Archive for the ‘agriculture’ Category

MAIZE……… “A-maize-ing”

The changing desires of eating taste have changed the periphery of the cereal. The change of label from “makka” on the road side to “masala corn” or “sweet corn” in the shopping malls across the country, has given an edge to this commodity.

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ACERAGE REPORT – INDIA

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Area, production and yield of maize in India had been increasing for the last five decades and India had reached near self sufficiency in production. “But this year there is a small twist in the story”.

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Maize is grown in both kharif and rabi seasons. According to data provided by industry players, kharif maize output is estimated at 12.5 million tonnes for 2009-10 as compared to 14 million tonnes in the previous year. The rabi season output is estimated at 4.68 million tonnes as against 5.60 million tonnes in the previous year. Overall, maize production in 2009-10 is likely to be 17.28 per cent lower, or 3.41 million tonnes less, at 16.32 million tonnes, from 19.73 million tonnes in 2008-09.

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Punjab: Maize acreage in Punjab is expected to increase by about 1.50 lakh hectares to 2.82 lakh hectare this season. In the last few years, maize is also grown in spring, particularly in the potato belt of the state.

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Haryana: Haryana farmers have increased the corn acreage to 40,000 hectares against the government target of 4000 hectares. This might not have an impact on domestic corn prices for the reason that Haryana is not a major corn producer and acreage in major corn producing states Karnataka and Andhra Pradesh has declined..

Tamil Nadu: Acreage of corn in Tamil Nadu has increased by around 71% till June 7, 2010 compared to last year.

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Andhra Pradesh: Despite of the normal rains in Andhra Pradesh, acreage under maize as on 16/06/10 has reduced significantly. Lucrative returns in other crops like sugarcane, sesamum have attracted farmers to shift corn area into those crops. Area covered under maize in Andhra Pradesh as on 16/06/10 is reported at 8945 hectares compared to the normal area covered till date 31403 hectares..

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On the whole, the total sowing acreage of maize as on 26th June 2010, reduced by 35% to 5.39 lakh hectares due to delayed monsoon in northern and central part of India..

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ACERAGE REPORT – WORLD.

Global maize production was likely to be a record 822 million tonne (MT) in the 2010-11 season, the International Grains Council (IGC) said in its latest report. “The world maize production forecast for 2010-11 is increased by 15 MT to a record 822 MT, up from 807 MT last season, due to improved prospects in US, Mexico and parts of Africa” the IGC report said.

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In its weekly crop ratings report, USDA said 73 percent of the corn crop was in good or excellent condition, down from 75 percent a week before.

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FUNDAMENTAL OUTLOOK

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·Chicago Board Of Trade (CBOT)

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U.S. corn futures market is caught between pressure from expectations for a big U.S.crop and support from uncertainty about weather and Chinese demand. Corn futures headed for the biggest monthly decline in three months as planting advances in the U.S., the world’s largest exporter, boosting expectations that the next harvest may exceed last year’s record. The USDA kept its estimate on the nation’s corn production unchanged at 13.37 billion bushels in the year beginning September, with 88.8 million acres planted, beating last harvest’s record of 13.11 billion bushels.

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·National Commodity Derivative Exchange (NCDEX)

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Maize NCDEX July future prices had seen consolidation in a range of 1010-1025. Recently, the counter making a technical break out, made a high of 1034.50. Despite of the higher acerage reports, the prices have maintained a continuous uptrend journey. Maize futures have given a profit return of about 9% in a span of six months dwelling between both bulls & bears. Most interestingly, the July contract has registered a profit of more than 11.69% within 8 weeks – 48 trading sessions – 336 hours of trade (approx.). Prices maintaining an upright stand & expecting the same with continuous buying from the consuming industries, the cereal is anticipated to make new highs. Maize NCDEX July future prices are in CONTANGO situation as
against June contract.

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Therefore to sum-up, there is a lot’s potential for corn futures supported by the fact of upcoming demand & rising consumption from every corner of the world. The day is not very far for the cereal to be the most “A-maize-thing” amazing commodity on trading platforms, giving their best returns.

