Dues To Sugarcane Growers Top

G. Chandrashekhar Mumbai: A total of over Rs 3,900 crore is the amount outstanding from sugar mills as arrears for sugarcane procured from growers as of January 15 this year, the Government stated in Parliament recently.

The dues cover the sugar season till 2007-08.

The share of the private sector mills is the largest at Rs 2,321 crore representing close to 60 per cent of the total arrears of Rs 3,922.15 crore, while the co-operative sector with arrears of Rs 1,474.15 crore accounts for slightly less than 40 per cent.

The rest is owed by the public sector.

Usually, the private sector’s cane arrears would be higher than that of co-operatives.

But in the current sugar season 2007-08, the cane arrears of co-operatives (Rs 1251.39) are higher than that of the private mills (Rs 1138.23).

Buffer stock
Disclosing details of outstanding payment of sugarcane dues, the Minister of State for Agriculture as well as for Consumer Affairs, Food and Public Distribution, Akhilesh Prasad Singh, stated in the Rajya Sabha that the buffer stock created by the Government was aimed at enhancing the liquidity of sugar mills affected by decline in sugar prices and stock value.

The buffer stock creation involved an annual subsidy of Rs 880 crore from the Sugar Development Fund and there is an additional bank credit of about Rs 978 crore. Improved liquidity would help clear cane price arrears as first priority, he said.

The payment of cane arrears and announcement of State Advised Price (SAP) by the State governments over and above the Statutory Minimum Price (SMP) for cane announced by the Union Government continues to be a subject of litigation in courts.

Falling prices

It is also believed that falling sugar prices constrained the capacity of sugar mills to pay cane price to growers in time. Due to high level of sugar production during the last season 2006-07 and initial estimate of high production during the current season 2007-08, sugar prices had declined considerably.

No report of farmers giving up sugarcane cultivation as a result of hardship faced by them due to pending dues has been received, the Government stated in response to concerns that area under sugarcane may shrink.

$200 A Tonne Export Duty On Basmati

New Delhi: The Government’s decision to lower the minimum export price (MEP) of basmati from $1200 a tonne to $1000 a tonne and simultaneously impose an export duty of $200 or Rs 8,000 per tonne on basmati rice exports has derailed the predominantly export-oriented industry’s business calculations.

The Finance Minister, P. Chidambaram’s proposal while replying to the Finance Bill 2008 in the Lok Sabha relating to basmati rice export duty is construed as a move to garner revenue to the exchequer at a time when the Government is compelled to cut down customs duty on a whole range of mass consumption items in recent months as part of its anti-inflationary strategy.

Latest official figures based on provisional statistics show that the country exported basmati rice worth Rs 3,240 crore during the first eleven months of the current fiscal, against Rs 2,482 crore in the corresponding period of 2006-07, clocking a growth rate of 31 per cent.

The All-India Rice Exporters Association President, Vijay Sethia, told Business Line here that ever since the international rice prices had been on the high from October 2007 onwards, the Government has been periodically pushing up the MEP on basmati rice several times with the last revision at $1200 a tonne MEP for basmati rice.

Little for manoeuvring

Sethia said normally rice exporters undertake contracts on a committed volume and price with the latter being invariably lower than the spot market price.

They have little room for manoeuvre to bear the extra export duty burden cast on them. As 90 per cent of the country’s basmati rice is exported, this sort of additional duty burden and periodic hike in MEP caused a big dent on the contractual obligations of exporters, weaning the importers away from Indian suppliers in the global grain markets.

Sethia felt that if this sort of sustained assault is upon the basmati rice export industry, India’s rivals such as Pakistan, Vietnam and Thailand would capture a large chunk of the traditional markets built and nurtured by domestic industry over long years.

Industry sources further said the blanket ban on export of non-basmati rice early this month has already taken a toll on the export of Pusa 1121 basmati rice, which conforms to all quality parameters of basmati rice but falls technically in the category of non-basmati rice in the absence of a proper definition of what constitutes basmati rice.

Non-Basmati shipments

Given the ground reality that the production of Pusa 1121 rice variety was around 60 per cent of the crop size of basmati paddy of the kharif 2007, the recent ban on non-basmati but premium variety would suck out 60 per cent of export of basmati rice from the country. With the ban in vogue, trade sources reckon that already the Government has prevented export worth about two lakh tonnes of Pusa 1121 basmati rice for the later period of the crop year.

Sethia contends that growers of Pusa 1121 account for a lion’s share in the export market and farmers who have been growing this basmati variety were getting an annual return of Rs 50,000 to Rs 60,000 per acre and with the ban on this rice and slapping of export duty on basmati rice, these growers’ annual income would get pruned to Rs 20,000 per acre, affecting their livelihood security and pushing them to press for loan waiver or other sops.

Echoing similar apprehensions, another important rice exporter KRBL Chairman, Anil Mittal, said that as it is the raw material cost of cultivating rice accounts for 70 per cent and other overheads including logistics and packaging cost another 25 per cent with the industry being left with a margin of 5 per cent. If on this wafer-thin margin, a huge burden like 20 per cent tax is added, the industry could only denude its capital to stay in the fray to export.

Mixed Trend In Spot Rubber

Kottayam: Spot rubber witnessed a mixed trend on Tuesday. RSS 4 ended flat at Rs 117 a kg at Kottayam, though the grade touched an intra-day low at Rs 116 a kg on early trades, while it was quoted at Rs 117.25 a kg at Kochi.

Covering groups remained active on sheet rubber on late trades as there were no quantity sellers even at higher levels. Prices declined for most of the remaining grades on buyer resistance.

In the international market, RSS 3 (spot) slipped by 38 paise to Rs.114.81 a kg at Bangkok.

Futures improve

On NMCE, the May futures improved to Rs 117.51 (117.21), June to Rs 115.70 (115.01) and July futures to Rs 111.25 (110.73) per kg while the August futures slipped further to Rs 108.40 (108.79) a kg for RSS 4.

The open interest stood at 4,138 (4,093) tonnes. The volumes fell to 1,770 (2,860) lots transacting 863 (1,299) lots in May, 809 (1,168) lots in June 57 (294) lots in July and 41 (99) lots in August.

Spot prices were (Rs/kg): RSS-4: 117 (117); RSS-5: 115 (116); ungraded: 113 (114); ISNR 20: 114.50 (115) and latex 60 per cent: 78.50 (78.50).

Closed Sugar Mills Increased To 113

New Delhi: The Government today said the total number of closed sugar mills in the country has increased to 113 this season from 105 last year.

While in a majority of the States, the number of closed sugar mills remained static or rather declined, in Uttar Pradesh, it surged from 14 in 2006-07 to 23 in 2007-08 season, according to the data furnished by the Minister of State for Food and Public Distribution, Akhilesh Prasad Singh, in the Lok Sabha.

In a written reply to a query on steps taken by the Government to revive the closed sugar mills, Singh said it was the responsibility of the entrepreneur concerned to take steps.

Positive Closing On Monday Of Spot Rubber

Kottayam: Spot rubber made another positive closing on Monday. RSS 4 finished better at Rs 117 and Rs 118 a kg respectively at Kottayam and Kochi against Rs 116.50 a kg on the previous weekend.

According to informed sources, the grade hit an all time high at Rs119 a kg at Kottayam during the session as covering groups remained extremely aggressive anticipating further rice in prices. But the rates failed to sustain as speculators stayed back on late trading possibly triggering a technical correction at higher levels.

The May futures for RSS 3 firmed up to ¥298.4 (Rs 114.06) a kg from ¥293.5 at TOCOM. Rubber turned weak towards close after a firm start on NMCE. The May futures slipped to Rs.116.65 (116.96), June to Rs 114.60 (115.74), July to Rs 110.50 (111.02) and August futures to Rs.108.62 (109.32) per kg for RSS 4.

Spot prices (Rs a kg) were: RSS-4: 117 (116.50); RSS-5:116 (115); ungraded:114 (112.50); ISNR 20:115 (114); and latex 60%:78.50(77.00).

Active Demand Of Coonoor Tea

Coonoor: Prices rose Rs 2 a kg on the average at Sale No. 17 of the auctions of Coonoor Tea Trade Association (CTTA) here on Friday despite the volume offered being a 23-week high (barring last week’s offer), as active demand prevailed.

Quality invoices fetched handsome price-increase as buyers went scouting for them. “High-priced CTC leaf grades fetched Rs 2-3 a kg more. Smaller brokens and fannings were dearer by Rs 3. Clean black sorts fetched Rs 5 more. Orthodox whole leaf and primary grades were dearer by Rs 4-6. Brokens and fannings got Rs 5 more. Better medium and medium CTC dusts got Rs 2 more, while their plainer counterparts Rs 3-4 more. Primary orthodox dusts got better demand than in the recent weeks. Clean secondaries sod dearer up to Rs 3. But, some teas falling below buyers’ quality expectations suffered withdrawals”, an auctioneer told Business Line.

Among the corporate buyers, Hindustan Unilever Ltd lent useful support for good medium leaf grades. It did not operate in the dust market.

On the export front, Pakistan was forceful on blacker sorts. It also picked up some well-made fannings to cover short supplies. Egypt shippers bought smaller brokens and fannings. CIS and Poland continued to be selective.

Among the CTC teas from bought-leaf factories, no brand crossed the Rs 100-mark this week. Darmona Estate got the highest bid of Rs 99 for its RD grade. Homedale Estate got Rs 92, Selva Ganapathy Supreme Rs 90, Hittakkal Estate Rs 88, Deepika Supreme Rs 86, Green View Estate, Kannavarai Estate, Shanthi Supreme, Professor, Vigneshwar Estate and Highfield Estate Special Rs 84, Ella Estate Rs 83, Sree Ram supreme Rs 82, Garswood Estate and Kotagiri Estate Rs 80.

Among the orthodox teas from corporate sector, Curzon got Rs 123, Chamraj Rs 118, Colacumby Rs 112, Tiger Hill, Prammas and Kairbetta, Rs 105, Kodanaad, Corsley, Glendale, Sutton and Thaishola Rs 100.

Quotations held by the brokers indicated bids ranging from Rs 45-47 a kg for plain leaf grades and Rs 65-84 for the brighter liquoring sorts. They ranged Rs 49-53 a kg for plain dust grades and Rs 65-82 for brighter liquoring sorts.

Castor Seed Futures May Remain Firm

Mumbai: Castor seed futures on NCDEX may remain firm in the short term, due to good export demand besides arrivals slowing down in the major mandis of Gujarat and Rajasthan.

Though the prices in the international market moved up substantially, export volumes declined marginally in the past three years, due to rupee appreciation. In fiscal 2008, India exported 1.7-lakh tonnes of castor oil against 1.9-lakh tonnes in the last fiscal.

Export price in February-March was quoted at about $1,400 per tonne (free on board). “Despite export volumes being lesser than the last year, better price realisation has helped to moderate the impact of rupee appreciation against dollar,” said Chowda Reddy, Research Analyst, Karvy Commodities.

