Posts Tagged ‘Indian Government’

Weekly Update 11th – 15th October 2010

Beside Indian market all global markets closed in green in the week gone by on the expectation of policy easing by developed nations. Central banks resorting to purchase of debt and currency intervention in developedeconomies is flooding markets with liquidity and funds are flowing to Asia for higherreturns. Fed Chairman Ben S. Bernanke has signaled that Fed may announce thepurchase of more Treasuries as soon as their next policy meeting in November in aneffort to boost growth and reduce an unemployment rate.

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The Bank of Japan said this week it will establish a 5 trillion yen ($61 billion) fund to buy government bondsand other assets. It also cut its benchmark overnight interest rate for the first timesince 2008, dropping it to a range of zero to 0.1 percent. Joining the league European Central Bank President Jean- Claude Trichet too said that ECB policymakers are in the “same mood” as a month ago and for now remain committed tophasing out their unlimited lending program.With the economic activity gaining pace, it is believed that Indian market wouldcontinue to see overseas buying. Moreover Indian government plans to raise $8.9billion in the year ending March 31 selling state assets including Coal India, Steel Authority of India Ltd. and Indian Oil Corp. thereby giving more investment opportunities to investors.

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While many developed nations are intervening in the currency markets in order tostem the appreciation in the currency, Indian Finance minister is of the opinion thatthe situation has not gone to an extent at which there is a need to restrict portfolio or foreign direct investment. As a matter of fact Indian rupee gained 4.5 percent inSeptember. Finance Minister said “We should try to engage the countries innegotiations and build up a consensus through which the matter can be resolved andit cannot be resolved through confrontation.” The International Monetary Fundraised its 2010 economic growth forecast for India to 9.7 percent from 9.4 percent,citing strengthening local consumer demand.

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Since we have already seen a huge run up in the broader indices meaning moreparticipation coming from large cap stocks so now going forward we may expectmore activity in mid and small cap stocks. The result season is starting in the comingweek and corporate would give their guidance for the rest of the year which wouldset the future undertone of the markets. Nifty has support between 5950-5870 and Sensex between 19640-19200 levels.What a stunning rally gold has enjoyed recently on fear of inflation. It has hit many records in fewer days.

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Silver was not behind, it made life time high of `34898 on MCX and breached the mark of `35000 in spot market. Talk of quantitative easing by US and rate cut by BoJ are creating anxiety over currency devaluation and long-terminflation is keeping gold and silver on remarkable run up. After witnessing the bigswings of both side, we can say that trend of crude oil is little bit in indecision mode.However, bias should be on upside. Michigan Confidence, CPI and advance retailsales data of US may further provide the direction to metals and energy. Industrialmetals which have made upper trading range last week, are likely to trade up onweakening dollar index.

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CASTOR SEED………. “Obsessed With Profit”

Castor, being a non-edible oilseed, has economic importance of its oil yielding seeds.Usage of castor seed products has grown tremendously over the years due to their biodegradable and eco-friendly nature. Looking at the profit it has given to the portfolio, it seems like the nature has blessed the investors, as if money sprouting out of the shiny seeds of castor plants.

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Consumption Pattern: The average Indian consumption of castor oil is 100,000 ton per year. The Indian variety of castor has 48 % oil content of which 42% can be extracted,while the cake retains the rest. On an average soap makers accounts for 25,000 ton while paint and allied sectors consumes 35,000 ton of the Indian consumption. In internal combustion engines, castor oil is renowned for its ability to lubricate under extreme conditions and temperatures, such as in air-cooled engines. The lubricants company Castrol takes its name from castor oil. Castor seed meal is offered in bulk & in plastic bags.

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Domestic scenario: India’s castor production fluctuates between 0.6 to 1 million tonnes a year. Castor is sown in August and harvested in Dec-Jan every year with majority of arrivals coming after February. Gujarat accounts for over 80% of India’s castor seed production, followed by Andhra Pradesh and Rajasthan.

