India Is Likely To Import Additional Cooking Oil - Sep 04 , 2008

India is likely to import additional cooking oil in the year starting November as dry weather reduced monsoon sowing of peanuts, sunflower and sesame seeds. India is the world's biggest buyer of vegetable oils after China. Purchases may go up by at least 500,000 metric tonnes from 5.1 million tonnes this crop year ending October 31, said Govindlal G Patel, director of Dipak Enterprises, in an interview. Patel, 69, has been trading the commodity for more than four decades.

India imports more than 85 per cent of its edible oil in the form of palm oil for use in curries and fried foods. Prices of palm oil have tumbled 44 per cent from a March record of 4,486 ringgit ($1,303) a tonne, cutting import costs for the country that's battling the fastest inflation in 16 years. Spiralling food prices have caused Prime Minister Manmohan Singh's Congress party to lose ground in nine of 11 state polls since January 2007. Singh faces elections in six more states this year and a national election by May 2009. Farmers planted peanuts on 5.03 million hectares, 2.3 per cent less from a year ago as of August 28, the farm ministry said. The area for sunflower seeds fell by 30 per cent to 495,000 hectares, and for sesame by 9 per cent to 1.36 million hectares. The seeds yield more oil when crushed than soybeans

India Has Conducive Environment For Gold Mining

New Delhi: Stating that India has a conducive environment for the mine and mineral sector, the Minister of State for Mines, T. Subbarami Reddy, called upon the World Gold Council to invest in the gold mining sector.

“The consumption of gold is at an all-time high in India. The Government has taken a constructive approach to fuel growth in the mining sector and is looking to open investment in gold mining,” he said, adding that the WGC should ask entrepreneurs to bring in technology to promote investment in the sector.

Speaking at the meeting, James Burton, Chief Executive, WGC, said, “We hope the policies in the sector will be favourable for it to flourish in India.”

The price factor

On the fluctuating gold prices, he said the drop in the dollar rate is a major contributing factor besides the US sub-prime crisis. He, however, declined to comment on whether the prices will stabilise.

Burton also noted that the WGC is looking to cross-list its New York-listed StreetTRACKS Gold Shares, a gold exchange-traded fund (ETF), in Japan and Hong Kong by September.

Sanjiv Batra, Chairman of MMTC, said the potential of gold mining is very good in India. However, foreign companies in the sector were seeking clear guidelines regarding leasing agreements. He also said the Government is also looking at s

India May Hike Crude Oil Taxes To Finance Storage

New Delhi: The government might increase cess and duty on crude oil to raise money to fill the 5 million metric tonne (MMT) capacity strategic crude oil reserve storages, Minister of State for Petroleum and Natural Gas Dinsha Patel said here Tuesday.

The government is setting up storage capacities at Visakhapatnam in Andhra Pradesh and Mangalore and Padur near Udipi in Karnataka at an estimated cost of Rs.23.97 billion to create strategic crude oil reserves to meet emergency situations like disruption in imported crude supply.

"While oil industry development board is financing construction of strategic storage, the government could consider a temporary increase in the cess on domestic crude and customs duty on imported crude to meet the cost of filling crude," the minister said.

"While Vizag (Visakhapatnam) is proposed to have 1 MMT crude storage capacity, Mangalore and Padur storages will have capacities of 1.5 MMT and 2.5 MMT, respectively," the minister said.

"The Padur storage is expected to be commissioned by December 2011, followed by completion of Vizag and Mangalore storages in January and July of 2011," Patel informed the Rajya Sabha, the upper house of Indian parliament.

India Holds Key To Global Sugar Prices

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

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

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

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

Global prices

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

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

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

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

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

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

Chill Factor Rules Supreme

Thiruvananthapuram: The chill factor continued to rule supreme in the North and Northwest on Tuesday as cold wave conditions prevailed over many parts of Punjab, Haryana, the Jammu Division, Rajasthan, Gujarat, Madhya Pradesh, Chhattisgarh, East Uttar Pradesh and adjoining Bihar and Jharkhand.