China consumes about one-third of global castor oil production, while domestic demand is very low. Other major consumers’ include Europe and Brazil.

Production

For crop season, which ends in May 2008, the production is estimated at about 9.09-lakh tonnes, up by 16 per cent over last year. Yields and area under castor cultivation has been increasing, especially in Gujarat. Area under castor seed has increased by 26 per cent to 3.54-lakh hectares in 2007-08.

Gujarat is estimated to produce 6.5-lakh tonnes in 2007-08 with a yield of 1,838 kg per hectare. It has about 20 castor seed processing mills and major hub for castor seed industry.

Gujarat and Rajasthan together contribute about 87 per cent to total production. Gujarat has the largest share in India with 71 per cent followed by Rajasthan 16 per cent and Andhra Pradesh 9 per cent.

Prices

Castor seed prices have gained 46 per cent in the last one year and are currently quoted at around Rs 500-520 per quintal in Gujarat and Rajasthan. Negligible carry forward stock due to lower output last year has pushed the prices to higher levels.

In the short term, futures prices on NCDEX may touch Rs 580-600 per quintal due to low arrivals and higher export demand. However, prices could come down sharply from Rs 600 levels in long term, as sowing begins from June-July.

FAPCCI Seeks Removal Of Sales Tax On Foodgrains

Hyderabad: The Federation of Andhra Pradesh Chambers of Commerce and Industry ( FAPCCI) requested the State to exempt the food grains from sales tax in line with the practice in some other developed States in the country.

In a representation to the Chief Minster, Dr Y.S. Rajasekhara Reddy, FAPCCI said due to levy of tax in Andhra Pradesh (in the absence of tax in neighbouring States), the food processing industry in the State was unable to progress as any value addition or processing was resulting in escalation of prices as well as taxes rendering the industry uncompetitive.

Bringing the attention of the Chief Minister to a recommendation by a Group of Ministers, constituted by the State, that the sales tax should be removed on food grains, the industry body said at the time of introduction of value added tax in the State it had sought removal of sales tax on food grains in vain.

“In view of the very comfortable growth of sales tax revenues in the recent past, we are confident that foregoing less than Rs 500 crore by abolishing sales tax on food grains is not going to impact State revenues,” it said.

The tax loss, if any, would be offset by the development of food processing industry which would lead to more employment generation and better price realisation for the farmers, it added.

Good Demand For CTC Teas In N India Sale

Kolkata: Last week, the CTC auctions in North India met with good demand and the teas sold readily at attractive prices and at considerable premiums over the same period last year, according to the tea auctioneers, J. Thomas & Company Pvt Ltd .

The local dealers and western India buyers were active with useful support from other internal sections. The packeteers were quiet. In the orthodox section, clean well made whole leaf grades remained firm.

Brokens and fannings were steady except a few smaller and flakier varieties which were irregularly lower. The West Asian and the CIS shippers were active with local dealers operating on smaller grades.

The Darjeeling offerings saw a good demand and sold well following quality. Plainer sorts, however, were irregularly lower. The traditional exporters and local dealers operated while the UK/Continent shippers were selective.

Crop

After a poor start in March, most growing regions reported conducive cropping conditions, and April crop is likely to make up the March losses.

International

The Mombasa auction last week saw brighter PD and dust grades firm to dearer while the remainder were irregular. Pakistan, Yemen, Sudan, Egypt, Russia, Kazakhstan and Somalia continued to operate actively.

The Colombo auctions saw strong demand. Western medium and high growns were irregular while the remainder was firm to dearer. The CIS, UK/Continent and West Asian shippers were active with good inquiries from Japan, Turkey and Syria.

Short-Term Weakness Tells On Gold, Despite Minor Recovery

Chennai: Last week, gold prices declined below $900 an ounce. At the outset, a short-term weakness seems to have fully set in gold, despite a minor recovery on Friday to $889.

A major reason for gold’s fall last week was the strengthening of dollar. With the US President, George Bush, saying that things are likely to look up from this week, we may see gold’s sheen wearing off a little more this week. Among other dampeners for gold last week was the World Gold Council’s report for the first quarter of this year. The report shows fall in demand across all sectors.

Developments

In particular, jewellery demand has declined sharply in the first quarter, basically since gold prices had ruled high during the period. It even touched a record $1,034 on March 17. The overall indication is that physical demand for the yellow metal is yet to see any significant pickup. In the futures, too, there have been interesting developments, signalling this fall.

Long speculators have been cutting down their holdings. Open interest of long speculators, who make up 47 per cent of the non-commercial holdings in gold, has declined to 2.02 lakh from 3.15 lakh that was witnessed when gold was at its peak. Other long position holders also seem to be shedding their holdings.

Marriage season

Also, gold has been unable to cash in on certain bullish signals, signifying weakness. However, the technical charts indicate oversold positions, indicating that things could turn around. In the medium term, there are a few positive things to look for in the case of gold.

One, the stable price in the yellow metal has lead to some buying in India and Europe. This could translate into gains in the second quarter, which could also report a pick up in the yellow metal. Two, with Indian marriage season ahead, there could be some physical demand as well.

Dollar weakness

Technically, gold could be supported at $875. If it falls below that, then the next level of support is at $850. If that is breached, then the 50 per cent retracement from $639 to $1,032 could come into play; that is $836. On the upper side, gold could first face resistance at $912.52 and if it goes past that, it could face another hurdle at $951.99.

Remember, gold has been unable to move past $952 in the last couple of weeks. Analysts and experts still hold the view that, in the long-term, gold has the potential to scale $1,500. Dollar weakness is again seen helping it to reach that level.

Silver will also follow gold’s cues. It is seen supported at $16.35. Resistance is seen at $17.02.

Metals

Prices of metals are seen supported due to supply concerns. Rise in oil price, leading to increased costs, is likely to affect aluminium production and that, in turn, an increase in price, according to Angel Broking.

The continuing production problems are likely to affect demand-supply equation in copper, whose prices are likely to rise. Rising demand, coupled with supply shortage, will propel tin prices.

Gold To Test Support Levels

Comex gold futures ended slightly higher on Friday, rebounding from three-week lows. Gold investors, including those in the recently hot exchange-traded-fund market, are pulling out of the metal and returning to stocks as some see the US economic outlook brightening and the dollar putting in a bottom.

Gold’s safe haven sparkle could be fading as markets start to believe that the worst of the liquidity crisis might be over. Gold responded with only modest gains, when the euro and crude oil hit record-highs on Tuesday.

Comex April gold futures fell sharply lower in line with our expectations. As mentioned in the previous update, there are some indications in the big picture now for a large downward correction. A potential head and shoulder is in the making. Daily close below $875 could now open the way for a huge fall towards $830 or even lower towards $795 levels.

Rallies to $908/10 followed by $925 could find good resistance in the coming sessions. We believe that the third wave could have ended at $1,033 and the fourth wave is in progress right now. We could now be tracking a wave four A-B-C in progress and once the correction ends, a potential fifth-wave impulse could be in the making. The RSI is in the neutral zone, indicating a negative divergence, a sign of possible intermediate top, one of the reasons for our expectations of a large downward correction.

The averages in MACD have gone below the zero line of the indicator, suggesting a bearish reversal. Only a crossover above the zero line will now restore confidence for bullishness ahead. Therefore, expect gold futures to test the support levels.

Supports are at $872, 850 & 830. Resistances are at $908, 925 & 936.

Rice Down On Poor Demand

New Delhi: The wholesale price of rice on Friday declined by Rs 200 a quintal here due to lack of demand from the buyers. Basmati (common) prices declined by Rs 200 at Rs 6270-6470 per quintal.

Among non-basmati rice, permal (raw) and permal (wand) rates dipped by Rs 50 each at Rs 1320-1420 and Rs 1550-1650 per quintal respectively.

"Activity has virtually dried up as traders were not ready to take any fresh positions in view of raids on wholesale grain traders", said a grain merchant. Another trader said that reports of a fall in global markets have also led to a weak sentiment in the wholesale grain market here.

In order to control inflation, the government has banned the export of non-basmati rice and has also hiked the minimum export price (MEP) of basmati rice to increase the availability of the rice in the domestic market. Meanwhile, wheat MP (Deshi) prices remained unchanged at Rs 1240-1490 in the absence of any worthwhile buying or selling. Barley (UP and Rajasthan) prices declined in the range of Rs 30-50 per quintal taking cues from prevailing prices at producing belts.

Following were today's quotations per quintal: Wheat MP (deshi) 1240-1490, wheat dara (for mills) 1045-1090, chakki atta (delivery) 1110-1115, Chakki atta Rajdhani (10 kgs) 150, shakti bhog (10 kgs) 160, roller flour mill 1105-1110, maida 1200-1215 (90 k ilos) and sooji 1225-1240 (90 kgs).

Rice basmati (lal quila) 7000, Shri Lal Mahal 7000, Basmati common 6270-6470, Permal raw 1320-1450, permal wand 1550-1650, sela 2100-2250 and rice IR-8 1200-1300, Bajra 675-680, Jowar yellow 700-750, white 1250-1300, Maize 780-800 Barley (UP) 1130-1140 a nd Rajasthan 1100-1110.

Spot Rubber Prices Hit Rs 115 A Kg

Kottayam: The domestic rubber made sharp gains on Friday. According to observers, the market appeared to be moving under the control of speculators who were taking advantage of the fundamental and technical position amidst short supply. Major manufacturers were not active above Rs 111.50 a kg but covering groups continued to lift the prices to yearly highs which stood even above the global rates.

In spot RSS 4 flared up to Rs 115 and Rs 115.50 a kg respectively at Kottayam and Kochi from Rs 113 a kg and the market made all round gains on better demand. RSS 3 improved at its May futures to 293.5 Yen (Rs 112.81) a kg from 287.8 Yen at TOCOM. RSS 3 spot firmed up to Rs 113.96 (113.65) a kg at Bangkok.

Futures move up

The rubber futures moved up further on NMCE. The May futures downed the shutters at Rs 116.45 (114.25), June at Rs 115 (113.04), July at Rs 111.30 (110.51) and August futures at Rs 109.30 (108.71) a kg for RSS 4. The volumes were better at 2,820 (2,136) tonnes transacting 1,280 (1,147) tonnes in May, 1,195 (744) tonnes in June 266 (181) tonnes in July and 79 (64) tonnes in August.

Spot prices were (Rs/kg): RSS-4: 115 (113); RSS-5: 113 (111); ungraded: 112 (109.50); ISNR 20: 112.50 (110) and latex 60 per cent: 76.50 (75).

Govt Holding Consultations On Loan Waiver Scheme

New Delhi: The Finance Minister, P. Chidambaram, said on Friday that he would impress upon chief executives of public sector banks, at their meeting on May 1, to continue their “normal lending operations” to debt-distressed farmers, pending finalisation of guidelines for the Rs 60,000-crore loan waiver scheme.

