Posts Tagged ‘oil’

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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Points Discussed in Budget :)

  • Excise duty on silver rose to 10%
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  • Surcharge on domestic cos reduced to 7.5% from 10%..
  • Excise duty on oil rose to 10%.
  • Fiscal deficit will be at 5.5% in 10-11, at 4.8% in 11-12 and 4.1% in 12-13
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  • Revised income tax slabs 🙂
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  • Net market borrowing for 2010-11 at Rs 3, 45,010..
  • Extended 1% interest subsidy scheme for affordable housing.
  • Rs 5400 cr of funds allocated for urban development..
  • Defense allocation rose to Rs 147344 cr.
  • Rs 48000 cr allocated for Bharat Nirman.
  • Farmer loans extended for 6 months to June 30th 2011.
  • Allocated Rs1.73 lakh cr for infrastructure..
  • Agriculture credit flow targets at Rs. 375000cr.
  • FDI worth $20.9 bn in April to Dec 2009.
  • Proposed Rs 16500 cr for PSU banks.
  • Challenge for a 9% growth, need to review stimulus.
  • Stay Tuned for More updates 🙂

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

    Political will needed to contain pulse price rise

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

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    political will needed to contain pulse price rise

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    Political will needed to contain pulse price rise –

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    As part of measures to curb price rise, the planning commission has mooted the idea of encouraging formation of pulses grower’s federation which will trade on commodity future exchanges.

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    The commission seems to believe such a trading plan will rein in price rise.

    Stagnant acreage, low yields  and unsteady output have characterized pulse production for over two decades.

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    On the other hand, demand for pulses has been rising steadily because of rising incomes and demographic pressure.

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    🙂

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    In Other major Commodities Updates, we can read that palm oil climbed to the highest in more than seven months.

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    Palm oil extends 2009 rally on crude oil rise –

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    Palm oil climbed to the highest in more than seven months, extending the best annual gain in 12 years, as gains in crude oil prices increased its appeal as a substitute used in biofuels.

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    Palm oil rallied 56 percent last year on rising demand from India and China, the top consumers, and amid tight supplies of soyabean oil because of drought in south America.

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    Oil surged 78 percent in 2009, the biggest annual advance in a decade, and soyabean oil rose 21 percent.

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    March delivery palm oil  gained as much as 1.2 percent to 2,696 ($788) a metric ton on the Malaysia derivatives exchange, highest since may 15 in intra day trading.

    It traded at 2,690 ringgit at 5:13 local time.

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    🙂

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

    Oil Prices Increased in Asian trade, Firmly Above $79

    As rising US energy demand helped sustain markets on the last day of 2009, oil prices increased in Asian trade.

    However, New York”s light sweet crude for February delivery, was up 50 cents to $79.78 a barrel while Brent North Sea crude for delivery in February gained 22 cents to $78.25.

    Meanwhile, a second consecutive week of falling energy inventories in the US boosted prices while declining stockpiles indicated rising demand in the US.

    The US Department of Energy (DoE) data showed crude inventories declining by 1.5 million barrels in the week ending December 25.

    On the other hand, due to increased demand resulting from cold winter weather gripping the US, distillates, which include heating fuel and diesel decreased 2 million barrels.

    In Other major Commodities Updates, we have news of High potato, pulses rates push food inflation to 19.83%.

    High potato, pulses rates push food inflation to 19.83%

    Due to rise prices of potato and pulses, food inflation increased to 19.83% for the week ended December 19.

    However, over the last year, potato prices more than doubled while pulses became costly by over 41% and onion rates rose by 40.75%.

    Prices of vegetables rose by 46.7% while fruits became dearer by 10.35%.

    Meanwhile, with bajra and wheat becoming costlier by 12% and 4% respectively, the rise in prices was significant on a weekly basis also, while rates of rice increased by 2%.

    Similarly, barley and urad rose by 1% each while prices of fruit and vegetables declined by 5 per cent on weekly basis.

    The food inflation had declined by 1.30% points to 18.65 per cent during the second week of December.

    On the other hand, among the non-food articles, raw rubber turned expensive by 3% and rape and mustard seed by 1% while the fuel index remained unchanged.