India Meteorological Department maintained its outlook for similar conditions to sustain during the next two days as well even while they were forecast to extend to more parts of East India.

Cold wave conditions are likely over Rajasthan, Gujarat, Madhya Pradesh and Chhattisgarh.

FROST ALARM

There was no let-up in frost alarm with parts of Punjab, Haryana, North Rajasthan and West Uttar Pradesh expected to feel the bite for two more nights at least.

Towards the East, isolated rain or thundershowers are likely over coastal Orissa, sub-Himalayan West Bengal and Sikkim.

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Minimum temperatures are expected to fall by 2-4 °C over the region and cold wave conditions are likely over East Uttar Pradesh, Bihar, Jharkhand and adjoining Orissa. Rain or thundershowers are likely at a few places over Arunachal Pradesh.

Isolated rain or thundershowers are likely over Assam and Meghalaya.

PENINSULAR RAIN

In the South, Monday’s cyclonic circulation off the Maharashtra -Gujarat coasts now lies over Madhya Maharashtra and neighbourhood.

Isolated rain or thundershowers are likely over Konkan and Goa from Wednesday onwards. Thundershowers are also likely over Madhya Maharashtra and Marathawada.

The trough running from sub-Himalayan West Bengal and Sikkim to Kerala through the peninsular has become less marked.

Rain or thundershowers are likely at many places over coastal Andhra Pradesh and at a few places over Telangana, Rayalaseema, Karnataka, Tamil Nadu, Puducherry, coastal Karnataka and Kerala. Isolated rain or thundershowers are likely over the rest region.

A warning issued by the Regional Met Centre, Chennai, said that isolated heavy rainfall is likely over coastal Andhra Pradesh during next 24 hours.

The rainfall activity over the peninsula is forecast to lift gradually from February 15, but will see varying peaks at a few places before it lifts completely.

India Exploring Wheat Import Options

Mumbai: The global commodity markets are currently in a state of uncertainty. Prices remain volatile and outlook has turned increasingly uncertain in the backdrop of broader market concerns, especially in financial and energy markets. The global grains market is no exception. Wheat and soyabean prices spiked recently on the futures bourses to set new records. Corn (maize) too is tightening.

Investors are increasingly turning to agricultural commodities. The next 2-3 months are crucial. From now on, the focus of the global grains market participants would increasingly be on developments in the US. How the US farmers would respond to price changes in recent months, what would be their planting intentions and what considerations would weigh with them for any change in acreage allocation (including weather and disease outlook) are questions that would be pondered over.

The focus would also be on the northern hemisphere as a whole, with outcomes of crops in China and India being keenly watched. As far as the US is concerned, if the extent of price rally is the basis of decision by the farmers there, then wheat stands the best chance of an area expansion, followed by soyabean. Corn would be third in priority as its prices rallied less than the other two.

Volatility hook

However, until acreage numbers crystallise, the market would only be double-guessing the actual outcome. Therefore, a lot more choppy trading and volatility can be expected. According to the London-based International Grains Council (IGC), on current reckoning, the 2008 outlook for wheat is generally positive. Assuming reasonable weather in main producing areas, world wheat output is forecast to rebound by about 40 million tonnes (mt) to a record 642 mt.

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There is also strong expectation that soyabean production in 2008 would rebound by at least 10 per cent, especially in the US, from the previous year’s low of 70 mt (down 16 mt from 2006). Should that expectation materialize, and if combined with large oilseeds crop in China and India, the outcome will have price implications for the global vegetable oil market, notwithstanding the frenzy created by the bio-diesel sector.

Scouting for wheat

Meanwhile, there are reports about Indian wheat acreage having reached close to last year’s levels (27 million hectares). Official statements suggest expectation of crop size close to 2007 level of 75 mt. There are also reported statements that India would not need to import any more wheat.

Despite the brave assertions, it is believed that India is seriously scouting for wheat in the global market. The Government may be unwilling to take a chance as far as availability and prices are concerned, especially when elections are looming large.