He was responding to supplementaries during the Question Hour in Lok Sabha on the question raised by members Haribhau Rathod and Chinta Mohan on the farm debt waiver and debt relief scheme. The agitated members drew the attention of the Finance Minister to banks’ reluctance to provide fresh loans to farmers (who are beneficiaries of the scheme) in the absence of guidelines from Reserve Bank of India (RBI) to various banks for implementing the loan waiver scheme.

“The guidelines would be finalised in consultation with the RBI and the National Bank for Agriculture and Rural Development (Nabard). I had given myself time of March, April and May to hold consultations to finalise the guidelines. But, let me repeat my assurance already made to this House. By June 30, the loans will be waived,” Chidambaram said.

On a suggestion that the land holding limit for availing of the debt waiver scheme should be raised, Chidambaram said that every suggestion made on the debt waiver and debt relief scheme was under examination. “I can do what is doable and what is affordable,” he said.Meanwhile, in a written answer, Chidambaram said that guidelines which are in the process of being drafted will be issued by the RBI and Nabard to enable completion of implementation of debt waiver scheme by June 30,.

The Finance Minister also said that the suggestions for modifying the scheme broadly relate to varying the land- holding criteria taking into account the irrigation status or productivity; doing away with the land holding criteria; inclusion of those farmers in the scheme who have taken loans from moneylenders; and extension of the debt waiver and debt relief scheme to farmers who have paid their loans in time.

The Government has already set up a farmers’ debt relief fund with initial corpus of Rs 10,000 crore to fund the debt waiver and debt relief scheme.

Wheat Production Likely To Rise 7%

Mumbai: In line with expectation, world wheat production in 2008-09 is forecast to expand 7 per cent to register a new high while dwindling stocks are set to show an upturn as forecast production is likely to exceed forecast consumption by a good margin.

No wonder, the world wheat market has taken cognisance of this positive development as a result of which forward prices have begun to ease rapidly. On the Chicago Board of Trade, wheat futures prices have collapsed given generally improved supply prospect. Speculators have begun to rapidly liquidate their long position.

In its latest grain market report, the London-based International Grains Council (IGC) has forecast global wheat production in 2008-09 at a record 645 million tonnes (mt), up 41 mt from the previous year. This could well be one of the biggest yearly increases in production in recent years.

Consumption, on the other hand, is projected to rise to 630 mt (611mt) because of anticipated increase in food and feed demand encouraged by lower prices. World stocks, according to IGC, may recover to 128 mt (114 mt). Inventory with five major exporting countries is set to rise by 10 mt to 37 mt.

Indian wheat harvest is in full swing and market arrivals are heavy. According to the Agriculture Ministry, the crop size has set a new record of 76.8 mt.

Procurement by the governmental parastatal Food Corporation of India is at a steady pace, raising hopes of meeting and possibly exceeding the 15 million tons target. This has sent a clear signal to the world market that India may not be a buyer of wheat – not until six months from now, in any case.

Theoretically, India can become a wheat exporter this year as there will be price parity. However, given the price sensitivity and political compulsions, wheat export ban is most unlikely to be lifted.

As for maize (corn), world output is likely to trail consumption for the fourth year in a row. Stocks would be further drawn down. IGC has forecast world maize output in 2008-09 at 762 mt (775 mt) and consumption at a new high of 784 mt (774 mt).

While feed demand is expected to stay strong, high maize prices may lead to substitution by other grains and high protein feeds. Continued robust demand for ethanol in the US would mean as much as 20 mt of more corn would be diverted as biofuel feedstock.

Tea Exports May Increase 20 M Kg This Fiscal

Kolkata: India’s tea exports in the current fiscal should increase at least by 20 million kg, according to Aditya Khaitan, Chairman of Indian Tea Association (ITA) and Managing Director of McLeod Russel India Ltd, the world’s largest tea producing company.

Choice before buyers

“There is a global shortfall and the major buyers are looking towards India,” Khaitan told Business Line. With Kenyan crop having suffered in past few months, the countries such as the UK, Pakistan and Egypt, all traditional buyers of the African teas, were now turning to India.

The choice before them was either to pay too high a price at the Mombasa auction or opt for the Indian CTC, he said.

The rupee-US dollar parity rate, however, continued to be a matter of concern. “But then, the overseas demand is buoyant and, it appears, will continue to be so,” Khaitan said, expressing hope that Pakistan’s demand for North India tea would rise, despite the shipment problem.

The demand for orthodox tea too, was likely to increase as the prices in the Colombo auction were high.

No carryover stock

Khaitan, however, was not sure if the orthodox production in India would increase significantly in a situation where the demand for the CTC would be strong.

In 2006 also, the Kenyan tea production was hit by drought but the impact of it was not so much felt in India where there was a surplus crop with substantial carryover stocks. The situation this year was different in the sense India too, was running short with no carryover stock, he said.

The size of crop this year, according to the ITA Chairman, would be too early to estimate right now. The picture would be clear around July-August. “Even in the best of times, India’s production never increased by more than 20 million kg (mkg),” he said pointing out that the demand-supply gap would persist this year even if there was a bumper crop which was unlikely. The March crop in North India failed.

Growing demand

With the domestic demand increasing at three to 3.3 per cent, thus, creating an additional demand of about 30 mkg every year and with no carryover stock, the domestic price of tea too would be on the high side by all indications. It would be at least another three years before increased production, resulting from rejuvenation and replantation programme now in progress, would materialise.

“The producers currently having a judicious mix of export and domestic markets thus, stand to benefit most in the current situation,” he said.

The tea industry, Khaitan said, suffered a lot in the past few years when the prices did not even cover the cost of production. New threshold prices, therefore, are need of the hour.

“Fortunately, the prices are showing signs of firming up, both within the country and outside,” he said. “We in McLeod Russel are fully geared to meet the market demand.”

Move To Ban Oilmeal’s Exports Shelved

Chennai: A proposal by the Animal Husbandry Department, functioning under the Ministry of Agriculture, to ban exports of select oilmeals has been withdrawn. This follows the meeting of the Solvent Extractors’ Association of India representatives with the Union Food and Agriculture Minister, Sharad Pawar.

The Animal Husbandry Department had proposed to the Cabinet to consider ban on oilmeals in view of rising prices of milk, eggs and meat. High prices of oilmeals, linked to exports, were cited as the primary reason for increase in prices of milk, eggs and meat.

The industry representatives, led by the Association of India President, Ashok Sethia, and comprising past presidents, D.P. Khandelia, A.R. Sharma, and its Executive Director, B.V. Mehta, expressed concern over the move. They explained to Pawar that the industry would lose export markets that had been carefully built over the years.

Farmers would equally be affected the move, they said and also pointed out to the fact that nearly 15 lakh tonnes of oils were recovered by the solvent extraction process. Ban on exports would hit processing of oilcakes and rice bran and thus, oil production would go down.

In turn, this would result in higher prices of vegetable oils besides realising lower prices to farmers and discouraging them from cultivating oilseeds, the representatives told Pawar.

The team also urged Pawar to review the decision to ban export of cooking oils since hardly 10,000-15,000 tonnes were being imported. It had no impact on the supply or demand or the price of edible oils. The Minister had assured the representatives that the Centre would re-examine ban on export of oils in small packets.

T. Nandakumar, Secretary of the Department of Food and Public Distribution, was present during the talks, a release from the association said.

Tobacco Prices Touch Record Rs 110 A Kg

Guntur: Tobacco prices are continuing to rule high in the Andhra Pradesh auctions. For the first time, Virginia tobacco fetched a record Rs 110.40 a kg on Thursday on the Koyyalagudem auction floor in West Godavari district. The district produces the best tobacco in the State.

Average price

So far, 94.5 million kgs of tobacco has been sold on the auction floors in the State at an average price of Rs 77.25 a kg as against last year’s average price of Rs 47.50 a kg by this time. Still, roughly 60 million kgs of tobacco remains to be sold in the State. According to rough estimates, the farmers have got an incremental income of Rs 285 crore more this year than the same time last year.

Admitting that the farmers are getting very good prices this season, Dr Y. Sivaji, President of the Andhra Pradesh Virginia Tobacco Growers’ Association, said that certain factors in the international market triggered the price rise on the auction floor. “The drastic slump in production in Zimbabwe from a level of 250 million kgs to 60 milion kgs, due to racial unrest in that country, is one of the major factors for the price rise. There has been production slump in Brazil by 70 million kgs or so and besides that China is no longer able to dump in the international market at lesser prices, as it has joined the WTO. There are no carryover stocks in India or anywhere else in the world,” he said.

Plea to growers

Dr Sivaji, however, cautioned the farmers in the State to be wary of the “designs of the trade to effect a price correction in the State.

The trade is attempting to depress prices by forming into syndicates and imposing a ceiling price. Such attempts should be foiled by farmers and they should get an average price of $2 a kg on the floors.

They should not part with the crop, if they do not realise the price”.

On the floors in the southern lights soils and southern black soils, he alleged, “the trade is up to its old tricks.” He also cautioned farmers that they should not go in for surplus production, encouraged by the high prices. The reduction of punitive cess for the current year’s surplus from Rs 2 a kg plus 15 per cent of the value to Rs 1 a kg plus 5 per cent of the value was not a correct move, he said.

Dr Sivaji, however, expressed happiness that he could realise the long-cherished dream of securing $2 a kg to the Indian tobacco farmer this season.

Biovet Sets Up Unit To Produce Vaccines For Farm Animals

Bangalore: Biovet, an integrated biotechnology company focussing on animal health, on Wednesday announced the commissioning of Asia’s first Bio-Safety Level 4 (BSL-4) manufacturing facility.

The facility is designed for the manufacturing of vaccines for animals for the foot and mouth (FMD) disease and TB vaccines for sheep and goats.

The facility located in Malur in Karnataka is promoted as a separate company by the Chairman and Managing Director of Bharat Biotech International, Hyderabad.

Announcing this here at a press conference, Dr Krishna Ella, Chairman of Biovet, said the company had invested Rs 190 crore for the two-phased production programme of FMD vaccine and TB vaccine.

Dr Krishna said: “Biovet’s goal is to address the significant gap in the application of latest technologies by providing healthcare solutions for small and large animals.”

FMD had caused meat and dairy loss of $5 billion last year.

Set up with assistance from the Technology Development Board of Science and Technology Ministry ICICI Technology Development Fund and State Bank of India, Biovet will initially produce 60 million dosages per annum to supply to the FMD control programme launched by the Government to eradicate the disease and help farmers achieve stable income, Dr Ella said.

Dr Ella said Biovet will scale up the FMD prevention vaccine capacity to 200 million dosages per annum in five years and launch the production of animal TB vaccine in two years.

The FMD vaccine will be available during 2008-09.

