Archive for December, 2009

Oil Prices Increased in Asian trade, Firmly Above $79

As rising US energy demand helped sustain markets on the last day of 2009, oil prices increased in Asian trade.

However, New York”s light sweet crude for February delivery, was up 50 cents to $79.78 a barrel while Brent North Sea crude for delivery in February gained 22 cents to $78.25.

Meanwhile, a second consecutive week of falling energy inventories in the US boosted prices while declining stockpiles indicated rising demand in the US.

The US Department of Energy (DoE) data showed crude inventories declining by 1.5 million barrels in the week ending December 25.

On the other hand, due to increased demand resulting from cold winter weather gripping the US, distillates, which include heating fuel and diesel decreased 2 million barrels.

In Other major Commodities Updates, we have news of High potato, pulses rates push food inflation to 19.83%.

High potato, pulses rates push food inflation to 19.83%

Due to rise prices of potato and pulses, food inflation increased to 19.83% for the week ended December 19.

However, over the last year, potato prices more than doubled while pulses became costly by over 41% and onion rates rose by 40.75%.

Prices of vegetables rose by 46.7% while fruits became dearer by 10.35%.

Meanwhile, with bajra and wheat becoming costlier by 12% and 4% respectively, the rise in prices was significant on a weekly basis also, while rates of rice increased by 2%.

Similarly, barley and urad rose by 1% each while prices of fruit and vegetables declined by 5 per cent on weekly basis.

The food inflation had declined by 1.30% points to 18.65 per cent during the second week of December.

On the other hand, among the non-food articles, raw rubber turned expensive by 3% and rape and mustard seed by 1% while the fuel index remained unchanged.

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RUBBER – STRETCHING & MOVING ON THE WAY AHEAD Final Part

Hello Friends here we come up with an extension of our previous blog, RUBBER – “STRETCHING & MOVING ON THE WAY AHEAD” Part 1

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RUBBER - STRETCHING & MOVING ON THE WAY AHEAD

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In previous Blog, we had touched upon the aspects like that of the investment scenario of rubber in India, price movement of the rubber in Indian market and gap in the demand and supply of the rubber in the market.

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Now in this part, we would look into the impact of the shortage of rubber industry on major industries and the scenario of the rubber production in other countries.

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IMPACT ON MAJOR INDUSTRIES:

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The acute shortages of rubber in the market & rising input cost have affected the tyre industry.

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The ticking demand from automobile industry is growing with days passing by, & the steep rise in raw material cost is exerting pressure on the companies to hike their product prices.

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Apollo has proposed a 5-10 per cent hike while JK Tyres may raise prices by 3-5 per cent.

The automobile firms are presently negotiating the price hike with the tyre companies.

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To curb this negative inflationary impact, the industry has asked permission for duty free import of one lakh tonnes.

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THE ELEVATION “Estimating the future”:

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Thailand & Indonesia accounting for over 60% of the global rubber production, have reported for a            9% & 6% fall in production this year.

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Also Malaysia output hit at 77,620 tonnes in November may pull other nations like China to make a aggressive buying from India.

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The country not confronting any shortage in the domestic market with higher relatively higher opening stock at 2.47 lakh tonnes by November-end is in a safer position as compared to other countries.

This is due to the higher import by the industry which was pegged at 1.32 lakh tonnes during the period.

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Estimating the future, in the lines of rise in domestic consumption by 3.5% as in this year  & export demand coming to the country with shortage in the major producing countries, the prices may ignite further.

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PLANNED LAYOUT “Paving the Way”:

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The government had decided to double the NR production in the country within a period of 10 years, with identifying & bringing around 4.5 lakh hectares of land under cultivation.

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The planned layout:

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1. To increase the acreage in the north-east by 26,200 hectares by 2011-12.

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2. Financial assistance to the tune of Rs 30,000 per hectare for fresh planting and re-planting activities in      these areas.

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3. Expenditure of Rs 23.47 crore for human resource development.

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4. Allocation of Rs 8.8 crore for research and development operations.

