India May Bail Out Recession-Hit Nigeria Against Oil Supply Business/Business/Economy

India may provide oil-rich but recession-hit Nigeria a $15 billion advance against future supplies of oil.

Nigerian Minister of State for Petroleum Emmanuel Ibe Kachikwu made the request when he met his Indian counterpart, Dharmendra Pradhan, during a recent three-day visit to New Delhi to discuss the significant potential if the two countries diversified their engagements in the hydrocarbon sector.

"The Nigerian Minister requested a potential investment by India of $15 billion, if the terms can be agreed to, in Nigeria, as upfront payment for crude purchases, to be repaid on the basis of firm term crude contracts over some years," a statement by the Indian Ministry of Petroleum and Natural Gas said. The ministry did not clarify whether the request would be accepted.

The two ministers, the statement said, agreed to work on a Memorandum of Understanding to facilitate investments by India in the Nigerian oil and gas sector that is expected to be firmed up this December during PETROTECH-2016.

The Indian High Commission in Abuja, the Nigerian capital, said Nigeria now provides 12 per cent of India's annual crude oil requirement. "India has the top spot at Nigeria crude oil exports with imports of 23 million barrels and 1.5 million barrels of other petroleum products, equivalent to 13 per cent of Nigeria's total export amounting to $9.94 billion for 2015-2016," the High Commission added.

The statement said Kachikwu also suggested more collaboration with India in the refining sector and exploration and production on a government-to-government basis by Indian companies, long-term contracts for supply of crude to Indian companies from Nigeria and also the possibilities of executing LPG infrastructure projects by Indian companies in Nigeria.

 

Sources :.business-standard.com

Rupee Closes Lower At 66.81 Against Dollar; Down 0.2%

 The Indian rupee on Thursday weakened against the US dollar, tracking the losses in its Asian peers.

The rupee closed at 66.81 against the US dollar, down 0.2% from its previous close of 66.68. The home currency opened at 66.69 a dollar. So far this year, it’s down 1%.

Most Asian currencies closed lower as traders are getting more focused on the US Federal Reserve rate hike in December as Hillary Clinton’s lead in the US presidential race remains intact after the last debate before the 8 November election. In the final presidential debate between Republican presidential candidate Donald Trump and Democrat Hillary Clinton, Trump tried to reverse the momentum in an election that polls show is tilting away from him.

South Korean won was down 0.38%, Thai Baht 0.32%, Japanese yen 0.26%, Philippines peso 0.19%, Singapore dollar 0.15%. However, Malaysian ringgit was up 0.08%.

India’s benchmark Sensex index closed at 28,129.84 points, up 0.52% or 145.47 points from its previous close. So far this year, it has gained 7.5%, while foreign institutional investors (FIIs) have bought $7.45 billion.

From 3 to 18 October, FIIs sold $1.17 billion in debt and so far this year they have sold $906.50 million.

The benchmark 10-year government bond yield closed at 6.76% compared to Wednesday’s close of 6.732%. Bond yields and prices move in opposite directions.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 97.93, up 0.01% from its previous close of 97.92.

The European Central Bank is seen leaving policy unchanged at Thursday’s review, investors will be looking for signals regarding the outlook for its quantitative-easing programme

 

Sources :.livemint.com

Arecanut Slide Hits Coffee Growers

 Coffee growers in Karnataka, earlier pinched by a drop in production and price, are now feeling the heat from a crash in price of arecanut, a major intercrop (growing in alternate rows or sections in the same field) for them

The price of arecanut (better known as the source for the betel nut or supari) has dropped over a year from nearly Rs 75,000 a quintal to Rs 25,000-30,000 a qtl. Around two-fifth of the country's crop (India is the world's biggest producer and consumer) comes from Karnataka.

Last week, Baba P S Bedi, former chairman of the Karnataka Planters Association (KPA), said it was a lucrative crop for quite a while till last year. Total demand in the country is estimated at around 1.2 million tonnes; output is around 700,000 tonnes.


India imported 67,824 tonnes worth $159 million in 2015-16, from 110,000 tonnes worth $230 mn in 2014-15. Growers say prices have come down due to slowing in the export market, especially regarding Pakistan. And, imports have risen from Sri Lanka. Traders import from Indonesia, through Sri Lanka, by getting a ‘Certificate of Origin’ from the latter. Imports from Lanka to India attract zero per cent customs duty, under a free trade agreement (FTA) with that country. 'Rule of Origin’ is permitted under the FTA with a provision that the exporting country must do a minimum value addition of 25 per cent.

Related restrictions on sale of tobacco and supari is given as another reason for a drop in demand and, therefore, the price.

Buying of arecanut is predominantly by traders and stockists, who try to do so when prices are low.

Rohan Colaco, earlier a KPA executive committee and a major arecanut grower, says there had been a rise in output over the years. Since the crops of paddy and maize are labour-intensive, farmers shifted to arecanut in the western ghat region. Also, over the years, quite a few sugarcane growers had converted to arecanut. In 2011-12, sowing was on 441,000 hectares; in 2015-16, this had risen to 473,000 ha.

 

Sources :.business-standard.com

Large Scale Imports Of Apis From China Worries Indian Pharma Industry

 Over-dependence of Indian pharmaceutical industry on imported pharma raw materials from China to meet the growing requirements of drug formulations is a cause of concern for the industry as well as policymakers.

India may have emerged as a key supplier of generic and affordable medicine for the world market, its overwhelming dependence on China for crucial raw materials, such as active pharmaceutical ingredients (APIs) and intermediates, to the extent of over 65 per cent of the requirement, has emerged as a main worrying area, according to an Assocham-RNCOS joint paper.

This is all the more disconcerting in the face of louder narrative against reducing trade gap with China which is well over $ 51 billion, added the study.