Spot Rubber Gains On Global Cues

Kottayam: Rubber prices remained bullish on Thursday. In the physical front, RSS 4 firmed up to Rs 113 from Rs 112.50 a kg at Kottayam and Kochi as the domestic and international rubber futures ended in a positive note. The trend was mixed as RSS 5 and ISNR 20 closed flat amidst narrow volumes. The May futures for RSS 3 improved to ¥287.8 (Rs 111.40) from ¥285 a kg at TOCOM. The grade closed at 113.65 (113.38) a kg at Bangkok.

Futures gain

On NMCE, the May futures moved up sharply to Rs 114 (111.94), June to Rs 113.15 (110.95), July to Rs 110.26 (109) and August to Rs 108.98 (107.37) a kg for RSS 4.The open interest stood at 3,703 (3,482) tonnes with 1,965 (1,867) tonnes in May, 1,068 (1,006) tonnes in June, 545 (514) tonnes in July and 125 (95) tonnes in August. The volumes rose to 2,136 (1,615) lots trading 1,147 (934) lots in May, 744 (469) lots in June 181 (164) lots in July and 64 (48) lots in August.

Spot prices were (Rs/kg): RSS-4: 113 (112.50); RSS-5: 111 (111); ungraded: 109.50 (109); ISNR 20: 110 (110) and latex 60 per cent: 75 (75).

Agri Varsities, Banks Should Work In Tandem

Mangalore: V. Leeladhar, Deputy Governor of Reserve Bank of India, has said that if villagers, agricultural universities and the banks worked with a single focus, it would bring about overall development of villages and the entire country.

Inaugurating ‘Corp Grameen Vikas Kendra’ – the branchless banking initiative of Corporation Bank – at S. Nagenahalli village in Dodballapur taluk near Bangalore on Wednesday, he complimented the bank for taking the initiative in providing entire range of banking services at the doorsteps of the villagers without there being a need for them to visit the branch.

A bank release said here that as a part of financial inclusion project, the bank has surveyed nearly 1,200 villages and about a lakh no-frill savings accounts have been opened in these villages. The bank is striving to use technology to the benefit of people of remotest villages through smart cards and branchless banking model.

B. Sambamurthy, Chairman and Managing Director of the bank, K.P. Rao, General Manager of the bank, and H.R. Khan, Executive Director of Reserve Bank of India, were present on the occasion.

Vanaspati Imports From Lanka Capped

New Delhi: In a relief for domestic producers of vanaspati (vegetable fats), the Centre has now stipulated that the total quantum of import of vegetable fats under the Indo-Sri Lanka Free Trade Agreement (FTA) would be restricted to 2.5 lakh tonnes a year.

Besides bringing vanaspati and margarine imports from Sri Lanka under a quota system (insisting on Tariff Rate Quota certificate), the Director General of Foreign Trade (DGFT) has also placed port restrictions on their imports into the country.

It has also now been specified that the import quota of 2.5 lakh tonnes would be allocated by the Sri Lanka Government in four equal quarterly tranche. Import quota of one quota will not be allowed to be carried out to the next quarter.

Under the new procedure for vanaspati imports, the ports through which imports will be allowed are Mumbai, JNPT/Nhava Sheva, Kandla, Chennai, Cochin, Tuticorin, Visakhapatnam, Kolkata, Haldia, Kakinada, New Mangalore, Mormugoa and Mundra. Imports will also be allowed through inland container depots (ICDs) in Tughlakabad, Ludhiana, Ahmedabad, Kanpur, Indore and Faridabad.

The India-Sri Lanka FTA was signed on December 28,1998 and implemented from March 2000. Under the FTA, zero duty entry of Sri Lankan goods were allowed since March 2003 except for items kept in sensitive/negative list. The balance of trade continues to be in India’s favour, with the country’s exports to Sri Lanka during April-December 2007 at Rs 1,916.13 crore and imports from Sri Lanka in the same period at Rs 330.52 crore.

Barley Futures Hit Upper Circuit

Mumbai: Investors in the commodity futures market seem to keeping their fingers crossed even as the Abhijit Sen Committee draft report has ruled out futures trading impacting spot prices. Waning investor interest in trading was well evident from the fact that MCX turnover fell 11 per cent to Rs 3,935 crore up to 5 pm, while on NCXDEX it dipped by 22 per cent to Rs 1,397 crore on Wednesday.

Barley futures on NCDEX hit the upper circuit of 2.49 per cent at Rs 1,118 per quintal on strong demand in the spot markets. Guarseed was up 1.75 per cent to Rs 603 per quintal. Jeera moved up 1.38 per cent to Rs 9,226 per quintal on unconfirmed news of possible damage to corps due to heavy rainfall in Turkey, one of the largest jeera producing countries.

Pepper recovers

Pepper recovered 0.88 per cent to Rs 14,330 per quintal on short covering. Mustardseed rose 0.83 per cent to Rs 522 per quintal on fresh buying interest. Tracking the firm international sentiments, soy oil gained 0.75 per cent to Rs 563 per 20 kg.

Turmeric for May delivery tumbled to the lower circuit of 2.66 per cent at Rs 3,151 per quintal on improved arrivals in the spot markets. Chilli fell to its lower circuit of 2.31 per cent at Rs 4,988 per quintal due to weak sentiment in the Guntur spot market.

Atta Prices May Rise As Mills Find It Hard To Get Wheat

Chennai: Atta (flour) prices are likely to increase as flour mills are finding it difficult to get wheat transported to their gates at competitive prices. This is mainly in view of the Railways’ decision to stop allocation of wagons for transporting wheat from the growing areas by the private trade.

The mills have now to depend on roadways to transport wheat but it is turning out to be a costly affair.

“All over India, the private trade is not allocated wagon and railways are allocating wagons for moving wheat purchased by the Food Corporation of India (FCI) for buffer stocks,” said K.S. Kamalakannan, President of Tamil Nadu Roller Flour Mills Association.

“The Railways have not published or announced the decision to not allocate wagons for wheat to private trade. It seems to have been done through an internal circular,” he said.

On Tuesday, the Railways Minister, Lalu Prasad, told the Rajya Sabha that Railways would not transport wheat for the private trade.

“Usually, the Railways does not transport wheat procured by the private trade in Haryana and Punjab during this period of the year. But this time, we are not able to transport it from other parts of the country such as Madhya Pradesh, Rajasthan, Gujarat and Uttar Pradesh,” said M.V. Balasubramaniam of the Salem-based Narasu’s Flour Mills.

Civil restrictions

Trade sources said “Civil restrictions” have been clamped, a move that has been resorted to after 1961.

“We are facing a lot of hardship in view of the Railways’ decision. If we want to move wheat from, say, Tuticorin to Salem, we can’t. One wagon of wheat helps us meet demand for 20 days. But now, we are not able to plan our production,” he said.

If moving wheat by railway wagon costs Rs 1,350 a tonne, transporting the grain by road costs Rs 2,350 a tonne.

“The additional cost will have to be borne by the consumer and it means further inflation” said Balasubramaniam.

By rail, mills can get 2,500 tonnes through wagons, while by road, they will be able to transport only nine tonnes in a lorry.

The Centre is trying to mop up as much wheat as possible for buffer stocks as part of its measures to combat soaring inflation. It has set a procurement target of 150 lakh tonnes this year but going by current trends, it is likely to end up procuring at least 170 lakh tonnes.

Like an ‘emergency’

Flour millers say the current situation reminds them of an “emergency” or a “war-like situation”. “The problem is that some of us have moved wheat to the rail heads. From there, we are unable to move in view of the sudden embargo on private trade,” said Kamalakannan.

Worst hit by the Railways’ move could be consumers of wheat in Kerala and Tamil Nadu. “Mills in Karnataka and Andhra Pradesh can to an extent manage by getting wheat through roadways,” Balasubramaniam said.

“We are moving wheat to our mills by roadways, though our overhead costs are increasing,” said Pramod Kumar, President of the Karnataka Roller Flour Mills.

Price quotes

With global wheat prices ruling high, imports by private trade, allowed at zero customs duty, is out of question. Though prices have crashed this week, they are still higher than domestic prices.

On Wednesday, wheat (dara) was quoted at Rs 1,045-1,090 a quintal in New Delhi. The price quoted is Rs 10-30 lower than on Tuesday. Last year, prices were at least Rs 100 lower during the same time. However, the minimum support price for wheat last year was Rs 850 a quintal and this year, it has been raised to Rs 1,000 a quintal.

“If the Centre is keen to ensure steady prices for wheat in the open market, it should revive the Open Market Sale Scheme and allocate at least 50 lakh tonnes for it,” said Kumar.

Spot Rubber Firms Up Further

Kottayam: Spot rubber rates firmed up further on Wednesday. RSS 4 closed at Rs 112.50 against Rs 112 a kg at Kottayam and Kochi as covering groups turned active followed by another better closing in global futures. The domestic supply concerns kept the buyers on alert but the volumes were low lacking quantity sellers, sources said. RSS 3 was steady at Rs 113.38 a kg at Bangkok.

Futures mixed

The rubber futures showed a mixed mood on NMCE. The May futures finished at Rs 111.98 (111.73), June futures at Rs 110.98 (111.18), July at Rs 109 (108.92) and August at Rs 107.40 (107.13) a kg for RSS 4. The open interest slipped to 3,482 (3,523) tonnes with 1,867 (1,981) tonnes in May, 1,006 (1,026) tonnes in June, 514 (443) tonnes in July and 95 (73) tonnes in August. The volumes improved to 1,615 (1,303) tonnes.

Spot prices were (Rs/kg): RSS-4: 112.50 (112); RSS-5: 111 (109.50); ungraded: 109 (108); ISNR 20: 110 (108.50) and latex 60 per cent: 75 (74.50).

Scrapping Of Wheat Tender: Transparency Needed

Mumbai: The tender for wheat floated by National Collateral Management Services (NCMSL) has been scrapped after four multinational suppliers responded. The decision to pass over is attributed to high strike price and high premium quoted by the tender participants.

The prices ranged between the low of $380 and high of $471 a tonne, while the premium was in the $30.0-37.5 a tonne range.

Suppliers are upset with the cancellation of the tender and may turn wary in future. In the international market, it is seen as a fishing expedition by India, something that does little to enhance the country’s image.

At this rate, India could become a laughing stock of the world, a trader remarked. It is not the first time that a tender was scrapped. It happened last year too; and subsequently the country paid a heavy price for importing wheat.

NCMSL tender

It is unclear what prompted the agency NCMSL to float the tender in the first place when procurement is going on at full swing; and what actually changed in the last three days to force the scrapping of the tender. Because the entire exercise involves public money, the Government is duty bound to ensure openness.

A good deal of secrecy seems to be shrouding the tender process, so much so that it was mentioned even STC on whose behalf the tender is sought to be floated was unaware of the developments.

Some independent observers described the whole development as a ham-handed attempt by India to stay in the market for supplies but without genuine desire to buy.