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MINIMUM SUPPORT PRICE…… “The Farmer’s Armor”

MSP is a part of agricultural pricing policy of the central government. It is considered as a form of market intervention and also as one of the supportive measures (safety nets) to the agricultural producers.

In the phase of liberalization, MSP has a strong linkage to the market. In this situation, three important aspects deserve attention:

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(i) insulating the farm producers against the unwarranted fluctuations in prices, provoked by higher production and the international price variations and

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(ii) creation of an incentive structure for the farm producers in order to direct the allocation of resources towards desired crops and

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(iii) insulating consumers against sharp price rise, which may have been created by monsoon failure or even by vested interest by creating artificial scarcity. The focus is to providing remunerative prices for the cultivators.

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ROLE OF CACP

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The Commission on Agricultural Costs and Prices (CACP) discusses the price situation of various commodities with the representatives of the State government and various stakeholders to declare the prices of any agricultural product. The CACP while recommending MSPs takes into account factors such as cost of production, change in prices of inputs, demand and supply, market price trends and cost of living among other factors. MSP is determined by the principle of full cost of production that includes the rental value of land, an imputed value of family labor and returns to farmers.

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In fixing the support prices, CACP relies on the cost concept which covers all items of expenses of cultivation including in that the imputed value of inputs owned by farmers such as rental value of owned land and interest on fixed capital. Some of the important cost concepts used by CACP are the C2 and C3 costs.

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C2 cost includes all actual expenses in cash and kind incurred in production by actual owner plus rent paid for leased land plus imputed value of family labour plus interest on value of owned capital assets (excluding land) plus rental value of owned land (net of land revenue). Now, C3 cost is derived as: Cost C2 + 10 percent of cost C2 to account for managerial remuneration to the farmer.

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Costs of production are calculated both on per quintal and per hectare basis. Since cost variations are large over States, CACP recommends that MSP should be considered on the basis of C2 cost.

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Role of FCI

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On behalf of the Central Government, Food Corporation of India (FCI) along with State Governments and their agencies responsible for procurement of agri product on MSP fixed by CACP. But FCI procure the commodities from such states where production of any specific product is surplus. The main areas for procurement of wheat and rice are the surplus states like Punjab, Haryana, and some parts of Uttar Pradesh for both crops and Andhra Pradesh for rice. This has led two kinds of problems. One, growing buffer stock with FCI and our go-down are overflowing stocks of food grains, but, at the same time some parts of the country reported starvation. Second rest part of country producing these commodities doesn’t access the advantage of MSP.

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Farmers of those states do not fully get the benefit of the support price. This has created serious imbalances in demand and supply of principal crops in the country.

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Similarly, the country has been facing large shortages of pulses and edible oils .

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Latest Development

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The Cabinet Committee on Economic Affairs, chaired by Prime Minister Manmohan Singh, increased the minimum support price (per quintal): Arhar-Rs. 3,000, Moong-Rs. 3,170, Urad- Rs. 2,900, Paddy (common variety) Rs.1,000, and for grade A at Rs.1,030, Groundnut- Rs.2,300, Sunflower-Rs. 2,350, Niger seed Rs. 2,450,Soyabean (black)- Rs.1,400, Soyabean (yellow)- Rs.1440 and sesame- Rs.2900, Jowar (hybrid), bajra andmaize, the minimum support price has been raised by Rs. 40 and fixed at Rs. 880. MSPs of Jowar (Hybrid), Bajra and Maize each have been raised by Rs. 40 per quintal and fixed at Rs.880 per quintal.

Conclusion

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The policy has a favorable impact on farm income and has led to an economic growth. The implementation of Minimum Support Prices (MSP) has played an important role in meeting the ultimate goal of improving the agricultural production and the welfare of the agricultural community. Presently, 25 major crops are covered under the minimum support price program. Thus now MSP is oriented to crop diversification which had not encouraged earlier. Our policy makers are trying to effective implementation of MSP in all over the country.