APIs and intermediates are key raw materials to manufacture pharmaceutical formulations such as tablets, capsules, syrups, etc. Rapid growth in new medical technologies is spurring the demand for generic drugs worldwide with the increased import of raw pharma ingredients from the emerging markets. Against this background, the policy makers have also raised concerns over India’s rising dependence on imports from China for many APIs that go into the making of a number of essential drugs.

Though the government has taken steps like withdrawal of exemption in customs duties, imports worth Rs 13,853 crore in 2015-16 or 65.29 per cent of the total imports of Rs 21,216 crore are not sustainable. “Over-dependence on China for APIs is likely to affect the bulk drug manufacturing sector, and subsequently have an impact on our population in plausible scenarios of drug shortages brought down by interrupted imports from single source country,” said D S Rawat, secretary general, Assocham, adding that over-dependence on such a crucial raw material on a single country is also not advisable from India’s overall strategic interests as well.

One of the main reasons for huge API imports from China is low cost of its manufacture and subsidy in China while India levies negligible import fee. “The import fees should be increased in line with other counterparts,” advocated the Assocham-RNCOS paper.

Presence of multiple regulatory authorities for the industry is also hampering the growth of the sector. The API manufacturers have to approach different authorities for renewal of licences that become a tedious affair. “Therefore, a single committee of various government departments should be formed to regulate the industry through a single window and audit of plants,” said Assocham.

Besides, the centre can focus on development of mega parks for APIs across the country. These parks should be provided with common facilities such as effluent treatment plants, testing, power plants, IPR management and designing. These facilities should be maintained by special purpose vehicles.

Several other countries like China provide incentives and subsidies for promoting the manufacture of essential pharmaceutical raw material. This significantly reduces their cost of production and ability to supply API to the world market at a huge discount to the global prices. This discourages new domestic investment in the sector.

 

Sources :business-standard.com

Centre Mulls Lowering Sugar Import Duty To Cool Down Prices

 To cool down sugar prices during the festival season and also thereafter, the Central government is exploring the option of lowering the 40 per cent import duty on the sweetener in its raw form.

Officials said the department of revenue in the finance ministry has been directed to explore the possibility of lowering the import duty considering all revenue implications.

By bringing down the import duty, the Centre hopes to increase supplies of the commodity.

Sources said the food ministry complete waiver of the import duty, while other department want a token duty to be maintained.

Data sourced from department of consumer affairs shows that wholesale price of sugar in Delhi and Kolkata markets along with some other Centres have moved up by Rs 30-50 per quintal in the last two months.

The Central government in a series of measures in the last six months has imposed a 20 per cent tax on sugar exports, withdrawn the excise duty concession on production of ethanol, imposed stock holding limits on sugar mills in addition to wholesalers and retailers as it felt that some mills along with few Centre feels that sugar mills along with few unscrupulous traders could further push up the prices during the festival season taking advantage of the supply shortage.

India's sugar production in 2016-17 season that started from October is expected to around 23 million tonnes as against 25 million tonnes of 2015-16 due to drought in major growing states of Maharashtra and Karnataka.

However, some industry players feels that there would be sufficient sugar stock to meet the domestic demand of 26 million tonnes in 2016-17 as the country would have an opening stock of 7 million tonnes. The Centre too till sometime back was of the view that their won't be any shortage of sugar in the coming months, but relentless rise in prices seems to have changed its mind.

Meanwhile, news agency PTI reported that union Cabinet Secretary PK Sinha on Wednesday directed the Department of Consumer Affairs to consider all options to check sugar and chana prices in the market.

State governments have been told to impose stock limits and take action against hoarders to ensure availability of all essential commodities during ongoing festival season.

Sinha reviewed the availability as well as the prices of essential commodities at a high-level meeting with secretaries of consumer affairs, agriculture, food, commerce, expenditure and others in the evening.

"It was observed that the recent measures taken by the central government have helped containing prices of most of the pulses, which are showing declining trends, and other essential commodities except chana and sugar," an official statement said.

According to government data, chana dal is currently being sold at an average price of Rs 110 per kg.

The maximum price is Rs 145 per kg. Sugar is available at an average price of Rs 40 per kg, although the maximum rate is Rs 47 per kg.

 

Sources :.business-standard.com

Rupee Closes Marginally Stronger At 66.68 Against Us Dollar

 The Indian rupee on Wednesday closed marginally stronger against the US dollar tracking the gains in the Asian currencies markets.

The rupee closed at 66.68 against the US dollar, up 0.07% from its previous close of 66.73. The home currency opened at 66.69 a dollar. So far this year, it fell 0.85%.

Most Asian currencies closed higher following government data that showed the Chinese economy grew in line with expectations for the July-September quarter.

Traders are cautious as Donald Trump and Hillary Clinton square off in the third and final debate before the presidential election.

South Korean won was up 0.56%, Japanese yen 0.51%, Philippines peso 0.4%, Thai baht 0.4%, Malaysian ringgit 0.19%, Indonesian rupiah 0.13%, Chinese yuan 0.07%, Taiwan dollar 0.06%. However, Singapore dollar was down 0.08%.

India’s benchmark Sensex index closed at 27,984.37 points, down 0.24% or 66.51 points from its previous close. So far this year, it has gained 7.15%, while foreign institutional investors (FIIs) have bought $7.42 billion.

India’s new monetary policy committee (MPC) was concerned about economic growth, and saw the downturn in retail inflation and slack in the economy as an opportunity to cut the key policy rate, according to the minutes of its first meeting released on Tuesday. All members leaned heavily on the Reserve Bank of India’s (RBI) staff surveys and reviews, which some analysts saw as a negative.

The goods and services tax (GST) council worked out a compensation formula for states and is now bracing for a testy debate on rates. The Centre has proposed a tiered rate structure with the rates varying from 4% for commodities like gold to 26% plus cess on so-called sin goods.

Since 3 October to 17 October, FIIs sold $1.15 billion in debt and so far this year they have sold $886.60 million.