Call option route

The call option route could turn out to be wasteful exercise if actual wheat output is anywhere close to the Agriculture Ministry’s estimate of 75 million tonnes. Already, the Government has placed a number of roadblocks to prevent the private sector from buying wheat. There are formal and informal impediments.

Despite all this, if Food Corporation of India fails to reach the procurement target of 15 million tonnes, there is a reason to suspect something is seriously wrong with the Government policies and approach to procurement.

Given the current pace of arrivals and FCI purchases, it would make commercial sense to wait until mid-May to review the quantum of arrivals and procurement and then take a decision whether or not to import; and in what quantities.

If a need arises, the Government can make forward purchases for shipment in September and beyond. At least, at this point of time, forward prices are softening in the wake of considerably improved world crop prospects. A close watch on the developments in the world wheat market and within the country is necessary.

As regards India’s wheat purchase policy, a serious review at the highest level in the Government is imperative to ensure decisions are taken in a transparent manner in the best interest of the country.

It is believed that another tender will be floated early next week. What fate befalls it remains to be seen.

Food Grains Output Likely To Touch Record High

New Delhi: Supported by factors such as favourable weather, foodgrains production in the country will touch a record high of 227.32 million tonnes (mt) this season (July 2007 – June 2008), up 4.6 per cent from the 2006-07, the Union Agriculture Secretary, P.K. Mishra, said on Tuesday.

Drop in temperature

“Wheat production is estimated to be an all time record at 76.78 mt during 2007-08,” he said.

“Favourable weather, good monsoons and temperature drop in the rabi season has helped attain the high production levels,” Mishra said, releasing the third Advance Estimates of production of major crops grown in the country.

Several other crops such as rice (95.68 mt), maize (18.54 mt), pulses (15.19 mt) comprising tur (3.03 mt) and urad (1.56 mt) are also expected to achieve a record high in 2007-08.

“We have arrived at these figures due to availability of more crop cutting data,” Mishra said, asked about the upward revision of the estimates.

Soya, cotton

Soyabean (9.43 mt) and cotton production (23.19 million bales of 170 kg each) is also expected to be touch an all-time high.

Oilseeds production is estimated to increase by about 4 million tonnes (mainly contributed by groundnut) and cotton by about 6 lakh bales during 2007-08 over 2006-07.

“Wheat acreage is almost same as last year, but the yield has gone up,” Mishra said.

“Distribution of good quality seeds under Government schemes like National Food Security Mission also helped,” he said.

On whether the higher production figures would impact the import requirements, Mishra declined to comment saying that these decisions would be taken by inter-departmental consultations.

Sour note

There could be a 13 per cent drop in rapeseed and mustard production (at 6.43 mt), while sugarcane production would be down by 3.2 per cent touching 344.23 mt.

Jeera Futures Decline On Profit Taking

Mumbai: Mustard seed futures gained 3.68 per cent to Rs 519 per 20 kg on short covering after the recent fall coupled with emergence of buying interest at lower levels. Barley was up by 1.96 per cent to Rs 1,101 per quintal on good demand in the spot markets amidst arrival pressure.

Chana recovered 2.07 per cent to Rs 2,570 per quintal as arrivals fell sharply in spot markets on fear raids being carried out by the Government.

Soya up

Soyabean and soya oil futures went up 1.49 per cent and 1.35 per cent to Rs 2,180 per quintal and Rs 559 per 20 kg respectively on short covering and firm international markets.

Chilli down

Chilli lost 1.52 per cent on account of increasing selling pressure on higher arrivals in the market. Turmeric tumbled 1.4 per cent to Rs 3,232 per quintal on weak sentiment in the spot market. Jeera fell 0.73 per cent to Rs 9,105 per quintal on profit taking after the recent rally.

Cardamom on MCX traded firm at Rs 632 per one kg, up 1.36 per cent on account of restricted supply and moderate demand. Mentha oil closed on negative note at 446 per one kg, down 0.65 per cent tracking weak sentiment in the physical market coupled with lack of demand in anticipation of a bumper crop.

MCX recorded a turnover of Rs 4,402 crore up to 5 pm while it was Rs 1,800 crore in NCDEX on Tuesday.

Spot Rubber Steady

Kottayam: Spot rubber was steady on Tuesday. The market turned slightly weak on early trades following declines in international indices but regained strength towards close lacking sellers in the main marketing centres.

On NMCE, the May futures improved to Rs 111.84 (111.48) a kg while the June futures finished slightly lower at Rs 111.17 (111.31), July at Rs 109.00 (109.40) and August at Rs 107 (107.03) a kg for RSS 4. Spot prices were (Rs/kg): RSS-4: 112 (112); RSS-5: 109.50 (109.50); ungraded: 108 (108); ISNR 20: 108.50 (108.50) and latex 60 per cent: 74.50 (74).

Coonoor Tea Prices Gain On Quality

Coonoor: Prices rose Rs 2 a kg on the average at the auctions of the Coonoor Tea Trade Association (CTTA) here last week despite the volume of 11.31 lakh kg being 23-week high as the demand followed quality offer.

For the third consecutive week, Homedale Estate ruled in the Rs 100-plus bracket among the CTC teas from bought-leaf factories.

Its RD grade sold by Global Tea Brokers fetched Rs 106 a kg.

This was the highest price fetched by any CTC tea – leaf or dust – among the bought-leaf factories last week.

Darmona Estate was the only other brand in the Rs 100-plus category.

Its RD grade, sold by J. Thomas and Co fetched Rs 104 a kg. Greenview Estate got Rs 85, Kannavarai Rs 83, Kotagiri Estate, Hittakkal Estate, Ella Estate and Vigneshwar Estate got Rs 82, Professor and Highfield Estate Special Rs 81.

Corporate sector

Among the orthodox teas from corporate sector, Mailoor got Rs 126 a kg, Chamraj, Tiger Hill and Colacumby Rs 110, Prammas Rs 104, Havukal Rs 102 and Kodanaad Rs 100.

“High-priced CTC dusts were dearer up to Rs 5 a kg. Medium and plainer teas gained a rupee. Finer orthodox dusts got Rs 2 a kg more. CTC leaf fetched Rs 1-2 more. Better mediums were dearer by a rupee. But, browner CTC leaf sorts suffered withdrawals. Whole leaf orthodox eased a rupee” an auctioneer told Business Line.

Exports

On the export front, Pakistan operated on the blacker sorts. Egypt selected plainer and medium CTC teas. CIS and Poland were seen scouting for bolder grades.

Quotations held by the brokers indicated bids ranging from Rs 45-47 a kg for the plain leaf grades and Rs 62-77 for the brighter liquoring sorts. They ranged Rs 48-50 for the plain dust grades and Rs 62-80 for the brighter liquoring teas.

Spot Rubber Prices Rise Further

Kottayam: Physical rubber prices posted moderate gains on Monday. Covering groups and purchase agents continued to procure the raw material as major manufacturers were buyers on sheet rubber up to Rs 110.50 a kg during the previous week. The grade moved up to Rs 112 from Rs 111 a kg both at Kottayam and Kochi amidst low arrivals.

North Indian buyers were also seen active in the main marketing centres lifting RSS 5 and ISNR 20 to further highs, sources said. The May futures for RSS 3 closed at ¥286.9 (Rs 110.07) against ¥286.2 a kg at TOCOM. Its spot improved by 39 paise to Rs 113.93 a kg at Bangkok.

Futures firm

RSS 4 firmed up marginally at its May futures to Rs 111.26 (111.00) and June to Rs 111.20 (110.89) a kg while its July futures slipped to Rs 109.30 (109.69) and August to Rs 107.05 (107.76) a kg on NMCE. The open interest was 3,404 (3,281) tonnes with 1,899 (1,899) tonnes in May, 978 (882) tonnes in June, 458 (444) tonnes in July and 69 (56) tonnes in August. The volumes totalled 1,599 (1,141) tonnes.

Spot prices were (Rs/kg): RSS-4: 112 (111); RSS-5: 109.50 (108.50); ungraded: 108 (107); ISNR 20: 108.50 (107.50) and latex 60 per cent: 74 (72.50).

India Consolidates Its Position As 2nd Biggest Cotton Grower

Chennai: For the second year in succession, India will be second-largest producer, user and exporter of cotton. Last season (August 2006 –July 2007), India had overtaken the US to emerge as second-largest producer of cotton, after China. And if one goes by the projection of Cotlook, India is likely to be the number two for the third year the next season.

This season, with US cotton growers shifting to other crops such as corn, India has emerged as a firm number 2 producer of the natural fibre. Last year, India produced 4.746 million tonnes (279 lakh bales of 170 kg), while the US production was 4.7 million tonnes (mt). This year, the Indian production has been pegged at 5.34 mt (313.76 lakh bales) against the US output of 4.14 mt.

According to Cotlook’s estimates, production next season is likely to be 330 lakh bales or 5.61 mt in India, whilst that of the US is seen declining further to 3.19 mt.

Better prices

Indian production is seen up in view of better prices for growers during the last couple of years and increasing use of Bt cotton, which now makes up over 65 per cent of the total area under cotton. Production in the US and other growing countries, on the other hand, is estimated lower in view growers shifting to soyabeans, corn and wheat.

China continues to be the number one in production, consumption and imports. This is despite a fall of over one lakh tonnes in production from last year. Beijing is estimated to produce 7.62 mt cotton this season against last year’s 7.72 mt. Cotlook sees production rebounding to 7.65 mt next season.

On the exports front, shipments from the country this year are projected at 1.33 mt (78 lakh bales) against 1.09 mt (59 lakh bales). The US continues to be the largest exporter, shipping out 3.15 mt cotton (2.83 mt).

China and India clearly lead the pack on the consumption front. In fact, higher consumption by China sees it being the top importer despite being the largest producer. Imports by China are seen at 2.72 mt against 2.30 mt last year. In fact, Pakistan has emerged as the third largest cotton importer after Turkey. It will import 0.71 mt cotton against 0.5 mt last season.

Consumption

China’s cotton consumption, on the other hand, is projected to increase to 11.54 mt against 10.88 mt last year. Indian consumption is seen at 3.94 mt, the same as last year.

The ending or carryover stocks this season are seen topping 1.75 mt (100 lakh bales) against 1.63 mt (90 lakh bales). In contrast, the ending stocks are estimated lower in China at 3.62 mt (4.07 mt last season) and the US at 2.04 mt (2.06 mt).

Despite higher ending stocks in the country, there should be no cause for worry since global ending stocks are projected lower at 12.88 mt (13.32 mt).

In fact, Cotlook has pruned its cotton production estimates for 2008-09 season by 0.357 mt. This is because production in China is now estimated at 7.65 mt against 7.75 mt, while in the US, it is seen at 3.12 mt against 3.197 mt.

In view of the pruning, global production is projected at 26.31 mt against 26.42 mt made last month. The output, however, is likely to be higher than this season’s 26.03 mt.

Cotlook said the global sub-prime crisis continued to take toll on consumption prospects. But the net drawdown from the stocks was likely to be higher and over one mt of cotton would be wiped off the global balance sheet in view of the pruned estimated.

