Cotton Export Ban Was To Avoid Its Shortfall - June 29, 2010

Today the Union Textile Minister, Dayanidhi Maran, said that the ban on cotton by the government was imposed in order to cut down the prices of cotton and as well as to ease the situation for the country to avoid scarcity of inputs.

Meanwhile, he said that the ministry will re examine the situations once the cotton flow starts perking up in the approaching season.

On the other hand the lack of availability of cotton in Pakistan led to shut down of number of spinning mills, he said. However the other segments of textile in Pakistan, like weaving and knitwear were forced to surge their production.

Moreover till now, 7.8 million cotton bales has already been shipped by India out of the country and the farmers have fetched considerable prices, which were on the higher side of the MSP fixed by the government, he added.

On the other hand the state trading agency NAFED has invited tenders for the sale of 38,000 bales of FP H4/H6 SUP CONV cotton, stored in various state-owned godowns across Maharashtra.

Mr. Maran further said that the total cotton that is available cannot be utilized as the spinning sector in India does not have enough capacity. Therefore, the sector in order to absorb this unutilized cotton needs to bed in more spindles.

Meanwhile in a meeting that was held to deliberate on trimming down the cotton yarn prices, the minister remained present with the representatives of the textile industry, which included Confederation of Indian Textile Industry, Southern India Mills Association, Apparel Export Promotion Council, Tamil Nadu Spinning Mills Association and Tirupur Exporters' Association.

Gold Falls On Weak Global Cues : June 25, 2010

Today the prices of gold in the national capital fell by Rs 70 to Rs 18,900 per ten grams due to reduced off take at existing higher levels amid a weakening global trend. Following the yellow metal, silver also fell by Rs 250 to Rs 29,600 per kg due to the reduced off take by industrial units and coin-makers.

Moreover the weakening of gold in the Asian markets led to bearish trading sentiments back home. Today the gold weakened in Asian markets on speculation that the investors are likely to sell and lock-in gains following a rally in prices of the precious metal in international markets to the record level of $1,266.50 on June 21.

Further the trading sentiments were hampered due to the reduced off take by retail customers in domestic markets at the existing higher levels. It was also seen that the gold prices in international markets also fell by 0.3 % to $1,233.5 an ounce. The domestic market gold prices are usually set on the basis of the prices of gold in overseas markets.

Meanwhile the gold of 99.9 per cent purity and 99.5 per cent purity fell by Rs 70 each to Rs 18,900 and Rs 18,800 per ten grams respectively. However in yesterday's trading they had gained Rs 120 each.

On the other hand the sovereigns remained steady at Rs 14,650 per piece of eight grams in restricted buying.

Similarly silver ready fell by Rs 250 to Rs 29,600 per kg and weekly-based delivery by Rs 318 to Rs 29,282 per kg. Meanwhile, there was no change in silver coins and it continued to trade at the previous rate of Rs 34,500 for buying and Rs 34,600 for selling of 100 pieces.

However the rupee plays a pivotal role in determining the landed cost of the yellow metal, which is quoted in dollars.

Moreover the India's gold demand has witnessed persistent weakness since May and the trade expects it to tumble by half in June.

On the other hand a trade body said that the gold imports into India may fall to less than 15 tonnes from 29.9 tonnes a year earlier as due to the higher prices and the onset of monsoon which may knock down the demand.

Naxals, Green Issues Hit Coal Projects : June 24, 2010

The Naxal-infested states are finding it difficult to implement new coal projects and carry on the expansion of its existing ones as it have been adversely affected due to deteriorating law and order situation in these states.

Moreover the coal ministry has informed the centre and had expressed a serious concern over Naxalite activities and the deteriorating law and order situation in coal-rich states of Jharkhand as well as Chhattisgarh, Orissa and West Bengal. While the state government has been asked by the ministry to play a more active role to address these issues.

Moreover the ministry has noted that the coal mining operations has been severely affected due to the poor law and order in many states and especially in Jharkhand, Chhattisgarh, Orissa and West Bengal. On top of this the illegal mining has further hampered the construction of much-needed infrastructural facilities such as roads and railways.

Meanwhile the coal ministry said that during the 11th Plan period 141 projects had to be taken up but till now only 75 had been approved and were in different stages of implementation. These projects are mainly to come up in Jharkhand, Chhattisgarh, Orissa, West Bengal, Maharashtra and Madhya Pradesh and are expected to be delayed if the law and order problem in these states worsens.

Beside the Naxal problems, the projects were either held up or delayed due to land acquisition problems.

