Posts Tagged ‘economic recession’

Spices Exports to Cross $1 billion: V.Kurien

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

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Spices Exports to Cross $1 billion

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Spices exports to cross $1 billion: Kurien

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Spices exports from India will cross the $1-billion mark in the current financial year, according to VJ Kurien, chairman of the Spices Board.

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Till December, the country had exported spices worth $830 million, despite the economic recession.

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Addressing a press conference here, Kurien said in the first half of the current year, the export sector was in troubled waters due to the economic downturn.

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But, exports of chilli, coriander, mint and value-added spices picked up later, he said.

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At present, the demand from these countries is largely met through European re-sellers and the board plans to attract buyers from these countries to sourcing markets in India.

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Kurien said the Spices Park at Puttady in Idukki district of Kerala would commence operation in the first week of March.

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In Other major Commodities Updates we can read about palm oil prices growing at a weaker pace and about the starting of Wheat e-auction for open mkt sale from February.

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Palm oil prices likely to recover at weaker pace:

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Palm oil prices, which have lost about 8% so far this year, are expected to grow at a weaker pace as rival soyoil eats into the vegetable oil market following a bumper US and South American soybean crop.

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Benchmark crude palm oil futures on the Bursa Malaysia Derivatives Exchange hit an all-time record of 4,486 ringgit in early March 2008 and then tumbled  to a low of 1,331 ringgit in October the same year at the height of the financial crisis.

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It is now trading 44% below record levels.

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Indonesia, the world’s top palm oil producer has projected output in 2010 to reach 23 million tonnes, up from 21 million tonnes last year.

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Malaysia, the world’s No. 2 palm oil producer, may see production increase by 3.4%, to 18.1 million tonnes this year, on the weaker impact of the El Nino weather condition, which usually brings drier weather.

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A free trade agreement between China and the 10-member Association of South East Asian Nations will see China’s import tariffs for palm oil cut to zero and 5% by January 2018 from eight and 9%.

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Wheat e-auction for open market sale to start from February:

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The government has decided to sell its excess wheat stocks through e-auction by the Food Corporation of India (FCI) from February.

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The e-auction intends to cut down prices of wheat offered under the open market sale scheme (OMSS) by reducing transaction cost.

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Indian Export to Register 10% Growth during 2010-11 :)

India-exports-growth

With all sectors including textile showing recovery, the total export from India is likely to register 10% increase during 2010-11.

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However, the growth during this fiscal (2009-10) would be either flat or marginally negative, although export observed a marginal decrease during the last financial year due to global recession.

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While, it is said that almost all the sectors in India were showing a stimulation or plus-growth, including automobile, plantation and engineering.

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On the other hand, it is said that the economic situation is not really that bad and there is a sign of revival during the last two to three months whereas the year 2010-11 is said to be good for all the sectors, particularly textile, which was feeling the ”cyclic pinch” and that would be back to business in the year.

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Though textile would continue to remain weak in 2009, there could be recovery in the year 2010 and once the demand from the USA and EU improves, it is expected to achieve a reasonable growth 🙂

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However, though there was a steep export growth in textiles and clothing in the first half of 2008-09, there had been slowdown in demand from major markets, USA and EU, due to the global economic crisis.

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Are There Any Advantages of Systematic Investment In ULIPs ??

 Benefits of ulips.jpg

The impact of economic recession on life insurance companies has gone unnoticed where not only premium incomes but also the employment potential of many companies has decreased.

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However, the global slowdown and resulting unpredictable stock indices have shaken public confidence in long-term financial planning and there is visible unwillingness to purchase an insurance policy and commit oneself to pay premiums regularly over a number of years.

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Moreover, the Sensex, over the last 25 years, suffered massive crashes in 1992-93, 2000-01 and 2008-09 at eight year intervals.

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However, there was no impact on the life insurance industry on earlier occasions, when the index crashed whereas till the opening of the insurance sector, the Life Insurance Corporation was marketing traditional products, considered symbols of stability and security, immune to the vagaries of the stock market.