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BARLEY…. “CLOCKING WITH VOLUMES”

When analyzing a particular commodity, it is very important to attempt to identify the “leader finished product” of that commodity which would drive the prices of the raw material and provide the most impressive investor returns. Here, in this column, illustrating some of the features of barley and the potential of barley futures which has directly or indirectly entered into the new luxury segment of malt industry & distilleries evolving within premium Indian brands.

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DEMAND COMING IN FROM…

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Demand from the distilleries and malt industries have always supported the barley market. Out of the total output, around 70 per cent goes to the malt industries which use it for beer making. The rest is used mostly as cattle feed. Major malt industries are located in and around the National Capital Territory (Delhi) in Haryana, Uttar Pradesh and Rajasthan.

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However, the facing a competition from Ukraine and Uzbekistan (the main competitors of India in barley production) where its availability is at cheaper rates, barley procurement by different companies has been slowed down from the Indian markets.

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The grain commodity has also taken supportive cues from the rising rates of other grains such as maize, jowar, bajra and guarseed. Another factor, which may contribute in rise of barley prices is the higher rates of molasses from the sugarcane industry. Apart from these consuming industries, poultry is another big consumer of barley in the country.

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EVOLVING MARKETS

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Keeping in mind the growth & design to meet the growing demand from the European Malting Barley sector, NYSE Liffe, the Europe-based derivatives business of NYSE Euronext (NYX), has launched Malting Barley futures and options on 10 May 2010, which will encompass Malting Barley from any European origin in a 50-tonnes lot size. It is unique in being the only market available worldwide to meet the specific hedging requirements of maltsters, brewers and distillers as well as those engaged in the production and trade of Malting Barley.

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CROP PROSPECTS

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Area under barley in India is stagnant near to 1600 metric tonnes, whereas the yield is expected to lower down to 2.03 metric tonnes per hectare in 2010-11 as compared to 2.17 in the year 2009-10. Rajasthan, Punjab, Haryana, Uttar Pradesh and Madhya Pradesh are the main barley producing states in the country.

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As per the latest released by Canadian Wheat Board, global barley production in 2010-11 is at 138 million metric tonnes, down from 144 million tonnes the previous year. The global malting barley import demand would increase slightly, to 4.46 million tonnes in 2010-11, from 4.36 million. The stocks will remain more than sufficient to meet the demand.

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FUTURES & SPOT UPDATE

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Travelling through a volatile path, with lots of upside & down, barley prices have managed to gain profits at 15.68% to Rs 1,040 per quintal in spot market (NCDEX) & by 22.24% to Rs. 1100 per quintal in the futures trade following increased positions by the investors. Tracking the spot & futures prices, it has been seen that from the beginning of month of April, with summer temperatures soaring, prices of barley heats up. There is a huge surge in the trading volumes. Last year volume in the same quarter was at about 16,160, whereas it has now clocked to 82,470 quintal.

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Taking into consideration, of increasing procurement by consuming industries & brewing industry operating at their full capacity during this period of summer, an investor can buy barley before the commencement of summer season during the harvesting period around March and April & accumulate till the month of June for getting decent returns on investment.

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In recent days, the barley futures (NCDEX June contract) have shown a breakout above its weekly resistance of 1080 levels, trading at 1108/quintal, depicting & apprehending that prices may remain stronger with an upside target of 1120 in medium term, & downside is likely to be restricted at 1020 levels, supported by continuous pipeline demand from the consuming industries.

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The fact brewing industry growing at 15-18 per cent a year, & increasing stock-touse ratio, barley cultivation is slated to become the next big opportunity.

Food Price Index Rose 16.23%

Food price index rose 16.23 per cent in the year to May 15.

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The fuel price index climbed 12.08 per cent.

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Meanwhile, the speed of rise in food prices slackened from the previous week”s annual rise of 16.49 per cent.

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The fuel price inflation also slowed to 12.08 per cent from the previous week”s 12.33 per cent.

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The primary articles index was up 15.90 per cent, compared with the previous week”s annual reading of 16.19 per cent.

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Wholesale prices, however, eased in line with expectations to 9.59 per cent in April from a year earlier.