Moreover the coal India alone in the 11th Plan was about to acquire 62,000 hectare of land for coal projects. However in the first two years of the Plan period, 3,293 hectare had been acquired.

Meanwhile, for environmental clearances, the coal ministry has made a strong pitch within 210 days and 150 days for forestry clearances by the Ministry of Environment and Forests and coal-producing states.

Wheat, Maize Prices Increased On Fresh Buying : June 23, 2010

Today the fresh buying activity in the wholesale grains market led the wheat dara and maize prices to gain upto Rs 10 per quintal. However the prices of other commodities moved in a tight range on alternate bouts of trading and pegged around previous levels.

As per the marketmen the maize prices gained fresh ground as there was fresh buying against the limited arrivals. Moreover it was noted that the wheat dara for mills traded marginally higher by Rs 5 to Rs 1,240-1,245 per quintal, while atta chakki delivery traded higher by the same margin at Rs 1,245-1,250 per 90 kg.

Beside this adding to the gain of Rs 10 was also the demand from consuming industries.

FCI Faces Problem With Low Offtake, Surplus Wheat Stock : June 17, 2010

Food Corporation of India is battling the problem related to shortage of storage place for 17.8 million tonnes of wheat in the major producing states of the north. Beside this the other problem faced by FCI is the sluggish offtake due to which there is surplus of wheat stock. Moreover the monsoon season is about to begin and hence the timely evacuation of wheat to dry places with suitable storage facilities is a must. On the other hand the response from the private companies for setting up storage facilities in the northern states is tepid and has put state agencies in a fix.

Moreover it is noted that for the total requirement of over 17 million tonnes, till now FCI has been able to generate proposals from private companies for only about 1.2 mt in Rajasthan, Punjab, Karnataka, Tamil Nadu and Kerala that too for open plinths and not for godowns as the cost of putting up a open plinths is Rs 300 to Rs 600 per tonne as compared to setting up a godown which cost about Rs 3,500 per tonne plus other costs.

As per the FCI, the wheat can be stored in open plinths for three years but the scientists on the other hand do not think the same way.

Mr. Jag Sheron who is an officiating director of the Wheat Research Institute, Karnal, said that if the wheat is stored in the open plinths and the moisture levels is over 12 per cent in the atmosphere then the wheat will be damaged.

He further said that in the monsoon season the humidity levels in the north reach 75-80 per cent. Once the season is over the sate agencies before selling to millers dry it in the sunshine. It is further dried by the miller by passing hot air but these wheat is not good for consumption. Mr. Sheron said that wheat grains that are exposed to moisture and sunshine repeatedly due to lack of proper storage facility becomes toxic and that is the reason why silos are recommended world over for safe storage of wheat.

He added that though India is spending Rs 5,000 crore per annum on handling of food grains but does not have a focus on investing in scientific storage.

Rotting Onions May Push Up Prices : June 16, 2010

The prices of onion is once again going to make the Indian consumers to cry from July as the intense heat has led the onion to rot in Maharashtra cold stores. The supply in Maharahtra decides the prices of onion nationwide as it is India’s largest onion-growing state.

The onion stocks are stored to make use in the rainy season as during this period there is no fresh onion crop in the country. Moreover the estimates show that out of these stocks around 25% has rotted due to intense summer heat in the onion-growing states.

However the actual damage figures will be known after the government agencies come out with the surveys but still the damage could range between 25% to 35%.

On the other hand it is seen in the Nashik district which is the bowl of India’s onion production that the farmers over here are finding onions stored in field storage structures rotten from within. The bulb size in Punjab, Haryana and Maharashtra has remained medium due to the scorching heat.

A farmer named Rajesh Ahire from Malegaon taluka in Nashik district said that already the half of his 300 quintal onion stored in the storage has got rotten. Similar was the situation of Gajendra Pawar, a farmer from village Bhavur in Satana who said that he could save only 5 trolleys of onions of the 35 he had produced this year.

Apart from onion the heat has also spoiled the garlic production. It is estimated that over 20% of the garlic crop, which is grown only during the rabi season and is stored by farmers as well as traders, has become unfit for use. Almost 2 lakh quintals are feared to be lost out of the estimated garlic production of 10 lakh quintals.

Although the fresh garlic has arrived in the market but still the wholesale prices of the commodity are ruling in the range of Rs 60/kg to Rs 100/kg across India and are likely to touch Rs 150/kg in the near future. At present the garlic is being sold at average Rs 100/kg in the retail markets.

