Posts Tagged ‘demand and supply’

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

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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INFLATION – “THE SILENT CREEPER” Part 2

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Hello Friends here we come up with an extension of our previous blog, INFLATION –  “THE SILENT CREEPER”.

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Inflation Silent Creeper Part 2

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In previous Blog we had touched upon the impacts of inflation on economy in current scenario and the reasons for the inflation.

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Now in this part we would look into the possible Measures to check inflation.

Measures to check inflation:


•  To give immediate relief from inflationary pressure, government is planning to check the supply deficiency.

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It has allowed importing sugar.

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It will import rice, as rice production is expected to drop in 2010.

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Import duties on oil seeds have been slashed.

•  Money supply should be checked, otherwise in the time of scarcity excess liquidity will accelerate inflation further.

•  Distribution process should be very fast and transparent.

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Currently we need a well managed and coordinated distribution of stocks through PDS (Public Distribution System), open market sales of public stocks etc.

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Hoarding should be avoided here and government should keep an eye on this.

•  This rising inflation has become a major threat for economy.

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The only key way to check the inflation is to bridge the gap between demand and supply, which may control the price rise.

•  Unfortunately, Indian agriculture is characterized by low input and low output systems.

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Hence we have to increase the productivity.

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For example: Yield of paddy in India is only 2.9 tonnes/hectare as compared to 7.5 tonnes/hectare in US.

•  Check the rising cost of cultivation.

Increasing land, labour, fertilizers and other inputs are discouraging farmers to produce more in absence of sufficient liquidity.

•  Apart from grain, government should also create buffer stocks or strategic reserve of oil seeds and other crop, so that it can release it at the time of crisis.

Next Blog we would try to know about the other concerns in Indian economy regarding the parameters to check inflation.

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Stay Tuned for more on this.

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However For More latest Industry, Stock Market and Economy News Updates, Click Here

INFLATION…. “THE SILENT CREEPER”

Hello Friends here we come up with another write up on “SMC Gyan Series”.

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INFLATION…. “THE SILENT CREEPER”

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Topic is INFLATION…. “THE SILENT CREEPER”

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Here, we would go through the Brief of like what are the impacts of inflation on economy in current scenario and what are the reasons for the inflation?

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It is an alarming situation when the entire world is fighting with this historical economic crisis.

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Inflation is adding additional pressure on government as well as consumers.

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Major contributor of this whopping hike in inflation is food inflation at present context.

Mismatch between demand and supply worldwide created chaos and sent prices of many commodities at multi year highs.

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According to the latest data, food inflation rose to 17.47 % for the week ended

November 21, 2009 against 15.58 % in the previous week owing to spiraling prices of
vegetables, pulses and sugar.

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If we talk about overall WPI inflation, it doubled to 1.34 % in October as compared to 0.50 % in the previous month.

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On year on year basis, food prices jumped by 13.32% in October only.

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Rice, pulses, sugar and potatoes, onions were up by 13.22%, 22.81%, 45.70%, 96.43% and 37.60% respectively.

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Reasons for inflation and its impact on economy:

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•  Bleak monsoon coupled with worst drought in nearly four decades in the country situation is haunting the entire economy.

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According to an estimate, India may see a drop of 18% in Kharif crop.

It will create further demand and supply mismatch.

People will spend less, if prices will move in the same way and ultimately it will affect most of the sector of economy.

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•  To encourage farmers to produce more, government has recently increased the MSP (Minimum support Price) of rice, oilseeds, cotton, sugar and many more.

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Higher MSP immediately pushed the prices up.

Though the long term impact of this step will be positive, as more farmers will produce more to get good remuneration.

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•  Hoarding by stockist, farmers in anticipation of further hike in prices is also creating a demand supply mismatch, resulting in higher food inflation.

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•  Government has to compete high with the large scale entry of private players, which procure grains aggressively for biscuits, millers and manufacturers of processed foods.

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•  Declining trend of public investment in agriculture is another concern for government at present.

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Next Blog we would try to know about the possible Measures to check inflation.

Stay Tuned for more and more on this 🙂

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However For More latest Industry,Stock Market and Economy News Updates, Click Here

Bull Run in Commodities May Continue

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

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Bull run in commodities may continue


Bull run in commodities may continue:

Spurt in prices to be driven by dollar weakness, rise in demand and low supplies.