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This in turn provided further evidence that the RBI will hold off from raising interest rates at least until its next scheduled meeting in July.

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Earlier, Planning Commission Member Abhijit Sen stated that food inflation is likely to decrease to 4 to 5 % by November.

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This is from the current over 16 % after the arrival of Kharif (summer) crops.

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Meanwhile, he added that farm sector growth will be altered upwards to 0.2 % in 2009-10.

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This, however, is from the earlier estimate of minus 0.2 %.

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Prices have started falling from March after good Rabi arrival.

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Moreover, for some commodities such as onion and potatoes, the decline is very sharp.

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But, however, the overall prices are very high and after Kharif season, prices will commence to decline.

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He also said that it is quite possible food inflation will decline to 4-5 % by November this year.

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On the other hand, experts had predicted a decrease in food inflation with the arrival of Rabi crops in April.

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Mainly due to high prices of vegetables and fruits, food inflation carried on increasing and rose to 16.49 % for the week ended May 8.

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Prime Minister Manmohan Singh had expressed optimism that overall inflation would decline to 5-6 % by December.

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In addition, on farm sector growth, Sen said growth is expected to be 0.2 % in 2009-10.

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This is due to the upward revision in production in third advance estimate.

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In 2010-11, the farm sector growth is likely to be 5-6 % if met department forecast on monsoon comes true.

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Foodgrains production has been revised upwards to 218.19 million tonnes from 216.85 million tonnes quoted in the second advance estimate released in February.

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Wheat production is projected at a record 80.98 million tonnes in 2009-10.

Commodity Weekly Update

Fearing the worst, investors were heading their bets and turning to gold. Last week gold futures hit arecord high of $1,249.70 an ounce on COMEX division, a gain of nearly 20 percent since early February2010, as investors sought safety from turmoil in government bond markets and the risks of Greece’s debt crisis spreading to other countries.

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Domestic silver also kissed the crucial level of Rs.30, 000 per kg tailing the gains in international market. In base metals section, copper along with nickel and zinc slide in later part of the week as the investors continued to fret about China’s growth profile.

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Demand concerns within China, as world’s top copper consumer may try to curb inflation and cool its economy after data this week showed consumer inflation climbed to 18-month high in April. Also, gains in dollar index remain intact which capped the upside in future prices. In energy counter crude oil prices once again dragged down last week by economic concerns and rising U.S. petroleum inventories.

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The front month contract on NYMEX division had tested the lowest level since Feb. 12, 2010 and has erased more than $14 from a high of $87.15 hit on May 3, 2010, the highest in almost 19 months. Crude oil inventories at U.S. Cushing, Oklahoma hit a fresh record of 39 million barrels in the week to May 11, according to Genscape, an energy industry data provider. However natural gas witnessed some gains last week backed by short-covering after a government report showed a smaller-than-expected weekly inventory build.

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The U.S. Energy Information Administration report showed total domestic gas inventories rose 94 billion cubic feet to 2.089 trillion cubic feet for the week ended May 7.

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Most of the agro commodities caught up in the negative mood. Despite steep fall in production, guar complex surrendered its previous gain on the news of normal monsoon amid dull demand. Even spices were sideways to downwards on profit booking at higher levels, except pepper. The king of spices, pepper saw a smart recovery on raising quality issue by US for Vietnam pepper. Now Indian pepper has taken the center stage worldwide and demand has shifted towards India. Rally in turmeric appeared tired and traders preferred profit booking. Similarly, after witnessing a whopping rise in thecardamom prices last to last week, prices cooled down on profit booking.

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On the back of steady supply together with restricted supply propped up gur prices in both spot and future market. Range trading with downside bias noticed in oil seeds complex on mix fundamentals. Total vegetable oil imports in India during the April period were down 22% to 5.43 lakh tonnes on the account of ample stocks of vegetable oil at major ports. After making new contract low in recent trade chana futures were just trying to consolidate at lower levels. After a steep fall, mentha oil futures recovered marginally on short covering.

