Posts Tagged ‘WPI inflation’

Corn Futures Rose as Weaker Dollar Attract Buyers

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

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Corn Gains as Weaker Dollar, Last Week’s Slump Attract Buyers

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Corn Gains as Weaker Dollar, Last Week’s Slump Attract Buyers:

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Corn futures rose as a weaker dollar and the biggest weekly decline in 13 months attracted investors and importers.

Wheat and soybeans also rose.

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The dollar weakened as much as 0.2 percent against a basket of six major currencies, extending yesterday’s 0.3 percent loss and making U.S. supplies cheaper for importers.

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Nonghyup Feed Inc., South Korea’s biggest buyer of feed grains, bought 165,000 metric tons of corn for delivery between May and June, said two industry executives who took part in the bidding yesterday.

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Speculative net-long positions, the difference between investors’ orders to buy and sell corn, rose to an 18-month high during the four weeks ended Jan. 12, according to the U.S. Commodity Futures Trading Commission data.

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Short positions, or bets prices will fall, reached a three-year low in the week ended Dec. 29.

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In Other major Commodities Updates we can read that Prime Minister’s Economic Advisory Council is going to monitor impact of futures market trading on food price inflation.

Panel to monitor food futures:

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The Prime Minister’s Economic Advisory Council (PMEAC), headed by C Rangarajan, has asked the commodity futures market regulator to provide it with data showing the impact of futures market trading on food price inflation, said BC Khatua, chairman, Forward Markets Commission (FMC).

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FMC regulates commodity futures trading on four national and nineteen regional bourses.

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The government’s logic is that there would be more data to fall back on now since commodity bourses went live in FY05 than when the Abhijit Sen panel was constituted two and a half years after their inception to study the impact of futures trading on food price inflation.

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The blue ribbon panel led by Mr Sen submitted its report in 2008.

The report found no conclusive evidence of a link between futures trading and food price inflation.

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However, the FMC chairman and industry experts have in the past repeatedly drawn the attention of futures market skeptics to the fact that price of items that were banned from futures trading continued to rise even after the ban.

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Items which continue to remain outside the purview of futures trading include rice, tur, urad and sugar.

Items which were relisted are wheat, rubber, soya oil, potato and chana.

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Wholesale price index-based inflation increased by 7.31% in December 2009 from the corresponding month last year.

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Of this, food article inflation – food articles have a 15.4% weight in the wholesale price index–has risen by 19.17%.

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

RBI, Monetary Projections And Indian Economy

Hello Friends,

Just an extension of our previous blog ”RBI And Its Policies – Part 1″.

RBI, Monetary Projections And Indian Economy

RBI, Monetary Projections And Indian Economy

In this Blog we would touch upon the aspects as that of Monetary projection from RBI, assessment of economy scenario at present and relevance of RBI policy on economy.

Monetary projection:

For policy purposes, money supply (M3) growth for 2009-10 is placed at 17.0 per cent, down from 18.0 per cent projected in the Annual Policy Statement.

Consistent with this, aggregate deposits of scheduled commercial banks are projected to grow by 18.0 per cent.

The growth in adjusted nonfood credit, including investment in bonds/debentures/shares of public sector undertakings and private corporate sector and Commercial Papers (CPs), has been revised downwards at 18.0 per cent as in the Annual Policy Statement.

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Economy:

Since the last review in July 2009, there has been a discernable improvement in the global economy.

The recovery is underpinned by output expansion in emerging market economies, particularly in Asia.

World output has improved in the second quarter, manufacturing activity has picked up, trade is recovering, financial market conditions are improving, and risk appetite is returning.

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A sharp recovery in equity markets has enabled banks to raise capital to repair their balance sheets.

If we talk about the home country then there are definitive indications of the economy attaining the ‘escape velocity‘ and reverting to the growth track.

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The performance of the industrial sector has improved markedly in recent months.

Domestic and external financing conditions are on the upturn.

Capital inflows have revived.

Moreover activity in the primary capital market has picked up and funding from non-bank domestic sources has eased.

Liquidity conditions have remained easy and interest rates have softened in the money and credit markets.

Growth projection for GDP for 2009-10 on current assessment is placed at 6.0% with an upward bias, the same as the previous policy review.

But some darker parts also persist.

There are clear signs of rising inflation stemming largely from the supply side, particularly from food prices.

Private consumption demand is yet to pick up.

Agricultural production is expected to decline.

Services sector growth remains below trend.

Bank credit growth continues to be sluggish.

The central bank has warned of possible asset price bubbles, raised banks’ provisioning requirements for commercial real estate loans and lifted inflation forecast.

WPI inflation for end-March 2010 is projected at 6.5 per cent with an upward bias.

This is once again higher than the projection of 5.0 per cent made in the Annual Policy Statement in July 2009.

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Stay Tuned for more on the topic.

We would look into Monetary Policy stance, more facts about economic indicators and Analysis from the Analyst from monetary point of view.

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