The benchmark 10-year government bond yield closed at 6.732% compared to Tuesday’s close of 6.722%. Bond yields and prices move in opposite directions.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 97.76, down 0.13% from its previous close of 97.895.

Numbers released by the National Bureau of Statistics in China showed the third quarter gross domestic product (GDP) grew by 6.7% on-year and 1.8% on-quarter. Among other data released on Wednesday, China’s fixed-asset investment increased 8.2% nominally on-year in the January-September period, retail sales were up 10.7% on-year in September and industrial production increased by 6.1% on-year in September, missing markets’ expectation for a 6.4% rise, Reuters reported.

 

 

Sources :.livemint.com

Gjepc Seeks Exemption From Gem And Jewellery Exports, 1.25% Gst Rate For Local Transactions

KOLKATA: Gem & Jewellery Export Promotion Council (GJEPC) has sought exemption for gem and jewellery export transactions and 1.25% GST rates for domestic transactions even as the GST Council commenced a crucial meeting to set rates.

At present, gems & jewellery exports are effectively zero rated. Hence any element of tax in exports is required to be rebated. As regards VAT, it is typically charged at the rate of 1% on the sale price by almost all the states in India.
In its representation, GJEPC mentioned that export transactions should not be subjected to any effective GST as regards exports. All related consumption of raw materials, inputs and input services such as input of rough diamonds gold/ silver/platinum (through duty free export promotion schemes) at the input level should continue to be free from levy of any import duty/GST. In the representation, GJEPC has mentioned that all transactions, whether direct or indirect, for exports, should continue not to be taxed with any indirect taxes in the form of GST.

As regards transactions for domestic consumption (other than those meant for ultimately converging into exports), GJEPC, in its representation, has suggested that the preferred tax rates for different segments of the GJI should be nil for rough and cut and polished diamonds and coloured gemstones.. The body has suggested a GST of 1.25% for gold/silver/platinum jewellery (including studded jewellery and costume fashion jewellery). It has said that gold procured from nominated agencies for purpose of use in exports should continue to be exempted in line with the existing framework).

Mr. Praveenshankar Pandya, chairman, GJEPC said, “Considering that India has achieved a pre-eminent global position in the gems & jewellery exports and that 4.6 million of skilled & unskilled people are directly employed in the business, and GJI contributes 14% of the India’s merchandise exports, it is urged that as currently, all transactions, directly or indirectly, in the course of exports of the products of GJI, should not suffer any tax burden under GST. Considering the extremely high price sensitivity of the products of GJI and the various complexities in the manufacturing and distribution cycle, tax and fiscal policy makers in India have, over several decades, experienced and accepted that, for domestic transactions, a minimal indirect tax rate of 0 – 1.25% best ensures tax compliance and collection, while curbing the well known adverse economic impacts of higher taxation in the GJI. Given the high price of the products where around 80% - 95% of the content is imported component, diverse sensitivities that the gem and jewellery industry (GJI) faces as well as considering its economic and social significance, historically, the GJI has always been taxed at the very lowest level in the current system of indirect taxation.”

 

Sources :economictimes.indiatimes.com

Blue Revolution In India: White-Leg Prawn Boosts Marine Exports

Litopenaeus vannamei, the white-leg prawn originally a native of the Americas, is helping script a blue revolution in India. Fisheries scientists call it one of the biggest success stories of Make-in-India if the concept can be stretched to apply to aquaculture.

Introduced in India in only 2009, the vannamei variety now makes up for roughly 80% of the country’s shrimp/prawn exports and 46% of the outbound shipment value of all marine products, showed official data. The variety has been promoted immensely by the Marine Products Exports Development Authority both in India and abroad.

The variety’s success can be gauged from the fact that its export value has risen close to sixfold in the past four years through 2015-16 to $2.14 billion (see chart). In volume term, its exports have risen just over sixfold in these four years to to 2.57 lakh tonnes in 2015-16.

Encouraged by the success of vannamei, the government expects marine product exports to touch $10 billion by 2019-20, compared with $4.68 billion in the last fiscal. The US, the EU and Japan are the biggest markets for Indian shrimps.
Massive vannamei supplies have helped India’s marine exports maintain relatively good growth and prevent the overall farm export growth from sliding further in recent years. From just over 9% in 2011-12 (when vannamei exports started picking up), the share of marine products in the country’s overall farm exports rose to almost 15% in 2015-16. Marine items now form the largest segment of the overall agricultural export basket.

Even though vannamei exports value dropped in the last fiscal, thanks to the broader slide in commodity prices that affected per-unit realisation, the volume of the outbound shipments rose, suggesting robust demand.

graph

“Given the country’s extensive coastline, abundant marine resources and a tropical climate that lends itself to aquaculture production all year round, India has tremendous potential to be a leading global seafood player well-connected in distribution markets.
Vannamei will continue as the key contributor to the sector and is in growing demand as a candidate species in aquaculture in the coastal states of India,” Marine Products Exports Development Authority chairman Jayathilak A told FE.
He added that for a sustainable shrimp industry and to retain the unit value realisation of vannamei, the country needs to go for value addition in accordance with global demand.

 

Sources :financialexpress.com

Micra Most Exported Car Brand From India In September

 During the month of September, Nissan's Micra was the most exported car from India, followed by Ford's Ecosport and General Motor's Beat.

Over the last few years, the Japanese automajor Nissan and Ford of US have been on the top slots. Month-over-month, one of the two companies will be number one and two.

7,412 units of Micra were exported in September. Ford's EcoSport sold 6,837 units while General Motors' Beat sold 6,643 units.

Micra was launched by Nissan in 2010 and it was one of the successful products for the company both in domestic and export markets. From April to September 2016, Nissan has exported 39,017 units of Micra from India.