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5. An earmark of Rs 19.55 crore for assisting nursing of plantations, processing and marketing of rubber.

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6. Providing fencing to 25,000 hectares for rubber plantation and an additional 500 hectares with irrigation facilities during the eleventh five-year plan.

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7. In order to co-ordinate the development operations in the north-eastern states, an additional Rubber Production Commissioner exclusively for these area will be appointed.

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This was the final part of the topic RUBBER ………… “STRETCHING & MOVING ON THE WAY AHEAD”.

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Stay Tuned for more write ups in “Commodity Corner Series” on SMC Global Blog.

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Note : For More Latest Industry, Stock Market and Economy News and Updates, please Click Here

Centre released Rs.361 crore to the States

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

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Centre released Rs.361 crore to the States

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Centre releases Rs. 361 crore to States :

The Centre on Tuesday released to the State Rs.361 crore as its share of the 2008 kharif crop insurance.

Minister N. Raghuveera Reddy said the State and Central governments had sanctioned Rs.800 cr. under the crop insurance scheme claimed by 7.5 lakh farmers.

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Out of which, the State already released its share of Rs.356 crore a month back.

The distribution process of the released funds would be completed in two-three days.

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In Other major Commodities Updates, we can read about the stories of flour mills across the country buying of wheat from government under OMSS via electronic auction process on NCDEX Spot Exchange and on NSEL.

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Also we will read of the story related to NCDEX, which is set to launch online spot trading in Rajasthan soon.

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Flour mills to buy wheat from govt through e-auction:

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Come January and flour mills across the country will start buying wheat from government under open market sales scheme (OMSS) via electronic auction process on NCDEX Spot Exchange and National Spot Exchange (NSEL).

State-owned Food Corporation of India (FCI) has decided to use electronic trading platform of both the bourses to offer wheat under OMSS.

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Under OMSS, FCI has offered 1.5 million tonnes wheat in the first tranche in four states — Delhi, Haryana, Karnataka, and Andhra Pradesh.

The minimum quantity has been fixed at 100 tonnes and then in multiples of 10 tonnes.

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NCDEX to start online spot trading in Rajasthan:

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NCDEX Spot Exchange (NSPOT), a spot trading arm of the country’s largest agri commodities futures trading platform, National Commodity and Derivatives Exchange (NCDEX), is all set to launch online spot  trading in Rajasthan soon.

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The exchange has already got permission from the state government to launch spot trading in rapeseed/mustardseed, chana and guarseed in the state.

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With this, the exchange has secured permission to set up Spot exchanges in the states of Gujarat, Karnataka, Maharashtra, Haryana, Bihar, Rajasthan and Kerala.

It also has APMC cess paid contracts in Madhya Pradesh.

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Note : For More Latest Industry, Stock Market and Economy News and Updates, please Click Here

RUBBER – STRETCHING & MOVING ON THE WAY AHEAD Part 1

Hello Friends here we come up with another write up on “Commodity Corner Series”.

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Topic is RUBBER ………… “STRETCHING & MOVING ON THE WAY AHEAD”

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RUBBER - STRETCHING & MOVING ON THE WAY AHEAD

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We would touch upon aspects like the investment scenario of rubber in India and price movement of the rubber in Indian market.

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We would also read about the gap in the demand and supply of the rubber in the market.

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Rubber is springy & has the potential energy of getting stretched.

These properties are also seen in the price movement of the prices.

The year 2009, has given stretchable & phenomenal return on investing in rubber futures.

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INDIAN SCENARIO :

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The four-month period between October and January is the peak season of rubber output in the country.

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The total area of plantations in the country is 662,000 hectares of which 92-93 per cent is in Kerala.

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Tripura is the second-largest rubber planting state in India after Kerala.

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DEMAND & SUPPLY GAP –Walkthrough 2009:

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As we know that profit increases when the difference or the gap between the cost price & the selling price increases.

This immense gap was witnessed in rubber prices.

