Posts Tagged ‘France’

GUAR…… “U” TURN AHEAD

Guar gum enjoys prominent position in the exports of minor forest products. India exports guar gum in various forms to all parts of the globe. More than 80 per cent of exports of minor forest products are accounted for by guar gum.

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The government has appointed Shellac and Forest Products Export Promotion Council (SHEFEXIL) as the canalising agency for export of guar gum to Europe. “Guar gum exports to European Union, originating in or consigned from India and intended for animal or human consumption have been allowed subject to endorsement by SHEFEXIL.

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Around 90% of the total Guar Gum production is exported to countries like China,US, Germany and France.

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Sowing and Harvesting Season….

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The crop is sown from June and extends up to July. It is harvested from October and the peak arrival time continues till the end of December.

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Guar complex mostly follows the seasonal pattern in its movement, but quite volatile during March- September. As given in the above chart, guar seed prices tend to remain low during January, June and September months. The price movement starts its bull run from February, the time of lean arrivals & reaches its peak in the month of July. Later on, during August the reports of sowing come into scenario which affects the prices. The arrival pattern during October & December further brings the prices down.

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The early south- west monsoon forecasts and progress of monsoon from June to September influence the price movement. Later on, arrival pattern and demand from stockiest affect the prices.

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The Road Ahead: Considering the supply side in the current crop season i.e. October 2009-September 2010, production is estimated to be lower at around 3-3.5 million bags compared with 8.5-9 million bags in 2008-09. Carryover stocks of last year for Guar seed stands at around 3-3.5 million bags. Thus, total supplies for 2009-10 stands at around 6 million bags, which is far below the total consumption of 7-7.5 million bags. Guar gum stock with the stockiest currently stands at around 150,000 tonnes. Guar futures have already discounted by almost 15-18% since the beginning of the year due to slowed down off-takes by millers. They were not buying Guar seed at high prices as they have huge stocks of Gum & also due to huge disparity in the price of seed and gum.

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However, after the futures finishing their correction phase, the current scenario signifies that the stockiest have started stocking Guar seed at the current low prices on expectations that the prices would rise further due to a drop in output. However, further price rally would depend on the overseas demand for Guar gum which is expected to pick up which may lead prices to breach the level of 5100 in medium term.

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Stay Tuned for More Updates :)

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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Dollar Supremacy to End? New Global Reserve Currency to Set In ?

UN called on Tuesday for a new global reserve currency to end dollar supremacy. Is dollar Supremacy at risk?

UN called for a new global reserve currency to end dollar supremacy. Is dollar Supremacy at risk?

The United Nations has called on for a new global reserve currency to end dollar supremacy, which has allowed the United States the “privilege’’ of building a huge trade deficit.

“Important progress in managing imbalances can be made by reducing the reserve currency country’s ‘privilege’ to run external deficits in order to provide international liquidity,’’ UN undersecretary-general for economic and social affairs, Sha Zukang, said.

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Speaking at the annual meetings of the International Monetary Fund and World Bank in Istanbul, he explained:

“It is timely to emphasis that such a system also creates a more equitable method of sharing the seigniorage derived from providing global liquidity.’’

Greater use of a truly global reserve currency, such as the IMF’s special drawing rights (SDRs), enables the seigniorage gained to be deployed for development purposes,’’ he said.

The SDRs are the asset used in IMF transactions and are based on a basket of four currencies—the dollar, euro, yen and pound—which is calculated daily.

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China had called in March for a new dominant world reserve currency instead of the dollar, in a system within the framework of the Washington based IMF.

Beside this another worrying news for Dollar lovers is floating around that Arab states had launched secret moves with China, Russia, Japan and France to stop using the dollar for oil trades, though denied by many of arab states.

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Indian Small Car Exports to Europe Started Decreasing !

As scrap page schemes in several European markets are set to lapse,exports by Indian small-car producers have started declining.

As scrap page schemes in several European markets are set to lapse,exports by Indian small-car producers have started declining.

As scrap page schemes in several European markets are set to lapse by the year-end, exports by Indian small-car producers such as Maruti Suzuki and Hyundai Motor have started declining.

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However, on the back of incentives offered by Germany, France and the UK in order to help owners of older cars and vans buy new fuel-efficient vehicles these automakers saw exports increase 35-40 % in the last few months.

Moreover, Germany and Austria concluded their scrappage programmes and other countries are likely to end their schemes by December hence as exports to Europe start decreasing, Indian carmakers have started looking at non-European markets.