CARDAMOM SET TO A NEW HIGH :)

Even if with hue and cry in the commodities market with dollar index noticing terrific movements with a weaker rupee, cardamom the “Queen of all spices” price movement in 2010 began its journey with Rs. 1131 per kg, giving the investors a return of 27% (approx) in few months of time.

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Cardamom futures (May Contract) at MCX commodity bourse is now trading at life time high at Rs.1445/kg.

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Cultivation:

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Cardamom starts in bearing capsules three years after planting. There are three distinctive types of cardamom grown in India viz., Malabar, Mysore and Vazhukka type. Malabar and the Guatemalan are the two major commercial varieties of small cardamom in the world. Indian cardamom is slightly smaller. After the first crop, higher and sustained yields are obtained in subsequent years up to the tenth or fifteenth year, depending on the type cultivated and upon the level of management.

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Production in India:

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Production of cardamom is mostly concentrated in the ever green forests of Western Ghats in South India. It is grown in Kerala, Tamil Nadu and Karnataka.

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Large Cardamom is cultivated in the Sub-Himalayan region of North Eastern India, Nepal and Bhutan. Kerala is the largest producer of cardamom with a share of around 70% in the total production. Karnataka shares around 20% and rest comes from Tamil Nadu. India consumes almost 90% of the domestic production and exports only 5 to 8% of its total production. India also exports by-products of cardamom like cardamom oil and oleoresins to the European countries.

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Vandanmedu, Kumily, Thekkady in Kerala, Bodinayakanur, Pattiveeranpatti in Tamil Nadu, Saklashpur, Mercara, Medikeri, Mangalore in Karnataka are the major trading centers in India for cardamom

Production in world:

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Cardamom is also referred as “grains of paradise”. The world production of cardamom is around 35000 metric tonnes per year. Guatemala is the leading producer of this spice with a production of around 23000MT and around 66% share in the global production. India is now the second largest producer of cardamom in the world with production of around 12000 metric tonnes of cardamom every year. Tanzania, Sri Lanka, El Salvador, Vietnam, Laos, Cambodia and Papua New Guinea are the major cardamom growing countries.

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EXIM scenario

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In India, the Average production for Cardamom is around 12000 tonnes per year, but in 2009-10 the production is expected to fall down to around 8000 tonnes. With the domestic consumption very robust and exports looking good, cardamom prices are seen moving to record levels in the current season. Global shortage due lesser production in Guatemala is also adding the momentum of prices. Exports have gained almost 12-15% of its production during the first ten months of the last financial year that ends in March this year. Exports during April-January stood at 1,500 tonnes, up almost 283% from last year and it is the highest level in last 10 year, while in value terms the figures were estimated to be around Rs 118.71 crore, up 206% during the same period last year.

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Concluding with the view that each commodity has its own fundamentals, demand and supply profile, which drive its prices. Though, the secondary driver, dollar index often gives impact on the commodity prices significantly.

INDIAN ECONOMY – GAINING STRENGTH Final Part :0

Thank you friends for viewing the first part. Now i am posting the final part here enjoy:)

4.Fresh Investments – Infrastructure being one of the key thrust areas on government agenda would continue to see large investments coming in going ahead. Even the corporate are expected to continue with the capacity additions in the light of huge anticipated demand.

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After the sharpest decline in more than 70 years, world trade is set to rebound in 2010 by growing at 9.5%, according to WTO. Exports from developed economies are expected to increase by 7.5% in volume terms over the course of the year while shipments from the rest of the world (including developing economies and the Commonwealth of independent States) should rise by around 11% as the world emerges from recession. This strong expansion will help recover some, but by no means all, of the ground lost in 2009 when the global economic crisis sparked a 12.2% contraction in the volume of global trade – the largest such decline since world war II . Should trade continue to expand at its current pace, the economists predict, it would not take much of the time to surpass the peak level of 2008 in terms of the volume growth.