Meanwhile a field assessment of the situation will be undertaken by the National Horticulture Research and Development Foundation (NHRDF) which is the national agency for onion, garlic and potato research. The NHRDF has advised the farmers to not store inferior quality onion in the storage and the exporters has been also informed about this problem.

Dr Satish Bhonde, NHRDF additional director said that the extent of damage will play a major role in deciding the supply situation in the future. He added that supply situation may become critical in August –September period.

He further said that states such as Rajasthan, Gujarat and Uttar Pradesh which suffered intense summer will see the onion crop to be affected.

Turmeric Futures Gain On Exports Demand : June 11, 2010

Supported by the overseas trend, the turmeric futures traded higher by Rs 90 or 0.62 per cent at Rs 14,594 per quintal in futures trade, after traders increase their positions.

However, the expectations of higher acreage followed by reports of normal monsoon rains, limited the gains in futures trade.

At the National Commodity and Derivatives Exchange (NCDEX), the turmeric for delivery in June contract traded up by Rs 90 or 0.62 per cent at Rs 14,594 per quintal, with an open interest of 8,910 lots.

Moreover, the spice for delivery in July-month contract rose Rs 72, or 0.50 per cent at Rs 14,440 per quintal, with an open interest of 5,355 lots.

While, on the other hand, the chilli prices fell by Rs 56 or 1.22 per cent to Rs 4,546 per quintal in

At NCDEX, the chilli for current-month June contract dipped by Rs 56, or 1.22 per cent to Rs 4,546 per quintal, with an open interest of 4,320 lots, while the delivery in July contract held steady at Rs 4,746 per quintal on thin trade.

Gold Price Would Be Declined : June 10, 2010

There could be a decline of up to 20 per cent in the gold prices if there is an improvement in the euro zone debt crisis, a top official of MMTC said.

Commenting on this, Chairman and Managing Director Sanjiv Batra told reporters “There can be a correction of 10-20 per cent (in gold prices) if there is an improvement in the European markets”.

MMTC is the country’s largest importer of gold.

Batra also pointed out that there could be a decline in the gold import in the next few months if rates of the precious metal remain high.

India imported 738.81 tonnes of gold in the last fiscal i.e. in 2009-10, out of which 186.83 tonnes were imported by MMTC.

Meanwhile, the company plans to import 200 tonnes in this fiscal.

Gold prices touched a new high of Rs 19,220 per ten grams yesterday in Delhi tracking global cues.

The trading sentiment turned bullish after the metal rose a record levels of $1,252.90 an ounce yesterday in London as the investors sought an alternative to currencies and equities on mounting concerns over the European debt crisis.

In the futures market too, the gold prices surged to a record Rs 19,198 per ten grams yesterday for the most-active August contract on the Multi Commodity Exchange (MCX).

Meanwhile, MMTC is eyeing for a turnover of Rs. 1 lakh crore during the next 3 years increasing from its current level of Rs. 45,000 crore, mainly on the back of its strategy of diversification and synergy in allied trading activities through consolidation.

Mr. Sanjiv Batra, Chairman and MD of MMTC Ltd. said as the company deals with a large array of products, and if some products of the company were not doing well in any given situation, some others would do.

Due to the economic slowdown in 2009, the people had more faith in gold and the country''s gold import surge by more than 20 % as compared with 2008-09 financial year.

Due to which, MMTC''s share of gold imports also increased over 25 % from 16-17 %, which helped the company to increase its topline.

MMTC yesterday closed at Rs.28,671.45, up by 0.69% on BSE.

The stock hit an intraday high of Rs.28835 till now, as against the 52-week high of Rs.40000.The stock hit a low of Rs.28501.05 during the day. The stock had hit a 52-week low of Rs.25600 on July 13, 2009.

The stock opens at Rs.28730 at BSE. The total traded volume of the scrip on BSE till now stood at 110.

Meanwhile today, the BSE Sensex closed up by 40.79 points, or 0.25%, at 16657.89.

The NSE Nifty closed higher by 13.20 points, or 0.26%, at 5000.3.

MMTC has an equity capital of Rs 50.00 crore as of 2010 March. The face value per share is Rs 10. At the current price of Rs 28671.45, the P/E multiple stood at 670.112098333487 with book Value of 268.12 and P/BV at 106.94.

The total shareholding pattern of the company as on Dec 2009 stood at Promoters- 99.33%, Institutional Investors- 0.64%, General Public- 0.02% and other investors- 0.01%.