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FACTS & FIGURES

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•Total area under Castor crop in India for the year 2009-10 is 7.40 lakh hectares. It has decreased by 10% as compared to previous year.

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•Estimated total production of Castor Seeds in India for the year 2009-10 is 9.34 lakh tonnes. It has decreased by 4% as compared to previous year.

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•Average yield for the year 2009-10 is 1261 kg/hectare as against 1180 kg/hectare during the year 2008-09. It has increased by 7% as compared to previous year.

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Kharif sowing: This kharif season the acreage under castor seed is far below the normal area of 8.130 lakh hectares. However, the good news according to the latest sowing data is that farmers have planted 1.252 lakh hectares which is more than the 1.115 lakh hectares covered at this time last year, are shifting from castor seed to cotton. The spurred kharif sowing figures of 66.090 lakh hectares under cotton as compared to 48.470 lakh hectares last year, itself depict that farmers this time have brought in more land under cotton. The reason being is the reaping profits from the later.

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EXIM scenario: Every month 40,000 tonnes castor oil and 5,000-8,000 tonne castor derivatives leave for foreign shores from India, From India castor oil is exported through mainly Kandla port. India exported more than 2.25 lakh ton castor seed till June this year compared to 1.22 lakh ton in same period of previous year. In May India exported 54000 ton castor oil. China imported 90000 ton castor oil in June only this year. Indian Government is providing 5% tax rebate to castor seed & oil exporter under Vishesh krishi and gram udyog yojana.

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…….. At the futures trade (Source: Forward market commission)

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•The Rajkot Commodity Exchange Ltd., Rajkot – The near month contract (i.e. June 2010) was quoted at its highest at Rs.3490/- per 100 kg on 30.6.2010 and at its lowest at Rs. 3159/- per 100 kg on 16.6.2010. During the fortnight, the total value of trade was Rs.354.95 crore. The net open position in the near month contract was at its highest at 25 MTs on 16.6.2010.

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•Bombay Commodity Exchange Ltd., Mumbai – The near month contract (i.e. August 2010) contract was highest price at Rs. 3522.00 on 30.6.2010 and lowest price at Rs.3256.00 on 16.6.2010. During the period, the total value of Castor seed was Rs.2.20 crore.

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Current scenario: Due do increase in demand in international markets, the prices of castor seed has increased by almost 15% recently and crossed the level of Rs 700/ 20 kg first time. Despite good monsoon in castor seed growing states the prices is not likely to go down as better demand from US, China and Europe.

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The snap shot of the future markets shows that the price is at a year high at Rs. 3748/ quintal giving a return of whooping return of 32% as on 13th July, 2010 from the year beginning. The forward month contract are in contango situation. The upward momentum can remain intact until the arrivals of new crop.

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After 20 Years, India to Import Rice

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

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After 20 Years, India to Import Rice

After 20 years, India to import rice:

India, a traditional rice exporter, will import the grain for the first time in 20 years to meet a projected shortfall of the crop hit by drought and floods, government said yesterday.

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The government estimates that there would be a shortfall of over 15 million tonnes in the 2009-10 Kharif (summer) season due to drought and floods in several states.

Thailand’s Foreign Trade department announced that the world’s biggest rice exporter is expected to release part of its huge stock of almost six million tonnes of rice stockpile to India, besides eight other countries, through g-to-g sales programmes.

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In Other major Commodities Updates we can see that the demand-supply gap for natural rubber in the country is set widen.

Demand-supply gap for rubber stretches:

The demand-supply gap for natural rubber in the country is set widen as production is expected to fall and demand set to rise above earlier stimates.

Rubber production for April-October period was 9.4 per cent lower at 4,35,125 tonnes against 4,80,230 tonnes last year.

Consumption grewn three per cent to 5,36,100 tonnes (5,20,375 tonnes).

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The production-consumption mismatch resulted in a sharp rise in imports and a corresponding fall in exports.