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Additionally, till September 30, Maruti Suzuki had exported over 58,500 units,
with A-Star accounting for 33,500 units,
Nissan Pixo at over 25,000 units and
other models contributing about 7,900 units
while its exports of 1.3 lakh units in 2009-10
against 70,023 units in the last fiscal year.

However, Maruti Suzuki’s exports is not likely to cross 1.16 lakh units this year as many European countries have withdrawn their scrappage schemes.

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On the other hand, Hyundai Motor India (HMIL) too benefitted from additional European export orders where more than 50% of their exports are targeted at European countries with Germany accounting for the maximum and aims to export about 2.7 lakh units in 2009-10 against 2.45 lakh units last year.

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Further, in order to qualify for the scrap page benefit, the emission levels in the new car should be below 160 g per km while Germany had created a € 5 billion fund for the old-car scrappage scheme, doling out € 2,500 incentive for a fuel-efficient new car.

France had set aside € 220 million, offering € 1,000 and a deferred tax benefit of up to € 5,000 for a new car.

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Read Full Story on Economic Times.

Positive Undertones in the Economy – Part 2 :)

Positive Undertones In The Economy

Extending to the yesterday’s post on the positive undertones of the economy in the markets and investors tips, here we coming up with the more factors which investors should use for picking up fundamentally good stocks.

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1. Reality companies hike rates by 15%

Reality sector is witnessing a substantial demand, especially in the mature markets, after the prices dropped a few months ago.

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With the gradual return of residential property buyers, prices in NCR and Mumbai areas have moved up 10-15%.

How long these prices will sustain is hard to determine, but this indicates the confidence of investors.

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2. India..in Better Position

India can be considered as “balanced” in terms of investment and consumption with savings rate of 35% and consumption of 65% of its GDP.

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The fastest growing China leans towards investment, whereas most of the western countries are weighted more towards consumption.

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If we compare India’s Sensitive Index with its other Asian peers, Sensex is valued at 17.6 times estimated earnings where as China’s Shanghai Composite Index trades at 22 times earnings and the MSCI Asia Pacific Index is valued at 24 times.

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So, India remains very attractive and it is an opportune time for Indian companies to grab market share.

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3. Developments in the rest of the economy 🙂

If we see the positive economic numbers across the globe, it seems that world economy is moving towards recovery.

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Australian economy surprised with a jump in growth in the second quarter.

US have witnessed a growth in the current quarter GDP, US manufacturing and housing sectors appears to be gathering pace, quarter’s results came better than expected.

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European economies like France and Germany continued their gradual emergence from the worst crisis in decades and company results showed an upturn.

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4. Concerns Over Weak Monsoon!

Everyone is expecting that poor rains would push up food prices in the short-term, due to the reduced yield of kharif crop and it would add to inflationary pressures.

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But at the same time, we should also know that Indian agriculture is not limited to agro commodities only, but it is well diversified into horticulture, livestock and fisheries and their share in total output of the agricultural sector is increasing.

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Total agricultural output accounts for only 18.5 % of the gross domestic product and the kharif crops like cereals, pulses and oilseeds account for only 20% of it.

Moreover, government spending in rural areas will mitigate the effect of diminished monsoon rains.

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So, Looking at the above factors, India growth story remains strong in the long run.

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So, one can go for the companies, which will benefit from “Economic growth” like power plants, roads, service providers like banking and engineering sector.

Thanks 🙂

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.

D-Street may inch towards consolidation: Analysts

Dalal Street

A wave of consolidation is likely to greet Dalal Street this week as concerns over rainfall shortage would pull down investor sentiments and keep the market under pressure, analysts said.

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“The market would remain range-bound and would look for a positive trigger amid the dampening effect on the possibility of a drought-like situation in the country,” Ashika Stock Brokers Research Head Paras Bothra said.

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Analysts also said there might be some positive bias in the movement of the market but absence of any major trigger might shift focus on the rain God.

“Delayed monsoon has made the market totally indecisive of the next move.

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The impact of drought would be felt in some time from now and that is holding back investor confidence to enter market,” SMC Capitals Equity head Jagannadham Thunguntla said.

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Besides, with the US economy showing signs of revival and Germany and France emerging out of the recession quicker than expected, analysts feel it could bring in a positive bias in the market.

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“As it is now a known fact that the major economies are pulling themselves out of the recession, I do not foresee any major collapse in the market in near term as it is all positive news around,” Bothra added.

The BSE Sensex gained 251 points, or 1.66 percent in the past week and closed at 15,411.63 points.