Considering the current price of Rs. 28671.45 at 4:03:00 PM, the stock had underperformed the market over the past one month till 09/06/2010 declined 6.39% as compared to the Sensex''s return of -3.88% and NSE Nifty''s -3.72 % returns.

Considering the current price of Rs. 28671.45 at 4:03:00 PM, the stock had underperformed the market over the past one quarter till 09/06/2010 fell 11.41% as compared to the Sensex''s return of -2.96% and NSE Nifty''s -2.66 % returns.

ICEX To Launch Iron Ore Futures: CEO- June 09, 2010

India Commodity Exchange (ICEX) which was founded by Indiabulls Financial Services and the state-run Minerals and Metals Trading Corporation of India (MMTC) are planning to start iron-ore futures. If this plan becomes successful then it will be country’s first bourse to allow trading in the steel-making raw material.

Yesterday speaking on the plan the Chief Executive Officer of ICEX, Mr. Sanjay Chandel said that once this is implemented then there may be more contracts added that are unique or new to the market. He added that as per now iron-ore is one which we are working on very seriously. Currently India is the third-largest iron-ore producer.

Mr. Chandel said that the planned futures will involve the whole value chain, which will be used by miners, traders and finally the users.

Moreover it was seen this year that the 40 year custom of setting iron-ore prices with steel-makers annually was broken by BHP Billiton, the world’s largest mining company by signing quarterly contracts.

On the other hand the website of the India Commodity Exchange showed that it wants to add new contracts to the 17 commodities currently on offer. Mr. Chandel further said that the average daily turnover may advance from about Rs 2,000 now to at least Rs 4,000-5,000 crore by the year ending March 31, 2011.

Mr. Chandel also said that the trading in iron-ore futures is subject to approval and will begin two months after the industry regulator; Forward Markets Commission (FMC) approves the product.

The India Commodity Exchange had started its operations in November and competes with the Multi Commodity Exchange of India which is the nation’s largest such exchange, for a share of the country’s Rs 77.65 lakh crore commodity futures market.

Whereas MMTC website shows that it is the country’s largest iron-ore supplier, handling about 15 per cent of the nation’s exports of the raw material.

Advancing Monsoon To Benefit Cotton, Sugarcane- June 08, 2010

The weather bureau said that in the next two to three days monsoon in India will enter the main cotton and sugar cane growing regions which may see a rebound in the winter-harvested crops.

Ms. Medha Kole, director at the India Meteorological Department (IMD) said that the effects of tropical cyclone Phet wanes will bring some rain in parts of Karnataka and Goa and also in Maharashtra which is a top producer of sugar cane and cotton. She added that on Monday some coastal areas in Karnataka, including Karwar saw some rainfall.

In India around 235 million farmers rely on the timing of the June-to-September monsoon rains to decide which crops to grow. Normal rains may lift farm output and cool food price gains after the weakest monsoon since 1972 last year cut rice and cane output.

As per Krishna Reddy, an analyst at Way2Wealth Commodities said that sugar cane will benefit from the rain as it is in vegetative stage. Beside, the rainfall will be beneficial for sowing of cotton and soyabean.

Moreover the cotton area should increase substantially as a revival in demand for textiles has boosted prices.

However crops were damaged last year due to drought which pushed the sugar prices up in New York to near a three-decade high in February. For South Asian nations monsoon is critical as its farmers are highly dependent on rain for growing its crops.

Meanwhile Vivek Saraogi, managing director at Balrampur Chini Mills, had said last month that the nation may halt sugar imports as output may jump as much as 30 per cent to 24 million tonnes in the year beginning Oct. 1.

Mr. Reddy said that the prices of agricultural commodities in India will stay depressed until something goes wrong with the progress of monsoon.

Whereas on Monday the speculation that the rising domestic production in sugar may ease the shortage made the sugar prices in India to fell to their lowest level in more than eight months. Currently, India is the largest consumer of sugar in the world.

According to the IMD estimates, the monsoon may be 98 per cent of the 50-year average this year.

The bureau also said that it considers rainfall to be normal if it is between 96 per cent and 104 per cent of the long-range average. However in the last year the bureau had failed to predict the drought.

Base Metals Fell On Bearish Global Cues- June 05, 2010

Bearish global cues led most of the base metals led by Nickel dipped at the non-ferrous metal market in Mumbai today. This led to offloading by stockists. The Nickel fell significantly by Rs 50 per kilo to Rs 1,070 over its overnight closing of Rs 1,120.