The agency sees India’s consumption rising to 7.31 mt against 7.13 mt this season.

Meanwhile, the US Department of Agriculture said consumption this season was seen up 1.4 per cent globally.

It said use by spinning mills in China, India, Pakistan and Turkey had increased sharply over the years.

China and India alone account for 57 per cent of the global cotton consumption, it said. The US agency also projected stock depletion of 2.5 per cent, which is seen keeping the prices firm in the short to medium-term.

Four International Cos Submit Price Quotes For Wheat Supply

Mumbai: Four multinational corporations with offices in India – Cargill, Louis Dreyfus, A.C. Toepfer and Glencore – have put in their price quotes for supplying wheat to India.

The tenders, which were submitted in response to the Indian Government’s announcement to buy wheat on call option basis, may be opened on Tuesday; but from the line-up it is increasingly clear who the winner would be. While Cargill has offered a maximum of 2.7 lakh tonnes, the other three have offered 2.5 lakh tonnes each.

The Government may contract for a lower quantity of 1.8 lakh tonnes, it is believed.

According to sources close to the deal, the strike prices quoted by both Louis Dreyfus and A.C. Toepfer are above $400 a tonne with a premium of $35.0-37.5 a tonne. Cargill has quoted $407 plus premium of $30 for delivery at Kandla and $399 plus premium of $30 for delivery at Mundhra.

From available information, Glencore appears to have quoted the most competitive price of $380 a tonne with a premium of $35 a tonne for Mundhra and $393 a tonne plus $35 for Kandla.

The offers are for delivery of cargo at Kandla and/or Mundhra ports in Gujarat. The option to seek delivery is to be exercised on or before August 16. The goods will have to arrive at the Indian port before November 1, that is within 75 days from the date of the exercise of call option. If the call option is not exercised by August 16 and India does not want to take delivery, the overseas supplier will have to be paid the premium amount.

Prospects improve

With improvement in world wheat production prospects for 2008-09, forward prices have begun to soften. Overseas suppliers invariably add a risk premium to the price while dealing with India. The good news on the home front is that wheat procurement by the Food Corporation of India (FCI) has already touched 6 million tonnes. Almost 100 per cent of arrivals in Punjab and close to 90 per cent of arrivals in Haryana have been mopped by the Government parastatal. At this rate, FCI would comfortably meet the procurement target of 15 million tonnes, it is believed. Even as the Government is trying to import, wheat prices on Chicago Board of Trade have crashed.

Palm Oil May Test Support Level

Malaysian palm oil futures ended lower on Friday, on profit-taking and prospects of higher output combined with the strengthening of the ringgit against the dollar. The Malaysian Palm Oil Board is expected to revise upwards its output forecast for 2008 to 16.7 million tonnes from an earlier projection of 16.2 million tonnes.

Malaysia produced 15.8 million tonnes of palm oil in 2007. Subsidies for lower income households in India for imported palm oil could dampen sentiment among private importers, which could hurt anticipated robust demand from India due to recent duty cuts.

CPO active contract pulled up higher, but failed to garner enough momentum to push forward. Supports are now at 3495-3510 Malaysian ringgit (MYR) tonne levels. Failure to hold support here could take prices even lower towards 3375 or 3275 MYR/tonne levels now.

Despite the break of 3650 MYR/tonne, we still remain a bit apprehensive of any major bullishness to set in into the edible complex. The grains complex--wheat, has technically shown clear bearishness now and the energy complex is also vulnerable for a good profit taking, after its recent run up. The wave counts need a complete re-look, as the present move has altered most of the big picture counts we have been tracking so far.

A new impulse began from 1427 MYR/tonne and this could be the third wave which has not ended so far. We can expect a corrective fourth wave in the form of A-B-C to have begun now. RSI is in the neutral zone now, indicating that it is neither overbought nor oversold.

The averages in MACD are above the zero line in the indicator indicating bullishness to be intact. Therefore, look for palm oil futures to test the support levels now.

Supports are at MYR 3495, 3370 and 3275. Resistances are at MYR 3595, 3650 and 3700.

Short-Term Weakness In Gold Likely

Chennai: A rising dollar and an upbeat US stock market have forced gold to pare its gains sharply during the last week. In fact, the yellow metal shed 3 per cent on Friday, to close at $915.20 an ounce for June contracts. Spot gold closed just a dollar more.

The dollar is in for a rebound, an eventuality that has not been discounted by the bulls in the precious metals counter. There are fears that investors, who found safe haven in gold, could now switchover to the equities market. This means, interest for investment in gold could wane. In turn, we are likely to see some short-term weakness in gold.

Crucial support

Technically, too, gold has slid below what was seen as secondary resistance of $921 an ounce. Last week, gold scaled to $952 an ounce. But what has happened ever since, gold touched a record high every time it tried to rise, the bulls haven’t been able to go much far ahead. The highs have always been lower than the previous one.

Though charts show that gold has been oversold, the situation is likely to continue for some more time, till the yellow metal finds a right support. Therefore, gold looks vulnerable to a fall in the short term. However, $907 is now seen a crucial support and below this, gold could decline below $900.

This weakness in gold is also due to factors apart from the currency and equity markets. One reason for the fall is falling physical demand. The high prices have resulted in reduced demand for jewellery, particularly in key consuming nations such as India, China and West Asia. The open positions too have come off to around 4.3 lakh from a record 5.93 lakh during the middle of January.

Gold prospects

In the non-commercial open positions, large speculators are holding 48 per cent, while commercially commercial hedgers are holding 71 per cent of the open positions. But if the equities market gains as also the dollar, the long-term prospects for gold look bright. If Friday’s rebound in the dollar and equities in the US is true, then the long-term prospect for gold is bullish. A growth in the US economy holds possibilities for inflation and that, in turn, could lead to demand for gold.

Gold prospects look good even if the US economy is to be caught in recession. Charts too are bullish in the long term. Indications are bright for a pull back. Therefore, strategy for investors is to buy at dips, possibly once the price goes below $900. According to Angel Commodities, gold has firm support around $865 levels. In the domestic futures market, it sees support for MCX June contracts at Rs 11,700/11,550. Resistances are at Rs 12,450/12,880 for 10 gram.

White metal

Silver, too, is likely to toe gold’s line. Like gold, the white metal is also seen choppy. Angel sees support for the white metal at $16.30 an ounce. Domestic futures could see support for May silver contracts at Rs 22,800/22,400 and resistance at Rs 24,570/25,120 a kg.

Crude looks to rule firm with hopes for rebound in the US economy. Already, it has hit a high of $117 a barrel, but the upside looks limited. Coal’s fall could continue. Base metals are likely to witness volatility, caught between growth and investors trying to book profits. With various governments now expressing concern over food security, there is all likelihood of agricultural commodities witnessing further pressure and declining to reasonable levels.

Jute Futures On MCX Set For Correction

Mumbai: The jute futures on MCX, which rallied for the past few weeks on lower production estimates, are all set for a correction. In the last ten days, jute for June delivery on MCX has rallied from Rs 1,562 to Rs 1,621 a quintal on Saturday.

“Although the overall bullish trend remains, prices are likely to take some correction due to lack of buying support at higher levels,” said Veeresh Hiremath, research analyst, Karvy Commodities.

Prices may come down by Rs 50-60 in the futures trade due to long liquidation before the near-month contract expires on April 30, he said. Currently spot prices are quoting around Rs 1,400 (TD-4) in spot markets of West Bengal.

According to trade estimates, output is likely to come down to 75-80 lakh bales (180 kgs a bale) from 103.49 bales logged last year. Carry forward stocks are likely to be around 20-22 lakh bales by end of season. The area under jute cultivation is lagging as farmers have shifted to other commercial crops, said an analyst.

Government increased minimum support price (MSP) for Jute (TD 5) to Rs 1,250 a bale for 2008-09 effective from July 2008.

Usually, sowing is done between February and April. Depending on the rainfall, harvest starts in June and continues till September. For getting a good combination of fibre quality and yield, about 120 days after sowing is found to be the optimum time for harvesting. Sowing in the eastern region is almost complete.

Jute is the most important cash crop, industrial raw material and the biggest foreign exchange earner in India and Bangladesh. It is among the least expensive and most versatile of textile annual fibre crop.

Jeera may gain

The concerns over crop damage in Syria and Turkey — major jeera producers — may push up jeera futures on NCDEX further. Forecast of strong wind coupled with heavy rainfall in parts of Rajasthan may damage the crop, particularly at the harvesting stage.

In the last one week, the May contract on NCDEX has gained Rs 173 to Rs 8,817 a quintal on Friday. Similarly, the July delivery moved up by Rs 113 to Rs 9,051 in the same period.

Arrivals in the Unjha spot markets have slowed down in last few days to 16,000 bags from 20,000 bags earlier. It will fall further as farmers have adopted a wait-and-watch policy with the recent Syria development, said a trader. “Buy futures at Rs 8,700 with a target of Rs 9,086,” said Ventura Commodities Ltd.

Nilgiri Lilium Growers Suffer Price Crash

Coonoor: With more and more areas coming under lilium cultivation in the Nilgiris without matching marketing support, growers are complaining of glut-induced price crash.

“Farmers entering into floriculture or those expanding their areas should select their crops wisely and not allow to be led away by the sweet talk of agents interested in selling their planting materials without looking into the farmers’ profitability. The market is facing a glut of unwanted flowers and colours, leading to a price crash. Export is taking place only at low prices”, said D.V.M. Prem Kumar, President, Nilgiri Flower Growers’ Association (NFGA). Peak and lean season Presently, 50,000 stems of lilium are produced daily, but even during the peak market season, lasting for five months from October, the requirement is only 25,000-30,000 stems. In the current 7-month lean season, which began in March, the market requirement is only 5,000-10,000 stems, he said. During the peak season, lilium fetches Rs 15-20 a stem, but now, the price has crashed to Rs 5-10 as there are no takers for the excess supplies, he added. But, the cost of each planting material – bulb – is Rs 11-13 and the cultivation, maintenance costs and administrative costs are to be added to arrive at total production cost. Imports

As per the Plant Quarantine Act, lilium bulbs can be imported only by the actual growers and not traders. The green house of the farmers must be certified as quarantine area by the Tamil Nadu Agricultural University. “But, traders are selling bulbs in the Nilgiris. If the growers don’t have quarantine certificate, they run the risk of their total crop being destroyed by the authorities”, Prem Kumar said. He requested farmers to use drip irrigation and follow good agricultural practices.

Orthodox Teas Firm To Dearer In N. Indian Sale

Kolkata: The CTC leaf and dust teas in North Indian auction centres at Kolkata, Siliguri and Guwahati met with strong enquiry from local and internal dealers and sold readily at considerable premiums over the corresponding sale of the previous year, according to J. Thomas & Company Pvt Ltd.

The major blenders were quiet.