Imports increased 133 per cent to 1,26,472 tonnes (54,283 tonnes), while exports plunged 92 per cent to 3,859 tonnes (34,000 tonnes), sources in the Rubber Board said.

The Rubber Board has scaled down the production target for the current fiscal by 2.8 per cent to 8.40 lakh tonnes from the earlier estimates of 8.67 lakh tonnes announced in April.

The forward estimates of production has moved up 6.8 per cent to 9.31 lakh tonnes from the earlier estimate of 8.81 lakh tonnes.

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Note : For More Latest Industry, Stock Market and Economy News and Updates, please Click Here

Vegetable Prices to Ease by January : Planning Commission

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

Vegetable Prices to Ease by January : Planning Commission

Vegetable Prices to Ease by January : Planning Commission

Planning Commission Deputy Chairperson Montek Singh Ahluwalia Sunday said he expected vegetable prices to ease by January.

“At the end of a bad monsoon, the big pressure is on vegetables.

The annual inflation rate for food articles was sharply higher at 13.39 percent for the week under review.

Similarly, the annual rise in the index for pulses was 23.44 percent and that for cereals was 11.15 percent.

He also said that “By December-January, you will see at least something (fall in prices) for vegetables, there will be a different position,” Ahluwalia added.

“It (vegetable) is not something you can import, but in general, certainly in management of public distribution system, we are in a strong position as far as stocks are concerned,” he contended.

“There is more than enough food stock in the country. We do not have to worry on that score.”

The Reserve Bank of India and the government have both warned that India’s annual rate of inflation based on wholesale price index for all commodities would rise to 6-6.5 percent by March, while the Prime Minister’s Economic Advisory Council has pegged it at 6 percent.

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In Other major Commodities Updates we can see that NMCE has kick started trading in gold guinea contract. 🙂

NMCE kicks starts trading in gold guinea contract:

National Multi Commodity Exchange of India (NMCE), the first commodity exchange of the country, has started trading in gold guinea contract to reach to the masses.

The commex has tied-up with Muthoot Group to set up multiple delivery centres.

The guinea would be a Muthoot branded BIS certified serially numbered,available in a tamper proof packing.

The purchase/delivery of the gold guinea will be made available through the Muthoot Finance’s 22 centers across the country, which include Ahmedabad, Kolkata, Jaipur, Mumbai, Indore, Delhi, Rajkot, Kanpur, Lucknow in the North and Trivandrum, Kollam, Kottayam, Calicut, Chennai, Coimbatore, Madurai, Truichi, Bangalore, Mangalore, Hyderabad, Trichur.

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Note : For More Latest Industry, Stock Market and Economy News and Updates, please Click Here

Sweetness Of Sugar – Part 2 :)

Hello Friends, just an extension of our previous blog on Commodity Corner Series where we touched upon the aspects like seasonality,cyclic nature and analysis of price trend of Sugar.

Sweetness Of Sugar Part 2

Sweetness Of Sugar Part 2

Now we would read into the implication of falling production of sugar on stock market,market sentiment and the country’s import status.

Sugar Scrips Sweetens…

Falling production has sweetened sugar scrips.

Sugar stocks prices seems to remain strong for next three years.

The key drivers for such a strong up-cycle are:

1) Nominal production in current season as compared to consumption,

2) Lack of scope for further reduction in dealer stock level,

3) Increased cost of production as well as of import,

4) More sugar cane in India is being used to make jaggery that sells for almost double the price of white sugar.

In Diwali, sugar prices touched Rs. 35/ kg level.

This in turn helped all sugar companies to show growth as compared to current year’s net profit.

The most promising long positions and best return may be in sugar stocks like Shree Renuka Sugars and Balrampur Chini. Overall sugar stocks are bullish.

So take the best & calculated decision.

Imports Soaring……

For the 2009-10 crushing season (CS), the domestic and international price trends will depend on the production in Brazil, where producers should start favouring sugar over ethanol, as ethanol demand declines with falling crude prices.