    Wheat Falls as Rally, Dollar Gain May Curb Demand for U.S. Crop

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

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    Wheat Falls

    Wheat Falls as Rally, Dollar Gain May Curb Demand for U.S. Crop:

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    Wheat dropped on speculation that a price rally to a three-week high and the dollar’s rebound may reduce demand for the U.S. crop.

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    Corn and soybeans also declined.

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    The grain yesterday jumped 5 percent, the most since Nov. 11, leading gains in corn and soybeans on speculation that fund managers will purchase agricultural commodities at the start of 2010, anticipating improved demand as the global economy strengthens.

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    Wheat for March delivery declined as much as 1 percent to $5.45 a bushel on the Chicago Board of Trade and traded at $5.4575 as of 10:49 a.m. in Tokyo.

    The contract yesterday touched $5.51, the highest level since Dec. 8.

    The grain has lost 11 percent this year.

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    🙂


    In Other major Commodities Updates, we have news of edible oil industry, urging a tightening of futures trading in oils and oilseeds.

    Industry wants tighter oil, oilseeds futures norms:

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    With oilseed crushers feeling the pinch on their margin due to rise in oilseed prices, which, they feel, have been fuelled by speculations in futures trading, the edible oil industry is urging a tightening of futures trading in oils and oilseeds.

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    Raising the issue, the Solvent Extractors’ Association of India (SEA) has suggested the Union consumer affairs ministry that new futures contracts for oilseeds should be restricted to current plus one month only.

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    As for existing futures contracts for the next six months, the traders should be asked to square them off on the date of settlement next month.

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    Moreover, all contracts have to be backed by a minimum quantity of delivery, suggested SEA.

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    It has further requested the ministry to enhance the margin on trading to such a level, which would discourage speculators entering into this arena.

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    🙂

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

    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.

    🙂

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

    Coconut Development Board Urges Govt to End Dependence on Import

    On Wednesday, the Coconut Development Board organized a seminar and the main discussion over there was the hurdles in boosting production of coconut in West Bengal.

    Mr Sugata Ghose, Director, Coconut Development Board, identified several factors responsible for poor production of coconut in the State.

    They included lower oil content of copra, little headway in the effort to produce high copra yielding coconuts, limited production of coconut on commercial scale, difficulties in procuring good copra from the Andamans due to restriction on the export of copra from the islands and from Kochi due to high transportation cost and, last but not the least, absence of awareness of the local people about the potential of the coconut crop.

    “A few months back, Coconut Development Board has been notified as Export Promotion Council for coconut products and keeping this in view, we’re trying to involve coconut growers, coconut oil millers and coconut product manufacturers not only to step up coconut processing in West Bengal but also to boost production of value-added and processed coconut products in the country,” Mr Ghose observed.

    Mr Ashok Sethia, President, the Solvent Extractors’ Association of India, said that the overdependence on imported oil totally neglecting local growers and the local oil industry was a dangerous policy being pursued by the government.

    Oil Climbed Higher in Asian Trade

    Oil increased in Asian trade on expectations a widely monitored US report would show a drop in fuel stocks while New York’s main contract, light sweet crude for December delivery, gained 50 cents to $79.64 a barrel.

    However, Brent North Sea crude for January delivery put on 73 cents to $79.70 a barrel while the weekly Department of Energy (DoE) report is expected to show a drawdown in storage of distillate fuel, which includes heating oil and diesel.

    Meanwhile, a Dow Jones Newswires poll of analysts forecast that distillate fuel stocks will decline by 500,000 barrels in the past week while crude reserves are seen slipping by 600,000 barrels.

    On the other hand, it is said that the drop in inventory levels can be exacerbated by Hurricane Ida, which weakened to a tropical storm but led to closure of some petroleum installations in the Gulf of Mexico.

    The US is the world’s biggest energy user and is seen as key to lifting oil demand which has been hit by the global economic slump.

    Nifty, Sensex at New Peak Ahead of Diwali :)

    Nifty, Sensex at New Peak Ahead of Diwali

    Nifty, Sensex at New Peak Ahead of Diwali

    As China’s economy showed more signs of revival and weak dollar raises commodity stocks,  Global Stock Markets increased while the Sensex Index gained 204 points to close at 17,231.

