Posts Tagged ‘subsidy’

Banks Warned Regarding Insurance to Farmers

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

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Banks Warned Regarding Insurance to Farmers

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Banks Warned Regarding Insurance to Farmers:

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Severe action will be taken against banks if they adjust the amounts payable to farmers under crop insurance scheme (Rs. 801 crore) and input subsidy (Rs. 600 crore), against their old loan dues.

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Collectors have been asked to convene meetings of district level bankersโ€™ committees to warn them against withholding these sums, affecting sowing of fresh crops.

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Also, they have been asked to take steps for re-scheduling of crop loans in 1,068 mandals declared as affected by drought or floods.

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The conference also decided to provide road connectivity to all SC and ST habitations with Rs 1,200 crore available for the purpose, begin procurement of kharif produce to build up buffer stocks for subsidizsd schemes.

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Mr Rao said a decision was taken to announce a new tribal policy aiming at empowerment of the tribals.

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In Other major Commodities Updates we can read that retail prices have sugar have started showing some signs of moderation in the national capital of the country.

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Retail sugar prices moderate in Delhi, high in other cities:

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In some good news for consumers, retail prices of sugar which have climbed by more than Rs 6 per kg since January 1 have shown some signs of moderation at least in the national capital Delhi, which has been bearing the brunt of the price spike.

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Latest data from food and consumer affairs ministry shows that retail sugar prices in the capital, which had risen to almost Rs 47 per kg around January 15 has dropped by Rs 2 per kg to Rs 45 in the last couple of days.

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In other major cities though there is hardly any big change.

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In Jammu, government data showed that retail sugar prices have climbed by Rs 8 per kg since January 11, while in Lucknow prices have hardened by Rs 6 and in Jaipur, Aizwal and Dehradun prices have moved by whopping Rs 9 to Rs 10 per kg since January 11.

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Global cotton output may rise over 8%: ICAC

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

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Global cotton output may rise over 8%: ICAC

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Global cotton output may rise over 8%: ICAC


Cotton production world-wide is likely to rise by over 8% in the 2010-11 season on higher output in the US and China following high prices, a global cotton body says.

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The global cotton production in the 2010-11 season (October-September ) is projected at 24.1 million tonnes (mt), up 8.5% from 22.2 mt estimated for the ongoing 2009-10 season.

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Above figures were put forth by the International Cotton Advisory Committee (ICAC).

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According to ICAC, cotton production in China is likely to surge by a million tonne to 7.7 million tonne, while in the US it may climb by one tenth to 3 million tonne.

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However in India, production estimates are not changed much from 2009-10 season, it said.

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ICAC had earlier said that India is estimated to harvest 5.3 mt of fibre in this season.

Currently, harvesting is in progress across the country.

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In Other major Commodities Updates we can read about the news of fertiliser ministry urging the finance ministry to release the due subsidy payments and the decline of the natural rubber production rate, last year.

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Fertiliser ministry too seeks subsidy payments:

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The fertilisers ministry has urged the finance ministry to urgently resolve the liquidity problems faced by the countryโ€™s fertiliser industry following no payment of subsidy dues by the government since October 2009.

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The demand for subsidy payments comes even as the government is trying to resolve the issue of subsidy to petroleum companies.

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Industry estimates are that subsidy /concession for the October-March 2010 period will be around Rs 30,000 crore plus, bringing up the total subsidy for the fiscal to well over Rs 70,000 crore.

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The centre has allocated only Rs 49,980.25 crore towards fertiliser subsidy for 2009-10 (BE), including carryovers from 2008-09.

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The industry has argued that non-import of urgently needed raw materials and inputs may be jeopardized if the matter of the subsidies is not tackled on priority.

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Making matters worse, according to procedure, the industry cannot expect any further payment until the third supplementary to the Budget due only in end March.

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Rubber Output declines on dry weather:

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Natural rubber production in India, the worldโ€™s fourth-biggest producer, dropped 7.3 per cent last year after dry weather lowered yields in the main growing region, the state-owned Rubber Board said.

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The driest monsoon since 1972 lowered latex yield in rubber plantation in the southern Indian state of Kerala, Chandran said.

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Production also dropped because ofย  intense harvesting and ageing plantations,ย  Rubber Board Chairman Sajen Peter said on November 4.

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Stockpiles jumped 26 per cent to 261,400 tonnes at the end of December after exports last year slumped to 14,752 tonnes from 77,004 tons in 2008.

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Lower Output of Rice will Shift More Demand for Wheat

Hello Friends, just an extension of our previous blog โ€œwheat may move in range with up bias”.