Plainer sorts

In the orthodox sale, whole leaf, larger brokens and fannings were firm to dearer while smaller brokens were irregularly lower.

West Asia and CIS shippers were active while local dealers operated on smaller grades.

Darjeeling

The small weight of Darjeeling teas on offer sold well following quality with only the plainer sorts easing in value.

Traditional exporters and local dealers were the mainstay of the market.

Crop

Tea Board, shows that the production at 1.3 million kg was lower by 0.3 million kg compared to the previous year.

During the period, the South Indian crop at 16.4 million kg was ahead by three million kg compared to last year.

International

The Mombasa auction this week saw strong demand with all sorts appreciating sharply. Pakistan, Afghanistan, Egypt, Somalia, West Asia, Kazakhstan, Russia and Sudan showed strong interest. There was no sale in Colombo this week.

Spot Rubber Stays Steady

Kottayam: Spot rubber rates were almost steady on Friday. RSS 4, the only loser of the day shed 50 paise to close at Rs 110.50 a kg followed by moderate selling from certain dealers at higher levels.

According to observers a major tyre manufacturer was buyer on the grade at the quoted level. The volumes were better. In the international scene RSS 3 slipped at its May futures to ¥286.2 (Rs 110.26) from ¥286.6 a kg at TOCOM.

Futures closed

The futures markets remained closed on account of Mahavir Jayanthi on National Multi-Commodity Exchange (NMCE). The markets would resume trading on Saturday. The absence of domestic futures kept the physical market slightly under pressure, an analyst said.

Spot prices were (Rs/kg): RSS-4: 110.50 (111); RSS-5: 108.50 (108.50); ungraded: 106.50 (106.50); ISNR 20: 107 (107) and latex 60 per cent: 72.50 (72.50).

Import Of Refined Edible Oils A Safer Option

Mumbai: As part of its ongoing exercise to contain inflation and augment supplies of essential food items, the Centre has decided to import up to 10 lakh tonnes of edible oils for supply through the public distribution system.

The imported oils would be refined and/or packed locally and sold at a subsidised rate — that is Rs 15 a litre below cost.

The move is sure to have a salutary effect on open market prices. This decision is something the Government ought to have taken two years ago.

Its failure to do so has meant consumers suffered unnecessarily and in some sense, short-changed.

But how well is the latest welcome decision going to work on the ground? Is there a more effective way of dealing with the price crisis, as far as edible oil is concerned?

Reports from the markets suggest that the Government parastatals such as NAFED and PEC have already issued a tender and begun to contact refiners and packers to handle the imported material.

A good strategy

Communication from these agencies indicates that crude oil would be imported for refining and packing locally. This may not be a good strategy after all.

Importing crude oil, getting it refined and packed locally is an onerous task, which will involve multiple handling, processing losses and more critically, time lag between crude oil imports and final product reaching consumers.

There are uncertainties in this long drawn out process, in addition to accounting issues.

This is a potential area for some people to make unearned profits. The intended purpose of the policy decision — to augment availability and rein in prices — stands the risk of being defeated in the event of hitches and time lags/delays.

Ort refined oil

On the other hand, import of refined oils would be a much safer option. Refined oils are readily marketable. Refined oils imported in bulk can be quickly moved to consuming centres in bulk, packed and distributed. The time lag would be considerably reduced, so will be the cost. This will have an immediate salutary effect on market prices. The speculators’ propensity to take advantage of price movements would be curtailed.

If the Government is really serious about gaining an upper-hand over the edible oil market, it would be advisable to import refined oils, that too without customs duty. The current rate of duty is 7.5 per cent.

O-duty refined oils

While there is a strong case for complete waiver of customs duty on refined oils for all categories of importers, the least the Government can do at this point of time is to allow duty-free import of refined oils by State agencies for supply through PDS.

The domestic oil lobby would of course raise objections to duty-free import of refined oils. There would be loud protestations that the domestic refining industry would suffer and oilseeds growers would be hurt. These simply are exaggerated scare the domestic industry keeps raising from time-to-time. The industry stands to lose little even if refined oils are allowed at zero duty.

The domestic players have made enormous profit in the last one year and more as a result of a rising market. They would of course hate to see a squeeze on their opportunity to continue to profit from market conditions. At least for the next six months, the Government must brush aside all such objections and ensure the really poor and needy get cooking oil at rates they can afford. Today’s priority is not the industry, but the aam aadmi in whose name the present Government rode to power four years ago.

There already are representations from the industry that a sharp decline in vegetable oil prices — following the recent precipitate action by the Government — may affect oilseed planting in the ensuing kharif season.

There is little evidence that oilseed growers are worried about the fall in cooking oil prices.

After all, growers are consumers too. Also, oilseed prices are still ruling above the minimum support price. So, far from hurting growers, the recent price fall is seen hurting the vegetable oil industry and trade. The shrill protests come as no surprise.

Tea Prices Rule Steady At Kochi Sales

Kochi: The Kochi tea auction remained subdued with no major vacillation in prices. There was a fair amount of arrivals in the dust tea category, while the quantity on offer at leaf tea auction was not significantly different. CTC dust was fully firm to dearer in the dust tea auction which had 10,54,000 kg on offer.

There was good demand from internal traders while major blenders and exporters operated on high-priced finer grades. Best CTC varieties fetched Rs 64-76, medium CTC was at Rs 58-63 and below medium ranged at Rs 52-55. High grown BOPD fetched Rs 107, medium BOPD quoted Rs 48-50 and secondaries were at Rs 43-47.

Leaf Sale

High grown whole leaf grades sold around last week’s levels at the leaf tea auction which had 2,63,000 kg on offer. Broken varieties remained fully firm. Medium orthodox broken met with good demand and were dearer by Rs 1-2. Clean black CTCs were steady.

Some exporters operated selectively at the leaf tea market. Best Nilgiri varieties fetched Rs 80-90, medium orthodox was at Rs 69-79 and plain orthodox quoted Rs 50-57. Best CTC leaf was at Rs 55-57 and medium CTC quoted Rs 46-53.

Spot Rubber Prices At 1-Year High

Kottayam: Physical rubber prices made yet another up trend on Thursday to touch a one-year high. RSS 4 rose sharply to Rs 111 a kg both at Kottayam and Kochi from Rs 109 a kg on Wednesday. Covering groups and purchase agents turned aggressive once again to procure the sparse arrivals and the market appeared to be moving under the control of speculators. A major manufacturer from the non-tyre sector bought sheet rubber at higher levels, sources confirmed.

Futures improve

The rubber futures continued to post moderate gains on NMCE. The May futures finished firm at Rs 109.43 (108.85), June at Rs 109.39 (108.72) and July futures at Rs 108.78 (108.35) per kg while the most distant August futures slipped marginally to Rs 107.04 (107.37) a kg for RSS 4. The open interest was 3,183 (3,233) tonnes with 1,872 (1,947) tonnes in May, 841 (812) tonnes in June, 434 (448) tonnes in July and 36 (26) tonnes in August. The volumes were 1,190 (1,049) lots.

Spot prices were (Rs/kg): RSS-4: 111 (109); RSS-5: 108.50 (107); ungraded: 106.50 (105); ISNR 20: 107 (106) and latex 60 per cent: 72.50 (72).

Karnataka Share In Cashew Trade Goes Up

Mangalore: Karnataka made significant growth in cashew imports and exports during 2007-08, constituting more than 11 per cent of the total import-export trade of the commodity.

Statistics from the New Mangalore Port show that the State exported 11,139 tonnes (10,529 tonnes) of cashew kernels, and imported 69,850 tonnes (48,901 tonnes) of raw cashew nuts during 2007-08.

The total export of cashew kernel from the country during 2007-08 stood at 1.14 lakh tonnes (1.18 lakh tonnes) and import of raw cashew stood at 6.05 lakh tonnes (5.86 lakh tonnes).

K. Prakash Rao, President of the Karnataka Cashew Manufacturers’ Association (KCMA), told Business Line that the cashew industry in Karnataka has been growing consistently at 15 to 20 per cent in the last three years in spite of the severe labour shortage in the State.

He said that export and import figures from the New Mangalore Port substantiate the claim of the processors that there has been buoyancy in the demand for cashews produced in Karnataka.

In addition to New Mangalore Port, cashew units from the State exported around 1,800 tonnes of cashew kernel and imported around 3,500 to 4,000 tonnes of raw cashew nuts through Kochi port.

“These figures account for more than 11 per cent of the total national export and import. Total cashew exports from Karnataka were hardly worth Rs 50 crore and less than 2.5 per cent of the total national exports in 1999-2000,” he said.

Cashew industry from the State exported cashew kernel worth Rs 325 crore during 2007-08, and the total value of cashew kernel exported from the country was at Rs 2,288.90 crore.

G. Giridhar Prabhu, proprietor of the Mangalore-based cashew firm Achal Industries, attributed this growth to the competitiveness of cashew units in the State and to the efficiency of New Mangalore Port in handling the cashew cargo.

On the improvement in the handling of cashew cargo, he said the Kanara Chamber of Commerce and Industry and New Mangalore Port Trust had taken initiatives to improve the movement of container cargo from the port.

Rao said that KCMA during the launch of its golden jubilee celebration in 2005 had released a vision document wherein it claimed that cashew exports from Karnataka would touch Rs 700-crore mark by 2014.

“The progress in the last two years justifies this claim and the industry is well on its way in meeting its targets,” he said.

Sluggish Demand Softens Edible Oils

New Delhi: Select edible oil prices drifted between Rs 50-150 a quintal in the wholesale oils and oilseeds market on Thursday owing to slow down in buying by millers and pick up in imports of edible oils.

Non-edible oils, on the other side, continued to be traded around previous level on some deals. Traders said apart from reduced offtake by millers, reports of a rise of about 38 per cent at 22.64 lakh tonnes of edible oils in the last five months also helped prices to decline.

They said reports of a near normal monsoon this year, forecast by the meteorological department was another factor behind fall in the prices.

In the edible section, groundnut and cottonseed mill delivery oil prices were down by Rs 50 each at Rs 7,050 and Rs 5550 per quintal respectively. Sesame mill delivery oil lost Rs 150 at Rs 7,650 a quintal on poor offtake.

Mustard expeller oil in line with general trend quoted lower at Rs 5,600 a quintal as against last close of Rs 5650. Rice bran (physical) oil also lacked necessary buying support and dropped to Rs 4550 a quintal from Rs 4,600.

Grains Rule Flat

New Delhi: Quiet conditions prevailed in the wholesale grains market on Thursday with most of the commodity prices after moving in a tight range, settled around previous closing.

Arrivals and offtake too remained at low ebb and volume of business was poor. Traders said negligible buying or selling by stockists at prevailing levels mainly kept prices unchanged.

