Archive for November 27th, 2009

Seasonal Index – “Time is Money” Final Part

Hello Friends here we come up with an extension of our previous blog, “Seasonal Index……“Time is Money” Part 2

In previous Blog, we had touched upon the aspect like analysis part of seasonal patterns in predicting the future prices of the commodity.

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Seasonal Index - “Time is Money” Final Part

In this Blog, we would read about that how an annual average method can be used to generate a seasonal pattern in predicting the future prices of the commodity and seasonal pattern in the year 2009.

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Annual Average Method

The annual average method can be used to generate a seasonal pattern as well as predicting the future prices of the commodity.

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This seasonal price index is derived by calculating the annual average price, and then by expressing the price for each month during the year as a percent of the annual average.

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Here, the data which is used to derive the seasonal price patterns are the monthly prices taken between the year April’2004 & November’2009.

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The monthly indexes over the years are averaged to derive a price index that represents those years.

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An example of the technique is presented in Table 1.

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The seasonal price index table suggests that the index increases from the month of June, the time the buyers enter the market with full potential & reaches the highest till the end of the year.

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In The Year 2009

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The prices movement of this year almost followed the seasonal pattern, except few months.

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The supply constraints of lower output, as farmers opted for cotton, worked as a high base effect for the futures with a flat production figure of 8.5 lakh tonnes in 2008-09.

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The recovery in prices was noticed owing to the unforeseen failure of monsoons & comfortable stocks of 25-30 lakh bags from last year for which guar prices traded higher all through-out the year.

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This commodity created a history as it made a life time high, since the date of launch at national bourse, on reports that the output is estimated at 30-35 lakh quintals, down 62% due to factors like scanty rains in the major growing areas.

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Stronger Rupee along-with volatile Crude oil prices brought some corrections in export earnings from Guargum markets in Europe/US.

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However, upcoming demand for by-products such as churi & korma from international markets kept the millers interested in processing guar.

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In a nutshell, if investors want to spin their money safely & stabilize their net returns, using seasonal Index can prove to be a fair advantage.

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Dubai Debt News Sent a Shudder Throughout World Markets

Just a year after the global downturn  derailed  Dubai’s explosive growth, the  city is now  so  swamped  in  debt that  it’s  asking  for a  six-month  reprieve  on  paying  its bills.

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Dubai Debt Fears Grip World Markets

 

This has cast a shadow on a world only just emerging from the worst economic crisis since the 1930s,  knocking markets  from Sydney to Sao Paulo and raising questions about Dubai’s reputation  as a magnet for international investment.

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For India, which has tens of thousands of its citizens living  and working in the emirate,  the concerns are more direct:  thousands of its expats staring at job losses and  the economy, sharply reduced trade.

India, which gets nearly a quarter of the remittances from the United Arab Emirates and  has lakhs of laborers working in the region, could be worse off than most other nations  if the crisis escalates into a full-blown one  like the Russian or Argentinean crises of the past.🙂

India’s exports to the UAE stood at $23.92 billion in FY09.

It is very likely that we may see one more leg of job losses in Dubai.

The only consolation for the region is that Abu Dhabi is booming.

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Indian shares and the rupee fell in sync with other global markets where investors are fleeing for safety after Dubai debt trap concerns.

The Bombay Stock Exchange benchmark Sensex on Friday tumbled over 451.63 points to 16,403.30 points in the first ten minutes of trading on hectic selling by funds in line with weak global cues and concerns over Dubai’s debt.

Similarly, the wide-based National Stock Exchange index Nifty dropped by 140.50 points to 4865.05 points.

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Brokers said the selling focus was more on banking and realty stocks after Dubai’s debt problems revived concerns about the global financial system and rattled markets across Europe and Asia.

Indian rupee fell 24 paisa to 46.55 against the dollar.  The MSCI Emerging Markets Index lost 1.4%.

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Most European indices were about 2% lower after Asia tumbled.

The Shanghai Composite Index slumped 3.6%, its biggest drop since August, and Brazil’s Bovespa Index slipped 1.1%. U.S. markets were closed for the Thanksgiving holiday.

Credit-default swaps tied to debt sold by Dubai rose as much as 131 basis points to 571.

“Dubai isn’t doing risk appetite any favours at all and the markets remain in a vulnerable state of mind,” said Market analysts.

“We’re still in an environment where we’re vulnerable to financial shocks of any sort and this is one of those.”

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Uncertainty over stocks leads to price volatility in turmeric futures

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the globe.

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Uncertainty over stocks leads to price volatility in turmeric futures:

In an unusual situation this week, far-term turmeric contracts were trading much below near-term ones, offering a big arbitrage opportunity for hedgers and speculators, on the National Commodity & Derivatives Exchange (NCDEX).

The price difference was 39 per cent.

Last year’s carryover stock is estimated to have declined steeply, at around 150,000 bags (a bag is 70 kg) as of today, as compared to around 700,000 bags around the same time last year.

Arrivals at the Erode market were 2,000 bags and sold at Rs 10,900-11,000 a quintal.

In Duggirala, prices were placed at Rs 9,800-10,500 a quintal and in Warangal at Rs 9,900-10,500 a quintal.

Turmeric exports climbed seven per cent to 4,000 tonnes in October 2009 from the same period last year.

Weak turmeric futures put downward pressure on spot markets, to send the product down by Rs 800 a quintal.

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In Other major Commodities Updates also read Soybeans and Wheat Drop as Dubai Default Risk Dents Confidence of the Investors.

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Soybeans, Corns and Wheat Drop as Dubai Default Risk Dents Confidence:

Soybeans, corn and wheat slumped after Dubai’s bid to reschedule debt sent equities tumbling and eroded investor confidence in commodities.

Soybeans for January delivery dropped as much as 2.7 percent to $10.2625 a bushel, the lowest level since Nov. 19, in electronic trading on the Chicago Board of Trade and were at $10.385 at of 10:50 a.m. Tokyo time.

The contract has lost 0.7 percent this week, the first such drop in three weeks.

Wheat for March delivery in Chicago lost as much as 2.4 percent to $5.5775 a bushel before trading at $5.595.

The grain dropped 3.7 percent this week, falling for the first time in four weeks.

Production may be around 21 million metric tons, down 2 percent from last harvest and lower than the 23 million tons forecast in October,2009.

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