Archive for October 26th, 2009


Domestic wheat prices have escalated by around 10 per cent

Domestic wheat prices have escalated by around 10 per cent

Domestic wheat prices have escalated by around 10 per cent amid concerns of adverse monsoon and flood in Karnataka and Andhra Pradesh, which has raised concern over kharif food grain production particularly rice and maize.

Although there is still some upside left as far as wheat prices are concerned.

The prices will face strong resistance at higher level as supply situation in India and in rest of the world is in healthy shape.

Ample availability of stock at domestic level

At domestic level, wheat inventories have increased after two back to back record crops in the country.

Due to better carry over stock and record purchase government stocks reached to second highest level in the history at 32.29 million tonnes almost double than buffer stock requirement of 17 million tonne.


According to the Agriculture ministry’s fourth advance estimates, India produced a record crop of 80.58 million tonnes in 2008-09, while production was at 78.57 million tonnes in 2007- 08.

With bumper production and steep hike in minimum support price, government made record purchase of 25.3 million tonnes this year, 13 percent more as compared to last year.


Prospects of next year crop

Despite having comfortable supply currently, weak monsoon, flood in Andhra Pradesh and Karnataka and consequent Shortfall in kharif paddy output prospects has started fueling prices in the market.

A smaller paddy and maize crop will lift demand for their substitutes, primarily wheat.

As per crop weather watch report, acreage of kharif paddy this year remained at 324.28 million hectare till October 09, 2009 which is 16.2 percent or 6.26 million hectare lower than same period last year.

However kharif maize acreage remained higher this year but recent flood in Andhra Pradesh and Karnataka has aggravated the concerns of lower output.

As per Agriculture department report, kharif maize acreage was at 71.08 lakh hectares, 0.8 percent or 0.5 lakh hectares higher than last year.

Besides, flood in Karnataka and Andhra Pradesh and weak monsoon also raised concern over prospect of next wheat Crop.

Due to weak monsoon in northern part of India mainly in Punjab, Haryana and Uttar Pradesh, soil moisture condition is not sufficiently good for next wheat sowing.


Water storage in this region has also declined. As per Central Water Commission’s latest data in 81 important water reservoirs monitored by CWC in different parts of the country, total live storage has increased from 90.48 BCM on 01.102009 to 91.75 BCM on 08.10.2009.

But still is far from a satisfactory level.

Stay Tuned for More on this topic.

We would see demand and supply scenario in coming months, price trend and on Export Ban.

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SEBI’s New Direction to All Stock Exchanges & Intermediaries !

Sebi Directs Intermediaries/Stock Markets on the matter of Terror Funding

Sebi Directs Intermediaries/Stock Markets on the matter of Terror Funding

Market regulator SEBI has directed all stock exchanges and other securities intermediaries to keep a strict watch on UN-listed terror funding entities, including the famous underworld don Dawood Ibrahim.

The Securities and Exchange Board of India has asked the securities intermediaries to inform the Union home ministry within 24 hours if they find any client, whose particulars match with those of the entries listed by the United Nations.


SEBI has issued a statement that in case of the issue of particulars of any of customers matching the particulars of the listed individuals or entities, stock exchanges, depositories and intermediaries are instructed to inform full particulars to Ministry of Home Affairs, within 24 hours.

SEBI has also asked the securities intermediaries to prevent designated persons from conducting financial transactions in aforesaid events, under intimation to the Home Ministry.

According to laid down rules, on receipt of particulars, the home ministry would initiate a verification to be conducted by the state police and the central agencies.

The verification would be completed within a week.

In Past, Concerns were raised by the National Security Advisors and Home ministry about the prospect of Terrorists using the stock markets to bring money into India to fund their activities.


Sensex to Seek Direction from RBI’s Monetary Policy Review

Sensex to Seek Direction from RBI's Monetary Policy Review

Sensex to Seek Direction from RBI's Monetary Policy Review

Dalal Street will closely track the Reserve Bank‘s monetary policy review this week to seek direction, as weak global and domestic cues may continue to dampen sentiments in opening trade on Monday, experts say.

Besides, the expiry of the futures and option contracts this week is expected to keep the market volatile.

With global markets deteriorating and shares of Reliance Industries acting as a drag, market may open weak on Monday.

Marketmen said as valuations are overstretched, investors are now booking profit even at the slightest bad news.

Also, liquidity crunch is keeping frontline stocks under pressure.

On Friday, RIL scrips declined by 4.5 per cent.

“RIL, which is already reeling under uncertainty over the ongoing court case, would face further pressure. The scrip would be a dampener on the already weak market sentiment,” SMC Global Vice President Rajesh Jain said.

The Bombay Stock Exchange barometer Sensex lost three per cent, its biggest weekly fall in 11 weeks, to 16,810.81 points.

The index is up over 74 per cent so far in 2009, aided by foreign fund flows of over $14 billion.