With domestic consumption at 23 million tonnes for the next two years, & sugar consumption surpassing production, the country may import 3-4 million tonnes till September 2010.

The landed cost of imported sugar should be around Rs 19,000 a tonne. In the short term, the weaker USD will also support sugar.

The market seems to be in a set-up to move higher over the short run as India will continue to buy buying and the potential for imports will continue into 2009/2010 season.

……..Markets Bullish

Market sentiment has turned bullish, with the demand outlook boosted after the Indian government removed import duties.

A recovery in the world economy coupled with an increasing uptrend in these years leaves ahead sugar as a longer-term “buy and hold” commodity.

The factors that can determine the price direction for sugar futures in 2009 are:

1) If Dollar continues to rise in 2009, the upside potential for sugar could be limited,

2) Demand is a key factor for price direction,

3) A shift in acreage away from cane to crops like wheat, paddy and oilseeds as UP creating panic among farming community for Increase in cane payment arrears and delay in verdict on state advised price (SAP),

4) Mills are on the verge of early closure this season on limited availability of cane,

5) Government has come out with a policy to allow raw sugar imports to India,

6) Depreciating rupee and rising global prices, making sugar imports dearer & harden domestic sugar prices,

7) Greater diversion of cane towards the unorganized sector.

Concluding I would like to say that both the technical and fundamental outlook for the Sugar market appear to be bullish, but one is advised to trade with caution and stop losses.

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Note : For More Latest Industry, Stock Market and Economy News and Updates, please Click Here

Indian Govt to Negatiote with Swiss Banks over Secret Black Money Info !

black money

A day after Swiss banks said it will not allow India to ‘fish’ for details about illegal money stashed in their banks, Government Monday night said it was not interested in getting information on all secret accounts held by Indians but will pursue specific cases.

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Union Finance Minster Pranab Mukherjee on Monday said the Indian Government will look into the matter of Swiss banks rejection to hand over details of the Indian clients.

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“They (Swiss Bankers Association) have not refused (to divulge information). They have suggested they are not for fishing and we are also not interested in fishing their whole list (of bank accounts),” Mukherjee told reporters.

He also added, “We will also work on specific information and we will also like to follow the Organisation for Economic Cooperation and Development pattern.”

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Earlier India’s hope to acquire information on Indian black money stashed away in Swiss banks dealt a severe blow, with the latter refusing on Sunday to reveal any details, saying that “Swiss law and tax model convention don’t permit name-fishing expedition” by a third country.

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The blow to India came barely a week after Swiss banking giant UBS AG turned over details of 4,450 secret accounts to the United States, under an agreement agreed upon by the two.

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On the Other side, Government has come under attack from the opposition for not “properly” making efforts to unearth black money parked in Switzerland.

The BJP wanted the government to mount diplomatic pressure on Switzerland to get the details.

“When the US government can get the list of persons (who have illegally stashed money in Swiss banks), why can’t the Indian government…It is the responsibility of the government. How can there be double standards,” CPI(M) Politburo member Brinda Karat said.

JD(U) attacked UPA government accusing it of not “properly” pursuing the matter with Swiss authorites and “not actually wanting to do it”.

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The Congress defended the government saying it was doing all it can under its jurisdiction to get the black money out as it was an issue of public interest and concerned the common man.

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“They (Swiss Bankers Association) have not refused (to divulge information). They have suggested they are not for fishing and we are also not interested in fishing their whole list (of bank accounts),” Mukherjee told reporters.

Mukherjee said, “We will also work on specific information and we will also like to follow the Organisation for Economic Cooperation and Development pattern.”

Earlier India’s hope to acquire information on Indian black money stashed away in Swiss banks dealt a severe blow, with the latter refusing on Sunday to reveal any details, saying that “Swiss law and tax model convention don’t permit name-fishing expedition” by a third country.