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Moreover, the new companies that came on the scene, trying to capitalize on the stock market boom, began marketing unit linked products, ignoring traditional products.

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However, although the Sensex had crashed three times, it had advanced from just 245 in March 1984 to 9700 in March 2009, an annual growth of 16% while stock market indices tend to increase steadily under the influence of economic growth and inflation.

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Nevertheless, under the impact of speculative forces, the growth can be uneven while investors can minimize, if not eliminate, the impact of speculative forces through systematic investment in ULIPs or mutual funds.

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Moreover, under a unit linked plan, the premiums are invested in equities and the value of the units on any day moves broadly in line with the stock index on that day.

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Suppose a person had taken out a ten year policy on March 31, 1984 and paid Rs. 1,000 every year.
Ignoring all charges and the dividend income from investments, what is the gross yield he can expect by March 1994?

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Based on the changes in Sensex, the average yield will be 17.8 per cent. 🙂

If the date of commencement had been March 1985 or 1986 … or 1999, the yield to maturity at the end of ten years would have varied between 4.8 per cent and 30.3 per cent.

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And in four of the 16 cases the yield would have been negative.

The range of variation is quite wide and the chance of negative yield is 4 out of 16, or 25 per cent.

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The range will narrow down and chances of negative yield come down with increasing policy terms.

The results will be still better with quarterly or monthly modes of premium payments.

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This means that an investor in ULIPs should opt for a minimum term of 15 years and, preferably, a quarterly mode of payment.

And, having chosen a plan, he should select a fund with more than 50 per cent equity content.

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Even if the market takes a sudden plunge after the policy is taken, be not panic and allow the policy to lapse.

One should pay the next premium in time.

With a lower net asset value, he can get more units for the same premium.

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Market setbacks at the earlier stages of a policy will not significantly affect the yield to maturity.

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But any setback in the last few years before maturity can reduce it considerably.

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It is therefore advised that the policy holder should start keeping a close watch on the NAV of the relevant fund and the market indices.

If there are indications of a downtrend, he should surrender the policy and take out the cash value.

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By following the above steps one can insulate oneself, though not fully, from market fluctuations and hope to get a better return than what one can get from a traditional product.

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A lucky few may even get a very high return while the unlucky ones may end up with very low or even negative returns.

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Suppose a person had taken out a ten year policy on March 31, 1984 and paid Rs. 1,000 every year.

Ignoring all charges and the dividend income from investments, what is the gross yield he can expect by March 1994?

Based on the changes in Sensex, the average yield will be 17.8 per cent.

If the date of commencement had been March 1985 or 1986 … or 1999, the yield to maturity at the end of ten years would have varied between 4.8 per cent and 30.3 per cent.

And in four of the 16 cases the yield would have been negative.

The range of variation is quite wide and the chance of negative yield is 4 out of 16, or 25 per cent.

The range will narrow down and chances of negative yield come down with increasing policy terms.

The results will be still better with quarterly or monthly modes of premium payments.

If dividend incomes from investments and the fact that fund managers invariably outperform the market index are also taken into account, the net yield after deduction of charges may exceed the gross yield.

This means that an investor in ULIPs should opt for a minimum term of 15 years and, preferably, a quarterly mode of payment.

And, having chosen a plan, he should select a fund with more than 50 per cent equity content.

Even if the market takes a sudden plunge after the policy is taken, be not panic and allow the policy to lapse. He should pay the next premium in time. With a lower net asset value, he can get more units for the same premium.

Market setbacks at the earlier stages of a policy will not significantly affect the yield to maturity. But any setback in the last few years before maturity can reduce it considerably.

It is therefore advised that the policy holder should start keeping a close watch on the NAV of the relevant fund and the market indices. If there are indications of a downtrend, he should surrender the policy and take out the cash value.

By following the above steps one can insulate oneself, though not fully, from market fluctuations and hope to get a better return than what one can get from a traditional product.

A lucky few may even get a very high return while the unlucky ones may end up with very low or even negative returns.