Following were today's quotations per quintal in rupees:

Wheat MP (deshi) 1240-1490, wheat dara (for mills) 1065-1105, chakki atta (delivery) 1118-1120, Chakki atta Rajdhani (10 kgs) 150, shakti bhog (10 kgs) 160, roller flourmill 1110-1118, maida 1200-1215 (90 kilos) and sooji 1225-1240 (90 kgs).

Rice basmati (lal quila) 7000, Shri Lal Mahal 7000, Basmati common 6470-6670, Permal raw 1400-1500, permal wand 1600-1700, sela 2100-2250 and rice IR-8 1200-1300, Bajra 675-680, Jowar yellow 700-750, white 1250-1300, Maize 765-800 Barley (UP) 1140-1150 and Rajasthan 1150-1160.

Vegetable Oils Import Up 28% In March

Chennai: Import of vegetable oils, for cooking and industrial use, continued to rise and increased by 28 per cent in March, while overall shipments into the country during the current oil year (November 2007-October 2008) was up at 38 per cent.

According to the Solvent Extractors Association, cooking oil imports increased to 4.22 lakh tonnes (lt) against 3.18 lt during the same period a year ago. For the oil year, imports have increased to 22.64 lt against 16.43 lt.

peak crushing season

Imports have increased despite November-March being peak crushing season with kharif oilseeds being available and record production of 94 lakh tonnes of soyabean. One reason for the rise in production despite the peak crushing season is that the carryover stocks from the previous season were lower in view of a lower crop.

Imports have increased despite rise in global and domestic vegetable oil prices. According to B.V. Mehta, Executive Director of the Solvent Extractors Association, the rise in imports was due to the middle income group in the country being able to keep the demand rising in view of higher income.

This demand was able to neutralise the squeeze that was taking place among the lower income group.

Overall imports of vegetable oils are seen at 58 lt to 60 lt this oil year, a little higher than last year.

crude palm oil

Mehta said imports of crude palm oil showed a rising tendency also because of reports of Indonesia’s decision to raise export tax. The data show that refined oil imports have increased by two percentage points from last year.

Again among the vegetable oils, import of palm group of oils continues to witness an increase, making up 88 per cent of the total shipments into the country. This is against the oils making up 77 per cent of the total import last year.

Imports are seen gathering further momentum on lower rabi crop, steady global vegoil prices and the Centre’s decision to lower Customs duty to zero for unrefined oils and 7.5 per cent for refined oils.

Online Spot Gold Trading Records Average Sales Of 25 Kg

Mumbai: RSBL Spot (Spot Precious-metals Online Trading), over-the-counter (OTC) bullion trading platform, seems to be attracting traders and investor interest

The company, which has about 150 registered members, outperformed the combined volumes of about five gold exchange traded funds (ETFs) in India.

On Tuesday, the company recorded a volume of 33 kg, 90 per cent more than all gold ETFs. RSBL Spot, which was launched on March 12, records an average daily gold turnover of 25 kg, while it was 10 kg for gold ETFs, said Samir Shah, Vice President, RSBL SPOT.

RSBL Spot is first of its kind electronic trading platform in India with a distinction of giving physical delivery of precious metals. It provides real time price updates with charting and accounting modules which is very crucial for jewellers, who did not have a reliable source for Indian spot prices, said Ulhas of Antara Jewellery.

The promoter of the trading platform, RSBL Bullions Ltd has an annual turnover Rs 5,900 crore. It is the authorised participant (AP) of all the gold exchange traded funds (ETFs) in India and is also the largest creator and redeemer of units issued by these funds.

Tea Prices Continue To Gain, Up Rs 10-15 A Kg

Kolkata: It is about a couple of weeks since the new season for North Indian tea started, but with an average auction price increase of Rs 10-15 a kg compared with the corresponding period last year. This is more or less in keeping with the trend that persisted in the last quarter of 2007.

Drop in exports

One reason for this is the absence of carryover stock, largely due to high domestic consumption. The domestic consumption in 2007 was so high that even the drop in exports during the year compared to 2006 did not improve the domestic availability to leave with some stocks.

Also, the crop in March this year was lower compared to that in March last year, the shortfall being estimated at 40 per cent. The April crop, of course, is better but together with the March crop, the overall shortfall, it is estimated, will be about 20 per cent.

Industry bullish

The North Indian tea industry is bullish because it feels that there will be no respite from the price increase this year, largely due to the demand-supply mismatch. The domestic consumption has been growing at three to 3.5 per cent annually. Which means, every year the additional domestic demand will be up by around 30 million kg (mkg). But where is the tea to meet this burgeoning demand?

The production cannot be increased substantially within a short period. More important, the domestic availability of tea will not improve due to some other reasons also. With the Kenyan crop having failed and the world tea prices having risen by around 30 per cent, exports appear to be an attractive proposition. There being an accent on larger production of the orthodox variety fetching higher prices in the international market, any increase in orthodox production will entail drop in the CTC production to that extent. In 2007, the orthodox production was up by about 15 mkg.

Export demand

The export demand, it is felt, will also be fuelled by the probable increase in demand for Indian tea – the CTC variety from countries such as Pakistan and Egypt.

With the prospect of payment crisis in Iraq getting resolved soon, there might be additional demand for CTC tea from that country. Iran is likely to emerge as a major buyer of Indian orthodox tea, it is felt.

Spot Rubber Gains Sharply

Kottayam: April 16 Spot rubber made sharp gains on Thursday . According to observers, speculators kept the domestic mood extremely bullish as the scarcity of the raw material continued to haunt the main marketing centres. RSS 4 flared up to Rs 109 from Rs 108 a kg both at Kottayam and Kochi though major manufacturers sidelined the market at higher levels. The May futures for RSS 3 moved up sharply to ¥284 (Rs 112.37) from ¥278.4 a kg at TOCOM.

May futures improve

On NMCE, the May futures improved to Rs 108.63 (108.44), June to Rs 108.70 (108.69), July to Rs 108.30 (108.30) and August to Rs 107.32 (107) to per kg for RSS 4. The open interest was 3,233 (3509) tonnes. The volumes stood at 1,049 (984) lots. The outstanding positions were 1,947 (1,969) tonnes in May, 812 (810) tonnes in June,448 (435) tonnes in July and 26 tonnes in August.

Spot prices were (Rs/kg): RSS-4: 109 (108); RSS-5: 107 (105.50); ungraded: 105 (104); ISNR 20: 106 (105) and latex 60 per cent: 72 (71.50).

Govt To Import Oil, Pulses To Control Prices

New Delhi: In an effort to control the spiralling rise in prices, the Government plans to import one million tonnes of edible oil and 15 lakh tonnes of pulses, the Union Agriculture Minister, Sharad Pawar, said in Parliament on Wednesday.

Replying to a one-day debate on price rise, Pawar said that there is a scarcity of edible oil in the country. “We will import one million tonnes of edible oil and have told all public sector companies that they should import edible oil,” the Minister said. The oil will be sold at a subsidised rate of Rs 15 a litre throughout the country.

The Minister announced that 15 lakh tonnes of pulses will be imported with an order of 11.86 lakh tonnes being placed before March 31 and added that the Government has already abolished import duty on edible oils and pulses.

No scarcity of rice

The Agriculture Minister said that there was no scarcity of rice in the country and the Government has taken steps such as reducing the import duty to zero and putting restrictions on export of all varieties of rice except Basmati. Pawar also informed the House that production of rice was better than last year and expressed confidence that the Government will procure more than required. Similarly, wheat procurement this year was expected to be 150 lakh tonnes as against 111 lakh tonnes last year, Pawar said.

While emphasising that domestic food grain production was satisfactory, Pawar said prices had risen as the purchasing power of poor people had increased due to welfare schemes such as NREGA and, therefore, the demand had gone up tremendously.

“I would like to assure all members of the House that the policy of the Government is to control inflation as well as to ensure that the growth rate momentum does not decline,” he said.

International aspect

Pawar said there was an international aspect to the price rise as there was a global shortage of food grains and climate change was also having an impact on global production. The Minister, however, asserted that the increase in prices of essential commodities such as wheat and rice in the country was the lowest in the world when compared to other countries.

Spot Rubber Prices Improve

Kottayam: Spot rubber rates improved on Tuesday. The market flared up on supply concerns. A positive closing in the global futures extended further support to the domestic mood.

Sheet rubber RSS 4 moved up to Rs 108 from Rs 107 a kg at Kottayam and Kochi. The transactions were dull. RSS 3 firmed up at its May futures to ¥278.4 (Rs 110.22) from ¥276.3 a kg at TOCOM.

Futures gain

The rubber futures made all-round gains on NMCE. The April contract expired in green at Rs 107.01 (106.53) a kg while the May futures improved to Rs 108.30 (107.40), June to Rs 108.55 (107.80) and July futures to Rs 108.47 (107.45) per kg for RSS 4. The open interest was quoted at 3509 (4,661 ) tonnes. The volumes totalled 984 (409) tonnes with 108 (78) tonnes in April, 590 (220) tonnes in May, 206 (76) tonnes in June and 80 (35) tonnes in July. The open positions were 295 (1,552) tonnes in April, 1,969 (1,972) tonnes in May, 810 (744) tonnes in June and 435 (393) tonnes in July.

Spot prices were (Rs/kg): RSS-4: 108 (107); RSS-5: 105.50 (105); ungraded: 104 (103); ISNR 20: 105 (104.50) and latex 60 per cent: 71.50 (71.50).

Turmeric Futures Hit Lower Circuit

Mumbai: The Government anti-inflationary measures such as imposition of inventory limits by the State Governments and possible ban on futures trading in essential commodities continue to affect sentiments of traders in the commodity futures exchanges.

Almost all the agriculture commodities were locked at their lower circuit on Tuesday.

Chana for May delivery on NCDEX fell 3.98 per cent to Rs 2,629 per quintal on panic selling after Government officials conducted raids on traders to check their inventories in Maharashtra and Delhi.

Turmeric was frozen at the lower circuit of 4 per cent at Rs 3,024 per quintal on heavy selling and long liquidation. Guar gum and guarseed dipped 3.73 per cent and 3.71 per cent to Rs 4,438 per quintal and Rs 1,790 per quintal respectively due to weak spot markets and good south-west monsoon forecast.

Maize shed 3.02 per cent to Rs 739 per quintal on unconfirmed news that exports will be banned to rein in high inflation.

Soya gains

Soya oil futures topped the list of gainers as the most active May contract ended the session at Rs 590 per 20 kg, up 2.51 per cent. Strong sentiment in international edible oil market and rally in Crude Oil prices pushed up soy oil futures.

Good demand in the Guntur spot markets pushed up chilli futures 1.94 per ent to Rs 4930 per quintal. Sharp rise in soyameal prices supported soyabean futures to gain 1.78 per cent to Rs 2,200 per quintal. Strong stockists and millers demand saw mustard seed futures rise marginally by 0.87 per cent to Rs 548 per 20 kg.

MCX recorded a turnover of Rs 4,356 crore up to 5 pm, while it was Rs 2,068 crore in NCDEX.