In September 2016, Nissan reported a 20 per cent growth in overall exports from India as compared to the same month one year earlier. Nissan Motor exported a total of 11,999 vehicles — including both Nissan and Datsun cars — in September. Nissan in India has a portfolio of two brands, Nissan and Datsun.

Guillaume Sicard, President, Nissan India Operations said, "Nissan is proud to contribute to the country's economy and the Make in India program by continuing to be one of the largest automotive exporters from India. Our strategy to use our plant in India as an export hub underlines our significant presence here and also demonstrates our long-term plans for growth. The Oragadam plant is the largest and most advanced in the Alliance, and directly and indirectly we have created 40,000 jobs in India, including 6,000 high value engineering jobs at our R&D centre."

Nissan earlier this year also announced the start of exports of the Datsun redi-GO to South Africa, Sri Lanka and Nepal, in addition to the Datsun GO and GO+.

 

Sources :.business-standard.com

Grape Exports From India: El Nino Set To Shower A Windfall

The country’s grape exports are expected to gain significantly this season owing to bad crop conditions in Chile, one of the largest exporters of grape in the world.

According to All India Grape Exporters Association president Jagannath Khapre, around 1.92 lakh tonne has been the peak of Indian grape export and the country is likely to cross this mark this year due to good monsoon and the prevailing good weather conditions in the grape growing regions. On the other hand, the table grape crop in Chile is expected to suffer a loss of 15% to 20% as a result of the unfavourable climate this season and the devastating impact of El Nino.

“Grape exports from Chile to the European Union is likely to be impacted this season because of the bad weather in that country. And if India plays its cards right, it could benefit and improve grape exports this year,” he said. Moreover, Russia and Bangladesh exports from India had reduced last year and if these countries increase export then again India could gain advantage, he added. The demand will rise, and if the currency improves, exports could rise, he said.

Last year, the country exported around 84,000 tonnes of grape to Europe. This number could improve by 5-7%, he said. The European Union (EU) has agreed to retain the residue levels of chlormequat chloride (CCL), a plant growth regulator at 0.05 ppm (papers per million), for a period of two years and this comes as a major shot in the arm for Indian exporters. In August this year, EU had proposed to change the pesticide residue levels in grapes to 0.01 ppm causing unrest among Indian exporters. In 2010, Indian grape exports faced a setback as EU was reluctant to accept Indian table grape consignments after chlormequat chloride was detected in excess of the prescribed maximum residue level (MRL). In 2009, EU had come up with more stringent regulations on pesticides. Unaware of the changed rules, Indian exporters who did not meet the new standards, faced rejection. However, less than 10% of the total export volumes were rejected.

Indian grapes began to find favour after 2014 when 1.92 lakh tonnes of grapes were exported by Indian traders to around 94 countries. Of this, Europe and the UK together accounted for the largest share of 65,000 tonnes.

In the overall grape exports from India, Nashik district recorded the highest ever export of 108,000 tonnes during the last grape season against 49,768 tonnes in 2014-15. Of the total 108,000 tonnes of the fruit, 75,000 metric tonnes were exported to European countries, while the rest 33,000 tonnes were shipped to countries like Russia, Bangladesh, China, Dubai etc.

At present, Canada has granted market access for the Indian fresh grapes. This follows the recent Indo-Canadian bilateral discussions held in New Delhi. However, the Indian exporters will be able to take advantage of this development only from the next season. Canada will open its market for the Indian exporters who have been shipping fresh grapes to European countries. Canada has also imposed conditions that exporters have to register the vineyards and pack houses, and maintain traceability.

The total area under grape plantation across the country is estimated at 3.50 lakh acres, including 2.75 lakh acres in Maharashtra and rest of the 75,000 acres spread in Karnataka, Andhra Pradesh and Telangana.

Total grape production of the country is estimated at 28 lakh metric tonnes, of which 22 lakh tonnes is expected from Maharashtra alone.

Meanwhile, grape growers have started the registration of vineyards with the agriculture department of the state for the 2016-17 season. The agriculture department has set a deadline of October 30 for the purpose. As per guidelines by the Agricultural and Processed Food Products Export Development Authority (Apeda), it is mandatory for grape exporters to register their vineyards for export.

 

Sourecs :financialexpress.com

Rupee Weakens Against Dollar Over Sell-Off By Fiis

The Indian rupee on Monday weakened against the US dollar after foreign institutional investors (FIIs) continued selling in debt markets. The fall in foreign exchange reserve also dampened the sentiments.

The home currency opened at 66.81 a dollar. At 2pm, the rupee was trading at 66.81 against the US dollar, down 0.15%, from its previous close of 66.72. From 3 to 13 October, FIIs sold $898.44 million in debt.

On Friday, Reserve Bank of India data showed foreign exchange reserves declined by a huge $4.343 billion to $367.646 billion in the week to 7 October, as the country gears up for a massive dollar outflow due to billions of dollars in deposits nearing their maturity. India had raised about $25 billion by way of three-year FCNR (foreign currency non-resident column) deposits in September 2013 to overcome the sharp fall in the rupee.

India’s benchmark Sensex index was trading at 27,578.97 points, down 0.34% from its previous close. So far this year, it has gained 5.6%.

India’s exports grew by 4.62% to $22.9 billion in September on the back of healthy growth in sectors such as engineering and gems and jewellery. Imports contracted by 2.54% to $31.22 billion, leaving a trade deficit of $8.33 billion in the month under review.

The benchmark 10-year government bond yield was trading at 6.754% same as that of Friday’s close of 6.754%. Bond yields and prices move in opposite directions. The rupee is down 1% till date this year, while FIIs have bought $7.57 billion in equity and sold $637.50 million in debt markets.

Asian currencies were trading lower. Malaysian ringgit 0.534%, South Korean won was down 0.490%, Taiwan dollar 0.396%, Philippines peso 0.367%, Indonesian rupiah 0.321%, Thai baht 0.15%, China Renminbi lost 0.168% and China offshore 0.166%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 98.112, up 0.09% from its previous close of 98.019.