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Coming back to India front, the continued demand revival in major markets such as the US and European Union, led exports to remain in the positive territory for the fourth consecutive month with shipments in February growing by 34.8% to $16.09 billion from $11.94 billion during February 2009. India’s Imports too saw a growth of 66.4% to $25.05 billion from $15.06 billion in the corresponding period. Cumulative value of imports for the period April, 2009- February, 2010 showed a degrowth of 13.5% to $248.04 billion from $287.09 billion in the corresponding period as a result of both lower international crude oil prices and slowdown in domestic economic activity.

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India’s two-way trade (merchandize exports plus imports), as proportion of GDP is close to 35%. Now, with the expected improvement in the global trade it would further give a fillip to the economic growth.

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The services sector contributes around 65% to GDP. The lead indicators of service sector activity show that, services such as tourist arrivals, cargo handled by seaports and airports, and passengers handled by international terminals which are dependent on external demand are showing recovery with the improvement in global climate. However, services dependent on domestic demand have exhibited a robust and steady growth during 2009-2010, so far.

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In sum, the expected normal monsoon, buoyancy in industrial production & services suggests continuation of growth momentum. With the fiscal deficit being addressed by the government with large focus on infrastructure spending, improvement in corporate sentiments with respect to capital spending & RBI taking steps to withdraw monetary accommodations in a calibrated way is expected to take economic growth back to 9% levels.

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Stay tuned for more update like this :)

INDIAN ECONOMY – GAINING STRENGTH Part 1

Stock market reflects & discounts the overall conditions in the economy.Besides, stock prices in the market are also governed by the investor behavior & valuations. Sometimes investor’s optimism takes the market valuation to a level that it does not matches up with the actual future growth, thus becoming the basis for correction & vice- versa. It is said that “ markets may remain irrational till the life of human being”. Now let us have a look at the economy to see what lies in the future & how it is shaping up for the next leg of growth.

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Indian economy is expected to grow by 7.2% in the fiscal ended on 31st march 2010 & is projected to expand by 8.55 in the current fiscal year and 9% in the next year. The continued improvement in the sentiments of the manufacturing sector which currently contributes around 15% in GDP is likely to play a major role in taking GDP growth to double digits.

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Strong industrial recovery has been the key underlying strength behind the recovery of GDP. During April- December 2009, the index of industrial production (IIP) increased by 8.6% over the corresponding period. Factors that will drive the growth in the industrial production are:

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  • Improvement in agriculture output- Tokyo-based Research institute for global change has predicted normal monsoon rains in india for the current year. On the belief of climatic conditions will remain normal during the year we expect the improved availability of agricultural output to push up production of manufactured food products..

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  • Rising consumer demand – as the business conditions are improving & corporate are giving wage hikes, we believe this will strengthen the sense of financial security in the minds of urban middle-class. A rise in purchasing power and availability of easy and affordable loans are expected to increase the demand for durable goods like auto, consumer appliances.

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  • More availability of mining products- we expect natural gas & crude oil output would increase as the result of the efforts that are being done by companies like Reliance & Cairn India. Coal Production will also rise owing to the allocation of new coal blocks by the government. Fertilizer & Electricity sector would be the key & direct beneficiary with the improvement in the gas & coal availability.

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    Stay tuned for more on this 🙂

    Weekly Update 19th – 23rd April 2010

    After nine consecutive weeks of gains, domestic markets ended in the negative terrain in the week gone by on the concerns over interest rate tightening by the RBI in its monetary policy scheduled on 20th April coupled with weak cues from the Asian markets.

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    Moreover increase in unemployment numbers in US and China’s measures to cool its real estate market raised the uncertainty over the global economic growth. Now, Investors are much wary over the signs of overheating in China as its economy grew almost 12%, the biggest expansion since 2007, Industrial production grew 18.1% in March & retail sales increased 18%. Closer home IIP numbers for the month of February grew by 15.1% as against an annual gain of 16.7% in January, and 17.6% in December. While India’s inflation, as measured by the wholesale price index (WPI), surprisingly stayed almost unchanged in March at 9.90% as compared to 9.89% in February. However, it is expected that after the strong Industrial numbers, improving trade, healthy credit off take in the last fortnight of last financial year & high Inflation, RBI may take steps to suck liquidity by increasing Cash Reserve Ratio & give signals of higher interest rates to the banking system & industry as well by increasing both policy rates. The other concern emerging for the manufacturing growth is appreciating rupee.