Explorations are going on rather quietly because of the ruckus the last import contract created. The Government is currently engaged in examining various options. A barter deal with Russia is being studied. Exercising the ‘call option’ is another step that is under contemplation, although the last time it fizzled out.

Discussions with US

Importantly, discussions with even the US are currently on for wheat imports. It maybe recalled, the US could not supply to India because the latter refused to loosen the strict phyto-sanitary requirements. Meanwhile, the domestic trade has other ideas about the crop size.

US To Support Nilgiri Speciality Teas

Coonoor: The USA has assured its support to speciality teas from the Nilgiris considering their quality.

“We are comfortable dealing with India. Having seen for the first time how quality teas are manufactured in the Nilgiris, I will spread the message to tea traders in the US. We are impressed by the long tradition of Indian teas, spanning a period of 200 years. More and more tea rooms are now taking to Indian teas. The Nilgiris tea has not been all that popular with us compared to Darjeeling or Assam, but I will explain to the traders back home the superior quality of these teas,” said Joseph P. Simrany, President, Tea Association of the US.

Speciality teas

Launching the Glendale Speciality Tea retail packs at Glendale Estate in Coonoor he recalled how some of these teas had created records in the US by fetching $600 a kg. “This shows that there is support for quality supplies. We wish that you fetch more such prices in the days to come,” said Simrany who is also President of US Speciality Tea Institute and the Tea Council of USA.

His wife, Carol Simrany, received the first basket of Glendale Speciality Tea packs in the presence of Ali R. Rizvi, Director of Tea Promotion, London.

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Hailing the quality of these teas, R.D. Nazeem, Executive Director, Tea Board, said he had taken it up with the authorities of the Guinness Book of Records to give an entry to Glendale Tea on its having fetched the highest price of $600 a kg.

Glenworth prospects

K. Gopalakrishnan, Director, Glenworth Estate Ltd, which owns Glendale Estate, said that although the company produced some 1.5 million kgs annually, 75 per cent of it was exported. “But, the packs we are launching today are orthodox teas for the home segment in India, which will give the Indian consumers an opportunity to taste speciality teas. These come in vacuum packaging,” he said.

India Set To Strengthen Commodities Regulator

New Delhi:India may move to beef up its commodity markets regulator at a cabinet meeting this week with new legislation to make it fully independent and armed with punitive powers, a minister said on Tuesday.

Unlike India's autonomous stock market regulator, the commodities regulator, known as the Forward Market Commission (FMC), is controlled by the Consumer Affairs Ministry and needs to seek government permission for many decisions.

"We are going to bring an ordinance this month to strengthen the Forward Markets Commission. The cabinet meeting is on January 24," Food Processing Minister Subodh Kant Sahai said.

"The main point is that the Forward Market Commission will become autonomous. Today, it is an attached office of the government," FMC Chairman B.C. Khatua told reporters when asked to explain the impact of the new laws, if approved.

"Many people do not know about commodity futures as it is relatively new here. To bolster people's confidence in the trade the regulator must have adequate powers to avoid any manipulation or excessive speculation."

He said strengthening the regulator would likely enable banks and financial institutions to enter commodities bourses and deepen trading.

The changes would also help the introduction of options trading in commodities, the minister said.

"I think the government plans to make the FMC independent like (stocks regulator) SEBI and give more punitive and regulatory powers," Anjani Sinha, managing director and CEO of the National Spot Exchange said.

"With more powers at its disposal, the FMC will be able to curb volatility and punish those who may try to manipulate the trade. It will help bring more transparency."

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The government only allowed trading in commodity futures in 2002 and options are still not permitted.

Three exchanges -- the National Commodity and Derivatives Exchange, Multi Commodity Exchange, and the National Multi Commodity Exchange -- were set up in 2003.

According to the Forward Markets Commission, commodities worth $900 billion were traded in 2007 and the turnover is expected to touch $1 trillion next year.

But some trade and government officials have said a boom in commodity derivatives has fuelled food prices, which prompted the government to ban futures trading in rice, wheat, and lentils in February last year.