On Friday, Federal Reserve chairwoman Janet Yellen said there are “plausible ways” that running the US economy hot could fix damage caused by the Great Recession, laying out the argument for keeping monetary policy easy without taking an interest rate hike off the table this year.

Traders are cautious ahead of the data from China, including third-quarter gross domestic product (GDP), house prices, industrial production numbers, retail sales and fixed asset investment due this week.

 

Sources :.livemint.com

Handicrafts Exports To Grow By 10% To Rs 23,560 Cr In Fy17: Epch

NEW DELHI: With pick up in demand in the new and traditional markets, handicrafts exports will grow by about 10 per cent to Rs 23,560 crore in 2016-17, EPCH today said.

Exports Promotion Council for Handicrafts (EPCH) Executive Director Rakesh Kumar said that demand in regions like the US, Europe, Latin America and Middle East is growing and it will help in recording a healthy growth figures in exports.

For the April-September 2016 period, the exports reported a growth of 18.25 per cent year-on-year to Rs 13,005.35 crore.

"The promotional efforts being undertaken towards enhancing our exports in these markets would certainly result in increase in exports not only in the traditional markets but also in the emerging markets. This year, we are targeting the export figure of Rs Rs 23,560 crore," Kumar told PTI.

To boost the exports, the council has sough enhanced duty benefits for the sector, he said.

Talking about compliance issues in the sector, he said the council is taking lead in this direction by creating awareness through various seminars and other means.

Further the council is participating in 30-35 exhibitions and fairs abroad every year to promote the items in global markets.

"These participations remain both in traditional and not- traditional markets for Indian handicrafts. The participation in exhibition abroad is very much necessary to create awareness, brand image of the sector and to secure business for the sector,"

 

Sources :economictimes.indiatimes.com

Ford, Gm Lead India's Car Export Growth In H1 2016-17

NEW DELHI: Passenger vehicle exports from India grew 15.38 per cent in the first half of the ongoing fiscal with US auto majors Ford and General Motors emerging as surprise packages leading the charge, while their Korean and Japanese peers struggled to maintain momentum.

According to SIAM data, passenger vehicles exports in the April-September period were at 3,67,110 units as against 3,18,188 units in the year-ago period.

In terms of absolute volume, Hyundai Motor India remained the largest exporter with 87,499 units at a growth of 2.01 per cent.

The second largest exporter during the period was Ford India shipping 73,821 units, a growth of 32.25 per cent. Interestingly, the company's exports were much more than what it sold in the domestic market -- 46,422 units.

Maruti Suzuki IndiaBSE -1.43 % saw a decline of 7.87 per cent in its overseas shipments during the first six months of 2016-17 at 60,526 units, occupying the third slot.

The fourth largest exporter Nissan Motor India also witnessed a decline of 7.81 per cent at 49,611 units during the period.

The most significant gainer was General Motors India which clocked a massive 863.74 per cent jump in its passenger vehicle exports at 30,647 units during the period. In comparison, the company sold just 12,059 units in the domestic market, down 28.01 per cent.

According to SIAM, German auto major Volkswagen also exported more passenger vehicles from India than it sold in the country during the first half of the fiscal.

Volkswagen India exported 43,114 units in April- September, up 19.28 per cent. It sold only 23,329 units in the domestic market during the same period, up 0.45 per cent.

"Some of the OEMs are working on a clear, focussed strategy of exporting from India, which has worked out really well for them," Price Waterhouse Partner and auto expert Abdul Majeed told PTI.

He further said these companies are targetting markets in emerging economies such as Latin America, East Europe and Africa, which are similar to India with the products here.

"They have made those investments for exports and they already have big network in those export markets," Majeed said.

Concurring with him, Ford India Executive Director, Marketing, Sales, and Service Anurag Mehrotra said: "The most recent commencement of exports of Ford Figo as KA+ to Europe, from our state-of-the-art Sanand plant, showcases our continued investment and commitment."

 

Sources :economictimes.indiatimes.com

Indian Cotton Exports To Pakistan Slump Amid Tensions, Say Traders

Rising hostilities between India and Pakistan have brought their $822 million-a-year trade in cotton to a juddering halt, as traders who are worried about uncertainty over supplies and driven by patriotism hold off signing new deals.

The nuclear-armed rivals have seen tensions ratchet up in the past few months over the disputed territory of Kashmir, and cotton traders in both countries said they were watching developments along the de facto border with alarm.

Pakistan, the world’s third-largest cotton consumer, usually starts importing from September, but three Indian exporters said the number of inquiries had slowed to a trickle in the last two weeks.

In the clearest sign yet of souring relations affecting commerce, Pakistan-based importers also said they were not buying.

“At the moment there is no cotton trade. It’s at standstill. There is uncertainty that, God forbid, if war breaks out, what will happen?” said Ihsanul Haq, chairman of the Pakistan Cotton Dealers Association.

Pakistan Cotton Commissioner Khalid Abdullah said a “low quantum of trade activity is still taking place.”

He said the Pakistan government had not directed traders to stop buying Indian cotton and expected trade to normalize when tensions eased.

Indian government officials said they had not yet noticed trading had stopped.

But some Indian officials said last week that Prime Minister Narendra Modi’s government was considering whether it should choke trade with Pakistan to put pressure on its neighbour, even though the trade balance is in India’s favour.

India’ Biggest Cotton Buyer

Trade between India and Pakistan, which have fought three wars since their independence from British rule in 1947, is small.

In the 2015/16 fiscal year ending on March 31, official trade between the two was $2.6 billion. Cotton is the largest component of that total.

It is not clear whether other goods and commodities traded between the two, such as jewellery and dry fruits, have been hit by the escalation in hostilities as well, but the disruption to cotton shipments is potentially significant.