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Tight supply & tracking the rise in Asian markets like Tokyo and Singapore gave momentum to the prices to rise through out the year.

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The Indian industry consumed 356,400 tonnes of natural rubber (58 per cent of the total domestic consumption) during April-November.

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In April-November, natural rubber production in India dropped 6.5 per cent at 538,125 tonnes against an increase of 3.5 per cent in consumption at 614,600 tonnes.

So there was a gap of 76,475 tonnes in production and consumption.

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PRICE MOVEMENT “Focus on the journey, not the destination”:

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The spot prices at the benchmark Kochi had begun its journey at Rs.67.23/Kg & touched the high of Rs. 139.19 within a year.

Strong appreciation in prices in all major global markets which touched Rs 130.48 per kg, made the domestic market bullish.

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Similarly, the futures at MCX posted a gain of 78.94% as of 22nd December, 2009.

This spike was also supported by the increased gap between production & supply.

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Next Blog we would read about the impact of the shortage of rubber industry on major industries and the scenario of the rubber production in other countries.

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Stay Tuned for more on this.

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Note : For More Latest Industry, Stock Market and Economy News and Updates, please Click Here

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Wheat Falls as Rally, Dollar Gain May Curb Demand for U.S. Crop

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

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Wheat Falls

Wheat Falls as Rally, Dollar Gain May Curb Demand for U.S. Crop:

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Wheat dropped on speculation that a price rally to a three-week high and the dollar’s rebound may reduce demand for the U.S. crop.

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Corn and soybeans also declined.

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The grain yesterday jumped 5 percent, the most since Nov. 11, leading gains in corn and soybeans on speculation that fund managers will purchase agricultural commodities at the start of 2010, anticipating improved demand as the global economy strengthens.

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Wheat for March delivery declined as much as 1 percent to $5.45 a bushel on the Chicago Board of Trade and traded at $5.4575 as of 10:49 a.m. in Tokyo.

The contract yesterday touched $5.51, the highest level since Dec. 8.

The grain has lost 11 percent this year.

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In Other major Commodities Updates, we have news of edible oil industry, urging a tightening of futures trading in oils and oilseeds.

Industry wants tighter oil, oilseeds futures norms:

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With oilseed crushers feeling the pinch on their margin due to rise in oilseed prices, which, they feel, have been fuelled by speculations in futures trading, the edible oil industry is urging a tightening of futures trading in oils and oilseeds.

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Raising the issue, the Solvent Extractors’ Association of India (SEA) has suggested the Union consumer affairs ministry that new futures contracts for oilseeds should be restricted to current plus one month only.

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As for existing futures contracts for the next six months, the traders should be asked to square them off on the date of settlement next month.

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Moreover, all contracts have to be backed by a minimum quantity of delivery, suggested SEA.

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It has further requested the ministry to enhance the margin on trading to such a level, which would discourage speculators entering into this arena.

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Note : For More Latest Industry, Stock Market and Economy News and Updates, please Click Here

GST Introduction in April to Reduce Indirect Tax Burden

GST Introduction to Reduce Indirect Tax Burden

The Finance Ministry maintained that the net burden of indirect taxes on the people would reduce by 25-30% when the proposed Goods and Services Tax (GST) is introduced from April 1, 2010.

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However, it is said that real estate would also be brought under the GST scanner and deliberations in this regard between the Centre and the States were almost conclusive.

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The draft legislation on GST had been referred to legal experts and would be finalized in order to facilitate the government to achieve target of implementation of Goods and Services Tax as has been promised by April, 1, 2010.

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Meanwhile, it is said that there were divergent views expressed by the Empowered Committee of State Finance Ministers and the Thirteenth Finance Commission (TFC) on certain issues relating to GST, but noted that these were on the verge of finding a solution.

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On the other hand, according to the implementation programme, the government plans to introduce the GST regime from the new fiscal to replace excise duty and service tax at the Central level and the VAT at the State level, apart from others levies like cess, surcharges and local taxes as currently applicable on good and services.

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