    🙂

    However, on the NSE, the Nifty advanced 64 points to end at 5,118, its highest level since 16 May 2008 when it closed at 5,157.

    Moreover, the BSE metal index increased 5.2%  while Sesa Goa rose nearly 14% and JSPL rose 8%.

    Additionally, the BSE capital goods index was up 2.4% and the BSE auto index gained 2.3%.

    🙂

    In the Capital goods space, Punj Lloyd advanced 7.3%, Praj Industries rose 5.7% and Themax ended 4% higher.

    Similarly, among the auto stocks, M&M, Bharat Forge and Exide Ind gained over 5% each.

    In the Sensex pack, 25 stocks increased while 5 counters decreased.

    M&M surged 6.1% to Rs 971 and Sterlite Ind, Hindalco and JP Associates were up over 5% each.

    🙂

    Moreover, RCom emerged as the top loser while the stock declined 6.5% to Rs 231 in the midst of reports that special auditor has pointed out that the company inflated revenues by
    Rs 2,915 crore
    in 2007-08 financial year.

    Further, Bharti Airtel shed 3.2% while Reliance Infra fell 2.6% and previously, in Asia, China’s Shanghai index jumped 1.2% enhancing more by expectations for better corporate earnings for Q3.

    On the other hand, Hong Kong’s Hang Seng rose 2% while Japan’s market was the region’s only major laggard with the Nikkei 225 stock average shedding 0.2% to 10,060.21 in the midst of a stronger yen.

    In the meantime, the dollar resumed its slide, falling to a 14-month low against the euro pushing prices for commodities like oil and gold ever higher.

    🙂

    As IPO Market Falters,Companies Eye New Funds !!

    Market falters

    The post-listing dismal performance of the initial public offering ( IPO) of public sector power major NHPC Ltd is set to force many companies to rework their fund- raising strategies in the coming months.

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    Qualified institutional placements (QIPs), global depository receipts (GDRs) or those shares issued to overseas investors and listed on exchanges abroad are likely to be the most favoured means for these purposes, leading investment bankers said.

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    Some of the companies are already planning to revise their issue prices downwards to ensure that offerings will not fall through.

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    Oil India Ltd (OIL), which is open for subscription now, is the first to draw lessons from the NHPC episode and revise its issue price.

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    OIL has revised their price band to Rs 950- 1,050 per share, from Rs 1,250- 1,400, after the NHPC episode as per few bankers.

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    NHPC fixed the price of its IPO at Rs 36 per share last month.

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    Though the stock listed on September 1 at eight per cent premium to the issue price, at Rs 39, it closed just 70 paise or 1.94 per cent above the issue price.

    Over the last two days, the premium further narrowed to just 10 paise.

    😦

    Jagannadham Thunuguntla, equity head of SMC Capitals Ltd, cites heavy selling, coupled with no follow- up buying as the reasons for the lacklustre listing of NHPC.

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    NHPC’s IPO price was 30 times its earnings per share (EPS).

    “In fact, well- established companies like NTPC are available at much lower valuations. Hence, there was no follow- up buying from the investors on NHPC listing,” Thunuguntla explained.

    🙂

    Further, majority of the oversubscription is not due to genuine investor interest but is due to the borrowed funding through ‘IPO financing“.

    Naturally, all such investors were forced to sell on the day of listing as these involve a lot of interest cost. This resulted in heavy selling on the day of the listing,” he added.

    😦

    After the market rebound since March 2009, fundstarved companies started tapping the market.

    And when the elections gave a more convincing victory to the UPA combine, the market gathered greater strength.

    Since March, companies were able to raise funds to the extent of Rs 21,191 crore through 22 QIPs; and $ 1.88 billion through four GDRs/ ADRs (funds raised from US- based investors and listed in the US).

    🙂

    However experts maintained that these are the sources of funds for which few institutional investors are to be convinced, rather than working on creating confidence among the whole investor community.

    At the same time such companies should have a high corporate governance track- record as well.

    🙂

    price band