In the crop year ended Sept. 30, Pakistan was India’s biggest cotton buyer after its own crop was hit by drought and whitefly pest.

It imported 2.5 million bales from India, and supported Indian cotton prices at a time when China was cutting imports, traders said.

Lower purchases by Pakistan this year could hurt exports from the world’s biggest producer of the fibre and put pressure on Indian prices, but could also help rival cotton suppliers like Brazil, the United States and some African countries.

Chirag Patel, chief executive officer of Indian exporter Jaydeep Cotton Fibers, said the country could export 5 million bales in the 2016/17 crop year, but exports could plunge to 3 million bales without Pakistani imports.

An exporter based in Mumbai estimated that Pakistan will need to import at least 3 million bales in 2016/17, and India will have a surplus of around 8 million bales.

“As soon as the (political) situation improves, cotton trade will definitely resume between the two countries,” said Haq of the Pakistan Cotton Dealers Association.

But for now, traders on both sides of the border said the environment was not conducive to doing business.

“Many cotton exporters are not interested in selling cotton to Pakistan. They are trying to find other markets,” said Pradeep Jain, a ginner based in Jalgaon in the western state of Maharashtra.

Shahzad Ali Khan, chairman of Pakistan Cotton Ginners Association, referred to a move by the Indian Motion Picture Producers’ Association (IMPPA), a small filmmakers’ body, last week, banning their members from hiring Pakistani actors.

“India is banning Pakistani artists, so how can it expect us to buy cotton from India?” Khan said.

“In various forums Pakistani traders are saying they will not buy cotton from India this year. Even if they need to pay extra, they will pay and buy it from other suppliers.”

 

Sources :.hindustantimes.com

Soyabean To Remain Under Pressure

Increase in Indian output and global supplies will keep prices under check

With global soyabean output set to increase this fiscal, the pressure on soyabean prices in international markets is likely to continue. As a result, Indian soyabean prices, which have been sticky over the past year, are also likely to come under pressure.

After two years of drought affecting production and lifting prices higher in the domestic market, output from India is set to rise, albeit at a lower-than-projected rate due to floods in the top soyabean-growing State of Madhya Pradesh. Increase in global supplies will offset an otherwise rising demand for soyabean products, leading to accumulation of stocks, thus keeping soyabean prices under check in 2016-17.
Global production set to rise

Soyabean is one of the major oilseed crops in the world, accounting for about 60 per cent of oilseed production in 2015-16. About 86 per cent of the world’s total production is crushed for oil. The oil recovery is 17-18 per cent while the meal forms 80-82 per cent.

The US, Brazil and Argentina are the top three soyabean producing countries in the world, accounting for 83 per cent of the total world production in 2015-16. According to the US Department of Agriculture (USDA), the global production is expected to go up to 333 million tonnes in 2016-17 from 313 million tonnes in 2015-16.

Global ending stocks in 2016-17 are expected to rise which should keep prices under check.

According to the USDA, production in India is expected to go up from seven million tonnes in 2015-16 to 9.7 million tonnes in 2016-17. This is after it revised its estimate down after August.

The USDA reduced its forecast production from 11.4 million tonnes in August to the current 9.7 million tonnes on account of lower area sown and a lower yield forecast. Also, in Madhya Pradesh, excessive rainfall led to widespread flooding, diminishing crop yields, according to the USDA.

Experts in the domestic market too peg a similar estimate. As reported by the Agriculture Ministry on September 8, 2016, the total soyabean area decreased by 1.60 lakh hectares from 116.30 lakh hectares in 2015-16 to 114.70 in 2016-17. The production estimates here are close to 9.5 million tonnes.
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Nonetheless, soyabean output is estimated to be 35-38 per cent higher than that in the previous year.

This will lead to an increase in soyabean crushing in India, to 7.6 million tonnes in 2016-17 from 5.87 million tonnes in 2015-16.
India trade picture

In India, soyabean is mainly used for crushing and thereby obtaining soyameal. Of the total soyabean produced in the country, 70-80 per cent goes for crushing and the remaining is used directly. While import of soyabean is negligible, a chunk of the country’s soya oil demand is met by imports. According to data provided by the Solvent Extractors’ Association (SEA), import of soya oil has nearly quadrupled in the last five years to 4.2 million tonnes in 2015-16.

However, in the past, there has been a good export market for Indian soyameal, particularly from South-East Asian countries, as this is non-genetically modified (GM) soyameal.

But in the last few years, exports have taken a hit due to higher prices of soyameal in the Indian market, compared to other international markets. According to SEA, as of August 2016, FOB/FAS Indian soyameal is quoted at $480 a tonne against Argentina origin soyameal CIF Rotterdam at $383 per tonne. Soyameal exports during April-August 2016 stood at 10,145 tonnes, 71 per cent down from last year.
Price outlook

The price of soyabean as any other commodity is broadly dependent on the demand and supply situation. As mentioned before, an increase in global output this year should keep prices under pressure. The CBOT soyabean did start to trend up in May and June this year on production-related concerns in Argentina. But prices have been down 6.5 per cent in the past two months as the outlook on global production improved.

In the domestic market, prices normally track the international market. The NCDEX soyabean contract (generic) has fallen about 12 per cent over the past two months and 17 per cent so far this year.

From about a peak level of ?4,200 a quintal in April, domestic soybean prices have plummeted to about ?3,051 a quintal. Domestic soyabean prices are also affected by soyameal prices. The bleak export outlook of soyameal can also keep its prices under pressure.

India imports a chunk of its soya oil requirement and hence, domestic prices track international prices. Soya oil price is also linked to the price movements of palm oil (a substitute to soya oil). The government has only recently lowered the import duty on refined palm oil to 15 per cent from 20 per cent. This will also keep the price of soya oil under pressure.

 

Sources ;thehindubusinessline.com

Fruit Export Doubles In April-August

 Triggered by a sharp increase in the shipment of bananas, India's export of fresh fruit doubled in the first five months of the current financial year, on rising demand in Gulf countries after crop failure in Philippines and Ecuador, two major alternative suppliers.