The global bull run in commodities is likely to continue through next year due to dollar weakness, supply restraint and, eventually, a pickup in demand.

Crude oil prices are also up 74 per cent, but the energy complex as a whole is down, as natural gas prices are weighed down by massive oversupply.

Precious metals have also risen 37 per cent.

The base metals complex has performed well this year, driven by the rebound in growth in China, although some of the increased demand has gone into inventory.

Sugar and soybeans have been the exception in 2009, rising sharply while the rest of the agricultural complex underperformed.

This was largely on supply issues; improved crops in 2009-10 are expected to flood the market, dampening prices.

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In Other major Commodities Updates we can read about Govt estimation about the Edible oil output which says that Edible oil output may dip 7.4% in 2009-10.

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Edible oil output may dip 7.4% in 2009-10:

The government today said edible oil output is likely to decline 7.4 per cent to 7.96 million tonnes in the 2009-10.

Edible oil production, last year, stood at 8.6 million tonnes.

Oil season runs from November to October.

Production/net availability of edible oil from all domestic sources is estimated to be 7.96 million tonnes in the 2009-10,” Minister of State for Agriculture K V Thomas said.

The demand of edible oil in the country is estimated to have increased to 17.79 million tones this year, he said.

The domestic edible oil production is likely to decline following a dip in oilseeds production, which is estimated to be 15.23 million tonnes in the kharif season against 17.88 million tonnes in the last season, the official data showed.

Thomas said, “There is a wide gap in the production and demand of edible oil in the country and imports are resorted to bridge the gap.”

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CORN………. “The Un-discovered Legend” Part 1

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

Here we would touch upon the importance of Maize crop in Indian commodity market and its relevance in the context of Indian Scenario 🙂

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CORN………. “The Un-discovered Legend”

Maize, also known as corn, is a cereal which is an important crop after rice and wheat.

The domestication of maize has been dated back as far back as 12,000 years ago. Today, maize is widely cultivated throughout the world, in a greater size with top producing countries like United States, China, Brazil, France, Indonesia, India and South Africa.

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Indian Scenario:

Andhra Pradesh is now the largest producer contributing around 21% of annual maize production.

India ‘s area harvested of maize and yield have risen by mainly on account of rising production of single cross hybrids seeds, its demand and increasing acceptability among farmers.

In India, its cultivation extends from the hot arid plains of Rajasthan and Gujarat to the wet hills of Assam and Bengal.

There are three distinct seasons for the cultivation of maize:

the main season is kharif;

next is Rabi in Peninsular India and Bihar and

in spring in northern India.

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Normally, higher yields have been recorded in the rabi and spring crops.

Over 85 per cent of the maize acreage is sown under rain-fed conditions during the monsoon when over 80 per cent of the annual rainfall is received.

However, this year due to the erratic monsoon production has been affected, as a result of which maize prices have been in uptrend since the withdrawal of monsoon from the country.

During 2008-9, Indian exported 3 million tonnes of maize and 12,000 tonnes of maize seed worth of Rs 2,400 crore and Rs 2,000 crore respectively.

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Stay Tuned for more on this.

In next blog we would touch upon the issues like Potential source of demand for Maize crop, Industrial Demand and PVO (Price-volume-open Interest) of MAize crops.

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Note : For More Latest Industry, Stock Market and Economy News and Updates, please click here

RBI Emphasizes on Managing the Economic Recovery, For Now :)

RBI emphasizes more on Managing economic Recovery

 

The Reserve Bank of India, country”s Central bank, has said that managing economic recovery is now its focus area and the first phase of monetary tightening will arrest inflation without hurting growth.

RBI Executive Director Deepak Mohanty was found quoting  that at present, the focus around the world and also in India has shifted from managing the crisis to managing the recovery.

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He said that withdrawing soft monetary policy, which was initiated to weather the financial crisis is the key challenge.

“The key challenge relates to the exit strategy that needs to be designed, considering that the recovery is as yet fragile but there is an uptick in inflation, though largely from the supply side, which could engender inflationary expectations,” he said.

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Besides this, Mohanty said that the first phase of exit has been initiated by RBI in its monetary policy review in October 2009.

That was done mainly by withdrawal of unconventional measures taken during the crisis.

RBI, in its monetary review in October has raised the requirement for banks to hold portion of the deposits in cash, gold and government securities to 25 per cent.

Moreover, it had also done away with special liquidity provision for banks to provide money to mutual funds and others.

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