Along with this, Tin also dipped by Rs 12 per kilo to Rs 950 as against yesterday's closing of Rs 962. The copper sheet cutting also fell by Rs 7 per kilo to 344 as against Rs 354, Copper armiture and Brass utensils scrap dropped by Rs 5 per kilo each to Rs 349 and Rs 249.

Moreover, the Copper cable scrap as well as copper wire bar and brass sheet cutting all fell by Rs 3 per kilo each to Rs 360, Rs 388 and Rs 258, respectively.

Decision On Sugar Duty Soon- June 03, 2010

The government has finally agreed to take a decision on the import duty on refined sugar, which has been demanding by the industry for so long.

The food and agriculture minister Sharad Pawar yesterday said that the government may take a decision on imposing import duty on sugar in the next seven days.

“It is in the process. We may decide in a week or so,” he said.

The demand from the industry regarding the import duty on refined sugar was coming as the prices of the sweetener have dipped in the domestic market by about 30% in the last four months.

Meanwhile, as per the estimates of Indian Agricultural Minister, the sugar production in the country is all set to witness a tremendous growth over the previous year. As per the estimates, Indian sugar production this season will touch around 24-25 million tones as against is annual demand of 22-23 million tones.

The country is all set to witness a huge harvest of sugar for the first time in the last three years on the back of two important factors which are as follows:

* farmers are planting more cane this season * normal monsoon projected between H=June to September season

On the other hand, as per the Indian Agricultural Minister, India is planning to increase the ethanol production so as to protect sugar mills from the falling prices of the sweetener on the back of industry estimates of bumper sugar production next year. The increased production of ethanol will help the farmers fetch more money on the back of government’s decision of making sale of ethanol-blended petrol compulsory.

In order to increase the ethanol production in the country, government is also taking a number of initiatives which are as follows:

„X The government plans to buy ethanol from sugar mills at INR 27 a litre for six months compared with INR 21.5 earlier. However, the price needs the approval of the cabinet „X The government has provided loans of around INR 300 crore to sugar mills in the past three years to build additional annual ethanol production capacity of around 365 million litres

Global Sugar Market Sees Surplus But Consumption Up- June 02, 2010

As per the industry experts, the global sugar production will see a surplus of around 0.5 Million tones this season. Expectations of a bumper crop in the world's largest sugar producing country Brazil is playing an important role supporting these estimates.

Moreover, estimates of higher sugar production in India, world's largest consumer of the commodity will also play an important role in increasing the global production of the commodity which in-turn will keep a check on the prices from escalating. As per Indian agricultural minister, Mr. Sharad Pawar, sugar production in India will reach around 24-25 million tones this fiscal from around 18.5 million tones in the previous fiscal.

These estimates of higher production has played a vital role in increasing the sell -off activity in the sugar markets with New York raw futures losing half of their value since hitting a 29-year peak of 30.40 cents a pound in January. As a result, on the back of increased production and declining prices of the commodity, global sugar consumption is all set to increase by 2.3% this fiscal after a growth of just 0.06% in the previous fiscal.

India All Set To Grab The Egyptian Tea Market- June 01, 2010

Currently India exporting nearly 17 million kg of tea to Egypt annually and is all set to capture the 80 million kg annual Egyptian market. As of now, Kenya is the market leader, exporting 60 million kg to Egypt.

An Indian Tea Promotion Centre (ITPC) has been set up in Cairo by the Tea Board and the United Planters' Association of Southern India (Upasi). The ITPC has joined hands with Misr Import and Export Company (MISR), a public sector company which buys tea for the Egyptian government to facilitate the retail sale of Indian packet teas in Egypt

Egypt has been identified by the Tea Board as one of the emerging markets for Indian tea export by Tea Board, and ITPC has been set up to facilitate the tea trade between producer-exporters and merchant exporters in India and buyers in Egypt. A one-time payment of Rs 10,000 is what ITPC charges those who are willing to do business in Egypt through them.

One major areas of concern for the buyers in Egypt is the mismatch between the sample and the actual dispatch, in order to overcome this problem, standardized pre-shipment inspection procedures would be put in by the Tea Board, and these would have to be adhered to by exporters. It would be seen that once the payment for the consignment is cleared, the Indian exporter will remit 1% of the FOB value to Upasi. On reaching its destination, MISR would help in clearing the consignment and dispatching it to the buyer, if required. This service offered by MISR will be a paid one. Packet tea retail sales at the Cairo Centre will be handled by MISR and the Egyptian company will be charging 3% of the sales value as handling charges.