Data from the Agricultural and Processed Food Products Export Development Authority (Apeda) showed India's fresh fruit export at 409,921 tonnes during the period between April and August, from 195,259 tonnes in the corresponding period last year. In value terms, however, it was up only 26 per cent to $256 million (Rs 1,720 crore), from $203 mn (Rs 1,360 crore) in the corresponding period last year.


This means the realisation from fruit export has failed to keep pace with the growth in volume. This is due to poor post-harvest management, reducing the shelf life. "The exponential growth in volume is mainly because of sharp increase in shipment of banana to the Gulf countries, Malaysia and Southeast Asia. Because of crop failure in competing countries, exporters are getting a good opportunity. This has also resulted in entry of many opportunistic exporters, affecting the entire trade," said Dattatraya More, general manager (fruits), Deepak Fertilisers & Petrochemicals, also known as Desai Fruits.

Trade sources estimate a little over 40 per cent contribution of banana in the overall shipment of fresh fruit in these five months. Indian banana is cheaper than the same fruit sourced from other origins. In Dubai's auction, our banana was sold at half the price of the fruit from Philippines and Ecuador; India is also said to produce the best quality in the world.

Even so, for a 13-kg box, Indian exporters fetched $7.50-8, against $18-24 by those from Philippines and Ecuador. "The realisation for Indian banana exporters is much lower as most are not adopting post-harvest practices of international standard. They adopt short cuts to grab large market shares. Therefore, despite having superior quality, Indian export fetches lower value," said an exporter.

The quality of banana remains in order till harvesting but because of poor handling, the quality then deteriorates. Also, unscientific ripening practices adopted by short-term players reduces shelf life.

The government has mandated modern and scientific packing houses for export of mango and grapes. "The government has taken up the matter very seriously. Already, Apeda has sought compulsory registration of exporters of mango and grapes. Gradually, the same practice will come for banana. Then, fly-by-night operators would run away from the system," hopes More.

More is also being done to educate farmers on quality improvement. "The future for Indian produce is bright. This is just the start. As farmers get more aware of global trends, things will further improve, noted Tarun Arora, Director, IG International, also noting new cold store facilities and improving road infrastructure.

 

Sources :business-standard.com

Tata Steel Expects Steel Demand To Bounce Back

KOLKATA: Tata Steel expects steel demand to bounce back in the second half of the fiscal year, led by segments like passenger vehicle sales, construction and rural homes, in what perhaps marks the first upbeat remark from a top manufacturer about the domestic steel market that has been sagging for a year and half.

“We see the steel sector picking up during the second half riding on auto, construction and rural demand. Indian demand should be met out of Indian production of steel. Imports are not the best way for it,” vice president for steel marketing and sales Peeyush Gupta told ET in an exclusive interview.

The automotive sector accounts for nearly 18% of Tata Steel’s sales by value. A revival in the sector — sales have been strong for car and two-wheeler makers for several months now and they are expecting a bumper festival period — is making the company upbeat about demand from that sector. In commercial vehicles, order books are full in segments like excavation and mining equipment.

State and central government funding in infrastructure and construction, particularly in flyovers, bridges, airport terminals and roads, is expected to see a rise, with the railways too likely to add to the construction boom. “Since steel accounts for 50% of construction, we are betting big on it to raise overall demand,” Gupta said.

“The rural market is doing well, particularly in the individual homebuilding segment where steel accounts for some 12-15% of cost, with growth also picking up in Tier 2, Tier 3 and Tier 4 towns,” Gupta said. In rural and in semi-urban and urban areas in top 40 towns including places like Rohtak, Gorakhpur or Kanpur, Tata Steel expects a spurt in sales of its branded galvanized corrugated sheets for roofing, along with tubes and bearings. It also expects demand from segments related to agriculture. However, in Tier 1 cities, where the builders or promoters are mainly involved in residential segment, demand is yet to pick up.

“Retail and branded steel now account for 45% of our sales by value compared to 2001 when it accounted for only 5% of sales. In this, the SME segment is critical for us since it accounts for nearly 20% of our branded retail sales by value. We have systematically targeted them since they want the steel to come to them,” Gupta said.

Traditionally, the SME segment has been underserved by the steel industry. Tata Steel has created a separate distribution channel for it and also introduced watermarking of steel to add to its authenticity. It is also going deeper into villages with hardware shops located within a 5-10 km radius. Expansion to capacity, like addition of a thin slab caster, and the new Kalinganagar plant in Odisha is poised to reduce the company’s commodity play further.

Share of value-added products, which now contribute some 10-15% of sales, is set to go up further with special quality steels for gas cylinders, oil pipes, medium carbon pipes and high-end engineering being added to its portfolio. An emphasis on value engineering, where Tata Steel is a collaboration partner for auto companies in design and prototyping, is also set to increase its share in automotive segment from the current level of 18%.

“India is a good place to make cars since it has the right ecosystem in terms of technology, talent and policies,”

 

Soources :thehindubusinessline.com

Why India Will Never Have Zero Coal Import Bill

 The Narendra Modi government has been working on cutting the country's coal import bill of over 1 lakh crore annually. Power minister Piyush Goyal has insisted the government would stop coal imports and make way for domestic coal going ahead.

However, the plan to replace imports with domestic output may falter on a crucial affliction - lack of coking coal reserves that is used as a raw material in steel making and allied industries. The country imported around 200 million tonne (MT) of coal last financial year to top up domestic production of 640 MT.

Coal in India is used either from domestic sources, mostly mined by coal India, or is imported. The imports are mainly to compensate the lack of good quality coal, especially coking coal from the mining sources in the country.

Coking coal is imported by state-run Steel Authority of India Limited (SAIL) and other steel manufacturing units mainly to bridge the gap between the requirement and indigenous availability and to improve the quality.