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    As a major proportion of manufactured goods are meant for exports, the rise in domestic currency will arrest exporters’ margin & may result in lower export.

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    FII’s also were a bit cautious to actively participate in the market ahead of RBI’s policy review. In the current CY, FIIs have so far pumped in more than $5.42 billion, while in the month of April; they have been net buyers at $ 1.05 billion in the Indian markets. Expectation of the good corporate results is likely to play a catalyst role for the next direction of the market. World stocks & commodity markets fell across the board after the revelation of SEC announcing civil fraud charges against Goldman Sach’s. This incident is likely to have its effect on the markets in the coming week.

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    After 9 weeks of continuous rally in Indian stock markets, the rally ended last week after Nifty closed down 1.85% for the week. With world stock markets including the commodities taking a sharp correction on Friday, it seems that temporarily a top has been made in the market and one should be careful.

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    Nifty has support between 5200-5100 levels and Sensex between 17400-17200 levels.

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    On the commodity front, a range trading is expected in metals and energy.

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    Since last few weeks, bullions and base metals have been trading in upper zone but are unable to break the resistance. Once they break their resistance then only, traders’ can see a new trading range. Back at home, sharp appreciation in rupee is also locking the movements. Data from European Union is important for the week apart from PPI and housing data of US. If improvement continues then only commodities will trade in upper trading range or vice a versa. Agro commodities could be more volatile ahead of expiry of April contract on NCDEX. In agro commodities, guar could see further rise on improved fundamentals as well as technical.

    Milk, Fruits and Pulses Raised Food Inflation to 17.70%

    Higher prices of milk, fruits and pulses raised food inflation to 17.70% for the week ended March 27.

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    This was due to the expectations that RBI may further tighten rates in its annual monetary policy on April 20.

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    Meanwhile, food inflation in the previous week stood at 16.35%.

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    The overall inflation for March is likely to cross the double digit mark.

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    This is with prices of vital items increasing and fears of food inflation spreading to manufactured goods.

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    The overall inflation, which includes variation in prices of food and non-food items, was 9.89 per cent in February.

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    On an annual basis, pulses became dearer by 32.60 per cent, milk by 21.12 per cent, fruits 14.95 and wheat by 13.34 per cent.

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    Moreover, on a weekly basis, the index for food articles rose by 0.9 per cent as fish marine, milk, fruits, masur and vegetables became costlier.

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    In order to rein in inflation, the PM is holding a meeting of the core committee of Chief Ministers with representations from 10 states and senior Cabinet ministers.

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    The core group of chief ministers comprises Andhra Pradesh, Assam, Bihar, West Bengal, Punjab, Gujarat, Haryana, Tamil Nadu, Madhya Pradesh and Chhattisgarh.

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    Besides CMs, the other members of the committee are Finance Minister Pranab Mukherjee, Food and Agriculture Minister Sharad Pawar and Planning Commission Deputy Chairman Montek Singh Ahluwalia.

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    General inflation has already surpassed RBI”s March end projection of 8.5 per cent.

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    On the other hand, RBI governor D Subbarao had also said that the apex bank will carry on its exit from monetary stimulus policy to check high inflation and ensure sustainable growth.

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    Earlier, according to the government data, released yesterday states the India”s Consumer Price Index (CPI) increased by 14.86 % in the month of February 2010 as against a year ago, which is lower than January”s annual growth of 16.22 %.

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    During the month of February 2010, the CPI for Industrial Workers reduced by 2 points to 170.

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    Also, India”s annual wholesale inflation rose to 9.89 % in February 2010 as compared to an increase of 8.56 % in January 2010 and 3.50 % against a year ago.

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    The wholesale price inflation is more closely watched in India because it covers a higher number of products.

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    The Wholesale Price Index (WPI) based inflation rate is rising quite sharply ever since it came out of the negative territory in September 2009.

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