Posts Tagged ‘food prices’

Petrol Prices to be Revised Uniformly

The government owned oil marketing companies – Indian Oil, Hindustan Petroleum, and Bharat Petroleum – will be reviewing petrol prices on a monthly basis, and any decisions regarding changes in prices will be on consensus basis within the public sector. This means that petrol prices will be uniform at the retail pumps of public sector companies. Private companies may however choose to differ.

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However, the government has made it clear that it will not be completely deregulating diesel prices for now. It had hiked diesel prices by Rs 2 last month while petrol prices were made market determined. Earlier it was expected that despite diesel prices still involving a subsidy of around Rs 2, they will too move in tandem with crude oil prices.

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A lot of political opposition to the move along with increasing inflation may have been responsible for the retreat by the government. Diesel is used largely by the transport sector as well as the farm sector and a further price hike would therefore push up prices of almost all other products. The government is already struggling to tackle surging food prices and therefore probably wants to wait till the inflation comes down.

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The decision was taken at a meeting called by the petroleum secretary S. Sundareshan to deliberate on price revision frequency and also on how the publicly owned OMCs will coordinate on the matter. “Petrol price will be reviewed monthly after a mutual consultation among the three (government owned) oil marketing companies. There is no need for revision of prices now. We will follow this mechanism for three months from now,” said Indian Oil director S V Narasimhan after the meet.

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There will be no revision however for the current month. Also, the oil companies have not announced any particular date for price revision to prevent any hoarding by the black marketers, who may try to store the petrol in anticipation of a fuel price hike and result in problems for masses.

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With regard to the determination of price of diesel the Petroleum Secretary said, “Right from the beginning we have been saying that the price of petrol will be market-determined and the oil companies will take the decision themselves. The decision of oil companies would be based on factors like what is the competition doing and whether prices will be determined jointly or on individual basis.”

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On issue of whether the private companies like Reliance Industries and Essar too will harmonise their decisions with the government OMCs he said, “We are given to understand that everyone has adopted a wait and watch policy for next few months until the situation stabilises. At present, there is no scope for price revision of petrol.” He also categorically stated that “government was not thinking on revising diesel prices for now.”

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With regard to another crucial aspect of oil sector, the sharing of subsidy burden between companies and government he said that for the first quarter of 2010-11, the upstream companies such as ONGC and Oil India will shoulder a burden of about Rs 6,000 crore. The total under-recovery for the quarter is expected to be about Rs 20,000 crore.

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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.

Rajasthan Exempts VAT on Sugar

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

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Rajasthan exempts VAT on sugar

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Rajasthan exempts VAT on Sugar:

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Now sugar would be cheaper by Rs 2 in Rajasthan.

Rajasthan government has decided to exempt VAT on imported sugar in the state till June 30.

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This will help in reining the spiralling sugar prices in a week’s time.

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“The state imposes 4% VAT on sugar. With this exemption, the prices will go down by Rs 160 per quintal,’ says a government official.

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According to Indian Sugar Mills Association, the world sugar economy is facing significant gap between world consumption and production for the second consecutive year.

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The first revision of the world sugar balance for October 2009 to September 2010 puts world production at 159.887 million tonnes, raw value, up by 6.911 million tonnes or 4.5% from the last season.

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The global use of sugar is expected to reach 167.134 mn tonnes.

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Therefore, the world statistical deficit is expected to reach 7.247 million tonnes as against 8.404 million tonnes projected in September 2009.

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Sugar Trade Association of Rajasthan secretary Ballabh Kabra said that this decision can make way for sugar mills to buy imported sugar. “This is the first step to cool down the prices.

We are waiting for government’s nod for importing sugar on our own.

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Sugar prices in Rajasthan are hovering around Rs 41- 43 a kg.

Apart from 4% VAT, sugar attracts mandi tax of 1.6% and an entry tax of 0.25% in Rajasthan,” he said.

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In Other major Commodities Update, we have news about the easing of food prices in coming days as signaled by the Food and Agriculture Minister Sharad Pawar.

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Food prices to ease next fiscal: Pawar

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Food prices are expected to decline in the next fiscal on the back of higher farm output and the only worry then for the government would be on storage, Food and Agriculture Minister Sharad Pawar has said.

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He, however, said that the country would remain import dependent when it came to pulses and edible oils for the next 10 years.

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On the possibility of prices coming down in the next financial year beginning April one, Pawar told in an interview to a news channel: “100 per cent”.

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In 2011-12 the problem which the government of India will have to worry about (is) what to do and where to store”.

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Food inflation touched 17.40 per cent for the week ended January 16 on account of high prices of vegetables and pulses.

On controlling prices of pulses, the minister said.

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At 19.95%, Food Prices at 10-yr High

Hello Friends here we come up with the Latest Agri Commodities updates across the globe.

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At 19.95%, food prices at 10-yr high

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At 19.95%, food prices at 10-yr high

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“Save people from price rise” cry got louder with a parliamentary panel asking the Manmohan Singh government to act on speculative trading and hoarding of commodities.

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He was also asked by panel to end the diversion of agriculture land for manufacturing,  as food prices rose to a decade-high of 19.95% for the week ended December 5.

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Prices, mainly that of food articles, are zooming because of a fall in production due to the worst monsoon in about three decades.

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The supply shortfall is getting amplified, with traders pushing up prices with cheap money, as central banks, including India’s, are keeping policy rates at record lows to prevent economies from falling into depression.

