Low prices for natural vanilla have put growers in dire straits. The growers are looking to the Government to bail them out of the crisis by initiating steps to increase use of the product in the country. The prices of A-grade vanilla bean have dropped sharply to much below the remunerative levels, at Rs 60-65 a kg, while B and C grades are sold at Rs 50 and Rs 25 a kg respectively. To be remunerative the prices should remain at around Rs 200 a kg, C.V. Jacob, Managing Director, Synthite Industrial Chemicals, a major grower as well as processor of vanilla, told Business Line on Tuesday. Run-up to Budget 2008-09

In the international market, he said, the demand is only for A-grade beans, length of which should be at 8 inches. The price offered, at present, by the overseas buyers is just $20 - $21 a kg against $450/kg about four years ago, he said.

The top producer of natural vanilla in the world, Madagascar, he said, can afford to offer at low prices as the cost of production there is much less than that of here. According to Jacob, areas suitable for sustainable vanilla cultivation here is at elevations above 2,000 feet. In other areas, it would require irrigation.

He said his company had bought 500 tonnes of green beans during the just ended harvesting and processing season from growers in Mysore in Karnataka and Kozhikode and Ernakulam districts of Kerala. A-grade beans were processed and exported, while the balance quantity was used for extraction.

The total Indian production, during 2007-08 season, according to him is estimated at 1,500 tonne of green beans.

The top category beans classified as “gourmet” grade are above 15 cm in length; they are selected from A grade beans having over 1.75 per cent vanillin and 25-30 per cent moisture content and are brown in colour. Normally, 20-25 per cent of the total production from the scientifically cultivated farm may be of this grade, he said.

Seek Govt aid

Given this disturbing situation an effective government strategy, which has been missing so far, is the need of the hour to help the vanilla growers in the country, he said. The Government may have to come out with some legislation, making use of natural vanilla mandatory in some of the ice-creams and other food products, he said.

Even though ‘Amul’ has come forward to use it in its products, it has not so far made much impact on the prices. Since it is a co-operative institution it has been procuring natural vanilla only from the cooperatives and hence the private companies remain left out.

Consumption

Natural vanilla consumption in the country at present is only around five per cent of the total consumption, he said. Total vanillin consumption is estimated at around 400-500 tonnes a year. “This trend should change and the related industry such as of ice cream, confectionary and other food manufacturing sectors should absorb more natural vanilla,” he said. As the international price has dropped significantly, the Indian exports of natural vanilla has shown a substantial increase. Shipments during April-December 2007 stood at 140 tonnes valued at Rs 11.65 crore against the target set for the current fiscal by the Spices Board of 150 tonnes valued at Rs 26.25 crore.

Tyre Industry Worried Over Rubber Exports

New Delhi: The domestic tyre industry has expressed concern over the move of the Rubber Board to promote exports of natural rubber. This concern has been expressed on the heels of projections of a three per cent drop in rubber production by the end of current fiscal. Run-up to Budget 2008-09

The tyre industry, which consumes 55 per cent of the natural rubber produced in the country, is worried that the exports would affect the availability of natural rubber at a time when it is not able to meet domestic demand.

Expected growth

“Production of natural rubber in the fiscal 2007-08 is expected to go down by 3 per cent, while consumption would grow by 5 per cent. Of this, consumption by the tyre industry is expected to increase by 6.6 per cent and non-tyre consumption by 3 per cent. In such a scenario, we would like the Government to encourage domestic consumption as against exports,” said Rajiv Buddhiraja, Director-General, Automotive Tyre Manufacturers Association.

According to him, the Rubber Board, which has set a target to export 46,000 tonnes during the current fiscal, has so far exported 30,000 tonnes of natural rubber and plans to export 16,000 tonnes during February and March.

The lack of availability of natural rubber compels the tyre industry to import it at a custom duty of 20 per cent.

This is expected to impact the margins of the tyre industry as 42 per cent of the overall cost is owing to natural rubber prices.

“The duty on raw material at 20 per cent being higher than the import of tyres at 10 per cent is a huge concern. With the rubber growers resorting to exports, we would like the Government to allow the duty-free import of rubber,” said Buddhiraja.

Rubber Futures Continue To Rule Firm

Kottayam: The domestic rubber futures continued to rule firm catalysed by a firm closing in international markets. The last traded price for the March futures improved further on NMCE to Rs 101.55 (Rs 100.71), April to Rs 104.54 (Rs 103.88), May to Rs 106.52 (Rs 105.90) and June to Rs 108.80 (Rs 107.95) per kg for RSS 4.

Open interest

Meanwhile, the March futures was steady at Rs 101.00 a kg on MCX. The open interest stood at 6,684 (6,662) tonnes with 4,187 (4,185) tonnes in March, 1,724 (1,708 ) tonnes in April, 666 (674 ) tonnes in Mayand 107 (95) tonnes in June on NMCE . The volumes were 1,271 (1,829) tonnes. RSS 3 crossed the 300-mark at its March futures to finish at 301.1 yen a kg (Rs 111.97) against 296.2 yen followed by yet another bull run at TOCOM. The grade closed at Rs 111.36 (Rs 110.73) a kg at Bangkok. The physical rubber market remained closed on account of a State wide harthal on Tuesday.

Potato, Turmeric Futures Hit Upper Circuit

Mumbai: Lowering of circuit to two per cent and four per cent on Monday had its impact in agriculture commodity futures trading with turmeric and potato hitting the upper circuit, while chilli was locked at the lower circuit. Jeera which initially hit the lower circuit of 2 per cent pared much of its losses but still closed in the red at Rs 8,855 per quintal. Run-up to Budget 2008-09

Turmeric futures in NCDEX gained 2.44 per cent to Rs 3,152 per quintal with buying mostly done by stockists.

Mentha up

Strong spot markets pushed up mentha futures on MCX by 1.65 per cent to Rs 443 per kg. Chana closed flat at Rs 2,617 per quintal on lower production estimates.

Chilli dropped to the lower circuit at 3.51 per cent to Rs 3,902 per quintal as arrivals improved to 70,000 bags from 20,000 bags last week.

Cocud and sugar closed lower 0.92 per cent at Rs 407 per 20 kg and 0.64 per cent at Rs 1,404 per quintal, respectively.

Domestic Market Important For Fisheries

Kakinada: The domestic market is as important for the fisheries sector as the export market, and therefore attention should be paid to their equal development, said Dr S. Ayyappan, Deputy Director-General of the Indian Council of Agricultural Research (Fisheries). Run-up to Budget 2008-09

He was talking to the press here on Monday, after inaugurating a molecular biology laboratory at the Central Institute of Fisheries Education. He said the focus should be on the metros and other cities in promoting fisheries. It was not desirable to depend entirely on the export market, even though export earnings were necessary.

He said there was demand for jellyfish and octopus from China, Singapore and Hong Kong. “India is trying to meet the requirements subject to certain restrictions. The Indian fisheries industry is diversifying into species other than shrimp of late and that is a healthy trend,” he remarked.

On the whole, however, growth of the agricultural sector, of which fisheries is a part, was not very impressive in comparison with the other sectors in recent times, Dr Ayyappan said.

He said the fisheries sector could deal with the problem of anti-biotic residues in exported fish and efforts to meet the quality specifications of the US and European markets were considerably successful.

Dr Dilip Kumar, CIFE Director, said the institute was conducting training programmes for farmers and soon a fresh batch of 400 farmers would join the institute. Later, he participated in a seminar on aquaculture conducted by Adikavi Nannayya University at Rajahmundry.

He spoke about the problems and prospects of the sector in Andhra Pradesh.