Lower Output of Rice will Shift More Demand for Wheat

Lower output of rice and maize will shift more demand for wheat

Despite record wheat production in 2007-08, wheat consumption in 2008/09 is estimated to have declined to around 70.2 million tonnes from 76.2 million tonnes in the previous year due to high prices.

Domestic prices have shot up after a significant hike in the minimum support price discouraging consumption.

Highly subsidized rice distribution program of some state government also tempered wheat demand.

Domestic wheat consumption in 2009-10 is expected to rise by 70.2 million tonnes to 76.88 million tonnes ; likely decline in rice and maize production may lift wheat demand.

Export ban may continue, import at this juncture is viable

With bumper production and significant built up of stock wheat export was earlier estimated to be 2 million tonnes in 2009-10.

Even government relaxing ban placed in February, 2007 allowed two million tonnes of government-to government export.

But weak monsoon and poor sowing prospects of paddy forced
government to scrap government-to-government export allowed earlier.

It is likely that government would continue with its stance on export of wheat at least till the end of current marketing year.

After importing wheat in 2006-07 (6.2 million tonnes) and 2007-08 (1.8 million tonnes), India did not import any wheat in 2008/09 as the domestic supply situation improved considerably.

As domestic supply situation is comfortable, import is also not likely in the current season.

However imports are currently viable as international prices of wheat (equivalent to domestic mill quality) are lower.

Ukraine origin wheat is trading $ 180-200 per tonne and

Australian wheat is at $ 210-230 per tonne, while wheat prices on Southern India is at around $275-300 per tonne.

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In Next Blog, We would touch upon the aspects like Domestic and International price trend of wheat. demand and supply scenario in coming months, price trend and on Export Ban.

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Positive Undertones in the Economy โ€“ 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 โ€œbalancedโ€ 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 ๐Ÿ™‚

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 โ€œEconomic growthโ€ like power plants, roads, service providers like banking and engineering sector.

Thanks ๐Ÿ™‚

Positive Undertones in the Economy – Part 1 :)

positive undertones of economy

We had a positive Q1FY10 result, which boosted the sentiments of investors regarding the economic recovery.

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But are we actually out of it?

Though the earnings were encouraging but if we analyze it, the results had a โ€œbottom-line growthโ€โ€ฆ may be because of the lower costs of raw material, huge cost cutting, profit from other sources like stake sale or stock market trading etc.

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With lower interest rates, government spending in rural areas and lower base year, I am very much optimistic for Q2FY10 that these results would be โ€œrevenue drivenโ€.

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Top line growth is not only good for the company and stock market but also for the economy as a whole.

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Apart from the Q2FY10 numbers, there are positive undertones in the markets and investors should use these undertones for picking up fundamentally good stocks.

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Those are :

1. Measures for fiscal deficit

The GoI is taking several measures to reduce the fiscal deficit.

Disinvestment is high on the priority list.

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As private spending is increasing, Govt. is reducing need for stimulus.

A large part of deficit is contributed by the oil subsidy.

For this, the ministry of petroleum is lowering the subsidy burden in Kerosene and LPG.

Recently, improved tax compliance with new tax code and enforcement through the recently initiated Unique Identification Project are other steps to control the deficit.

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2. Accelerating production

India’s industrial production posted the fastest pace in the last 16 months in June, which shows that India has endured the worst of the global recession.

The reason can be low interest rates, which has given confidence to the consumers to borrow to buy vehicles or other factory-made goods.

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3. Capital flows to India

Another positive trigger can be the capital flows to India, which is expected to increase because of better medium-term growth and faster recovery prospects.

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The Q1FY10 early indicators suggest that NRI deposits, FII portfolio inflows and inward FDI flows have generally been strong, as compared to the net capital outflows witnessed in the last two quarters of 2008-09.

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4. Exports seen at $167 bn in FY10

For Indian Export Organisations, India’s exports are expected to touch around $167 billion, almost the same level of last year in FY10.

The commerce ministry looks ambitious and optimistic and has come up with foreign trade policy for the next 5 years, whereby; it aims to have an export of $ 200 billion by FY11.

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This will ultimately improve the declining trend of exports and will give thrust to employment-oriented sector like Textiles and Gem Jewellery.

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5. The New Tax Code

The new tax code has simplified the tax laws and will result in better compliance and a broader tax base.

The resulting incremental tax revenues will first reduce the fiscal deficit. This is a net positive.

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People, there are many other factors and Positive undertones in the economy which indicates towards the betterment of the economy and stock market.

We would come up with the rest of factors in Part 2 of the topic in next blog. ๐Ÿ™‚

Stay Tuned ๐Ÿ˜‰

India’s industrial production posted the fastest pace in the last 16 months in June, which shows that India has endured the worst of

the global recession. The reason can be low interest rates, which has given confidence to the consumers to borrow to buy vehicles

or other factory-made goods.