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Potato prices more than doubled in the week ended December 5 from a year earlier, vegetable prices climbed 41.09%, pulses price rose 40.1% and wheat advanced 13.9%, the government data showed.

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In Other major Commodities Updates, Sugar output in India has declined owing to drought in India.

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Drought lowers sugar production by 9.6% :

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Sugar output in India, the biggest grower after Brazil, fell 9.6% in the first two months of the season that began 1 October, said an official at the Indian Sugar Mills Association.

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Mills produced 1.7 million tones (mt), down from 1.88mt a year ago, as drought hurt the cane crop and a price dispute delayed crushing, the official said.

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He didn’t want to be identified as the information was not public.

Mills reported lower sugar recovery than a year earlier, he said.

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Separately, the government has asked states to help lift stocks of imported sugar, which have filled up warehouses, junior farm minister K.V. Thomas said on Thursday.

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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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Food Inflation at 17.5%, Households Pay Price

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

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Food inflation at 17.5%, households pay price

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Food inflation at 17.5%, households pay price:

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The government on Thursday said that the average wholesale price of food items had increased by a whopping 17.5% in the past one year.

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The figure was 15.6% a week ago.

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RBI to shift to a tighter money policy,which in turn would lead to a rise in interest rates.

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The Centre has blamed this year’s poor monsoon for high food prices.

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It also put the onus on state governments to control prices through better management of food supply through ration shops.

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In Other major Commodities Updates, we bring you the news of Govt opting for transgenic tech to boost pulses production and Natural rubber prices going double in a year.

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Govt looks to transgenic tech to boost pulses production:

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The Union government is drawing up a comprehensive programme to introduce transgenic technology to improve the productivity of pulses.

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Bt refers to a gene sourced from a soil bacterium that is transferred to plants and acts as an insecticide.

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The Bt gene activates a toxin that kills a class of pests largely responsible for damaging plants and, thus, denting yields.

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They are genetically low yielding and less responsive to inputs compared with other cereals and oil seeds.

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Not only are they more prone to pests and diseases, hybrids and genetically modified varieties are not available to enhance productivity.

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The agriculture department has said it plans to increase pulse production by 2 mt and acreage by 4 million ha by 2012.

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Natural rubber prices double in a year:

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The natural rubber (NR) prices have almost doubled in a year.

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The benchmark grade RSS-4 variety was quoted at Rs 128 a kg on Thursday compared with Rs 65 a kg on same day last year.

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The rubber market is now poised to break all records despite good production this season.

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The local market follows its global peers resulting in a sharp increase in the prices in the futures trading.

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According to Rubber Board estimates, production in November increased to 103,000 tonnes compared with 95,550 tonnes in the same month last year.

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Production is expected to be at its peak in this month due to the winter season and supply is expected to improve further.

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The board estimates also revealed that the total stock in the country increased to 247,000 tonnes.

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This is due to the sharp increase in imports and a drop in exports during April-November.

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POTATOES … GOOD SOURCE OF VITAMIN M (MONEY) – Part 1

POTATOES ………. GOOD SOURCE OF VITAMIN M (MONEY)

POTATOES ………. GOOD SOURCE OF VITAMIN M (MONEY)

Commodity Check :

Potato is probably the most popular food item in the Indian diet. Potato is a very rich source of starch. It also contains phosphorus, calcium, iron and some vitamins.

Indian Scenario

India is the third largest potato-producing country in the world, after China and Russia,with a total acreage of 14 lakh hectares, producing 250 lakh tonnes of the crop.

Potato is cultivated both as a Kharif & Rabi crop, under assured irrigation during short winter days from October to March.

Potato cultivation is more concentrated in the Gangetic plain comprising Uttar Pradesh, Bihar and West Bengal.

Price Movement

The price of potatoes from UP, Haryana and Punjab in the four key wholesale mandis of Delhi, Azadpur, Okhla, Keshavpuram and Ghazipur, ranges from Rs 10 per kg to Rs 16per kg, up from Rs 6-15 per kg a couple of months ago.

The prices, however, saw an up-trend touching highest in the last five years, at Rs.1,400 per quintal (100 kg) owing to poor production in the neighboring states of Bihar and West Bengal.

The current potato prices in the market are reigning between Rs.1,400 and Rs.1,700 per quintal.

The horticulture department expects the acreage to rise to 545,000 hectares this season in the backdrop of bullish prices.

The farmers would prefer potato since this would fill in their paddy losses without affecting their rabi wheat crop in winters.

The trend could again result in windfall production of potato next year, causing severe storage problems, as was the scenario last year.

Last year, the prices nosedived so much that the cold storage had no space and the crop was forced to lie on roads.

Prices…. Fireworks

Food prices are likely to go up in the coming weeks as floods in the southern states of Karnataka and Andhra Pradesh have destroyed crops.

Due to crop failure in states like Maharashtra, West Bengal and Karnataka, the potato crop output this year has fallen by about 20%.

The common man has been hit hard by the rising prices of potatoes and vegetables which have soared by 81% and 43% respectively in the past one year.

The prices are unlikely to come down before December as new crop is likely to arrive only in late November, which will then ease the supply pressure.

Rising prices of other vegetables are also providing support to the potato market. The potatoes available during April-October period are largely supplied by cold storages.

About 16-17 MMt of potatoes are estimated to have been stored from 2008-09 crop to meet the demand in lean season.

According to the Nasik-based National Horticultural Research and Development Foundation (NHRDF), potato production in 2009-10 is estimated to be about 31 million metric tonnes (MMt), same as last year.

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