US Economists feel Positive, says Worst is Behind :)

Worst is behind :)

Among the world’s large economies, UK, which is the seventh largest and Italy, the tenth, remain in recession, like the US.

The UK economy shrunk 0.8% in the second quarter, while Italy’s was down 0.5%.

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Unlike in the UK, however, economists in the US believe the worst may be behind them.

‘‘It’s quite possible, though not certain, that retrospectively, we’ll say that the recession ended in July or August, may be September,’’ Nobel laureate Paul Krugman was quoted as saying.

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There is evidence that his is not undue optimism.

The pace of job losses in the US slowed more than forecast in July and the unemployment rate dropped for the first time in more than a year.

US GDP also shrank by just 0.3% (equivalent to an annualized 1%) in the seconnd-quarter after a 6.4% drop in the previous three months.

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That explains why US Federal Reserve is willing to bet that the nosedive the economy had witnessed in recent months is behind it.

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Over the last two years, the US has witnessed its worst financial crisis in decades, but that could be ending, which is good news for the world since it accounts for a fifth of global GDP.

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France and Germany also announced unexpected returns to the growth path, which means that four of the world’s five largest economies and six of the top 10 are now not in recession.

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Adding to the sense of optimism, the US Federal Reserve left rates unchanged, saying that the world’s largest economy was showing signs of levelling out.

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Among the five largest economies of the world, measured in purchasing power parity (PPP) dollars — which is more of an apples to apples comparison — China and India are already growing at healthy rates, although lower than their own pace for the last few years.

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Japan too has climbed out of recession and so has Germany.

These economies and the US account for 47% of world GDP in PPP terms.

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Among the world’s other large economies, Brazil is also now no longer in recession having grown by 1.5% in the second quarter.

Among the world’s large economies, UK, which is the seventh largest and Italy, the tenth, remain in recession, like the US. The UK economy shrunk 0.8% in the second quarter, while Italy’s was down 0.5%.

Unlike in the UK, however, economists in the US believe the worst may be behind them. ‘‘It’s quite possible, though not certain, that retrospectively, we’ll say that the recession ended in July or August, may be September,’’ Nobel laureate Paul Krugman was quoted as saying.

There is evidence that his is not undue optimism. The pace of job losses in the US slowed more than forecast in July and the unemployment rate dropped for the first time in more than a year. US GDP also shrank by just 0.3% (equivalent to an annualized 1%) in the seconnd-quarter after a 6.4% drop in the previous three months.

That explains why US Federal Reserve is willing to bet that the nosedive the economy had witnessed in recent months is behind it. Over the last two years, the US has witnessed its worst financial crisis in decades, but that could be ending, which is good news for the world since it accounts for a fifth of global GDP.

Some light showed up at the end of the recession tunnel on Wednesday as France and Germany announced unexpected returns to the growth path, which means that four of the world’s five largest economies and six of the top 10 are now not in recession.

Adding to the sense of optimism, the US Federal Reserve left rates unchanged, saying that the world’s largest economy was showing signs of levelling out. Both France and Germany had been predicted by most economists to face a decline of about 0.3% in their GDPs for the second quarter (April-June) of 2009, but they surprised themselves and the rest of the world by announcing that they’ve actually recorded growth of 0.3% each.

Among the five largest economies of the world, measured in purchasing power parity (PPP) dollars — which is more of an apples to apples comparison — China and India are already growing at healthy rates, although lower than their own pace for the last few years. Japan too has climbed out of recession and so has Germany. These economies and the US account for 47% of world GDP in PPP terms.

The Eurozone as a whole is also now projected to have contracted by just 0.1% compared to the 2.5% fall in GDP in the first quarter (January-March). The growth rates reported by Germany and France may seem like nothing to get excited about, but considering that German GDP shrunk by 3.5% in the first quarter and France’s by 1.3%, it is quite a smart turnaround.

Among the world’s other large economies, Brazil is also now no longer in recession having grown by 1.5% in the second quarter.