Coal based power plants, cement plants, captive power plants, sponge iron plants, industrial consumers and coal traders are importing non-coking coal. Coke is imported mainly by pig-iron manufacturers and iron and steel sector consumers using mini-blast furnace.

However, India does not have enough reserves for good quality coking coal and most of it is imported from Indonesia, South Africa, Russia and Australia.

Experts say, it is this requirement of coking coal added with power plants whose boilers are designed to run only on imported coal, which is likely to continue importing coal in the coming years.

"Talking in aggregate terms does not really help. Let us subdivide the import requirement of the country into three parts. One is of coking coal, where we have traditionally had a deficit. So, we have been importers of coking coal for a long-long time," Vivek Bharadwaj, joint secretary, Ministry of Coal, told ETEnergyworld.

He added this coal requirement will not end any time soon. "Also, we have power plants at the coasts which are based on imported coal. Their boilers are designed only for imported coal. They will continue to use imported coal. So, it is only the third category of thermal power plants which were using imported coal as a substitute for domestic coal because if its scarcity, which we can do something about," Bharadwaj explained.

As per provisional government figures, India's 200 MT of coal imports last fiscal included 43.50 million tonne of coking coal and 156.38 million tonne non-coking or thermal coal. This financial year (2016-17), the government had imported over 35 million tonne coal by the end of May.

However, the government is now taking steps to ramp up the production of coking coal in the country and curtail the use of imported coal. "Last year, there has been a drop of Rs 23,000 crore in the import bill," Bharadwaj said. "We are trying to map out these industries, with both power and non-power use, which will still continue to import coal in the near future."

Similarly, for plants situated at the coasts, switching to domestic coal would be a big challenge as the process would involve changes in its boilers, which involve huge costs.

 

Sources: economictimes.indiatimes.com

Why The Central Government Should Go All Out To Expand Oil Palm Cultivation

The Indian edible oil sector is the world’s fourth-largest after the US, China and Brazil and accounts for around 9 per cent of the world’s oilseed production.

An irony of this industry is its heavy dependence on imports. Cooking oil imports are all set to touch a record 15 million tonnes (mt) in the current, 2015-16 Oil Year, ending October. Out of the 15 mt, palm oil imports alone account for 9 mt or 60 per cent.

The reason for palm oil occupying the lion’s share of the total consumption is because palm is generally the cheapest commodity vegetable oil and also the cheapest oil to produce and refine globally.

Therefore, focussed palm oil cultivation will undoubtedly play a key role in addressing the domestic shortfall in edible oil consumption and lowering India’s edible oil import bill and saving foreign exchange.
Highest-yielding crop

A distinct advantage that palm enjoys is that it is the highest-yielding perennial edible oil crop and needs a fraction of the area used to grow in comparison to other oilseeds. This is indeed potentially attractive in a country like India, where land is increasingly scarce as the population rockets.

On a per-hectare basis, oil palm trees are 6-10 times more efficient at producing oil than temperate oilseed crops such as rapeseed, soyabean, sunflower or ground nut. For example, while a hectare of land can yield 300-400 kg of groundnut oil, nearly 4 tonnes of palm oil can be produced from a hectare of land.
The case for palm oil

P Rethinam, a plantation crop management specialist, in his detailed report titled ‘Increasing Vegetable Oil Production through Oil Palm Cultivation in India’ observes: “27 million hectares of nine oilseed crops produce about 9 million tonnes of oil per year but 2 million hectares of oil palm could produce 8 million tonnes of crude palm oil, 0.8 million tonnes of palm kernel oil, palm kernel cake, bio mass for bio energy, eco-friendly bio-diesel, etc.” There is a big potential to raise the acreage of palm, which is currently cultivated on about 200,000 hectares. According to OPDPA, India has the potential to expand the acreage to 20 lakh hectares, keeping in view the demand. If this is done, the palm oil industry, which provides employment to 20,000 people, can create two lakh additional jobs.

Indian palm oil production is estimated at 1.7 lakh tonnes for 2014-15, up from 0.6 lakh tonnes in 2010-11. Palm oil cultivation has grown from zero to 2,00,000 hectares in the past two decades.

The Central government has been trying, for many years now, to reduce its dependence on imported edible oils by encouraging farmers to take up palm cultivation. In an encouraging move, the current government has announced a package of ?10,000 crore over three years, which is intended to support farmers until the trees begin to yield (it takes three to five years for the palm tree to start yielding fruit).

The government has identified nine States with suitable climatic conditions. In November 2015, the government has also allowed 100 per cent FDI in palm oil plantations, a move the industry believes will boost domestic production, bring in more funds and newer technologies into the sector.
Industry challenges

However, there are several road blocks for India preventing it from successfully expanding on its domestic palm oil cultivation. First and foremost, lack of large land tracts is a major constraint.

The industry wants the government to declare palm oil as a plantation crop to move it out of the Land Ceiling Act. Moreover, the current import duty is not supportive of oil palm farmers and the industry.

Secondly, the Indian edible oil industry has been urging the government to maintain a duty differential of at least 15 per cent on crude and refined oil to protect the interests of refineries. Domestic edible oil refiners are facing a surge of imports of refined oil over the last few months, reducing their capacity utilisation to 30-40 per cent from 55-60 per cent a year ago.

Last month, the Centre lowered the import duty on crude palm oil from 12.5 per cent to 7.5 per cent and on refined oil from 20 per cent to 15 per cent. Hence, there was no change at all in the duty differential and the move is not expected to have any impact on either the industry or farmers.

The government needs to provide a level playing field to the domestic refining industry. Otherwise, Indian edible oil importers will be perpetually fighting a losing battle with cheap rival palm oil from top producers Malaysia and Indonesia.
Conclusion

A focus on palm oil cultivation is key to India’s goal of attaining self-sufficiency in vegetable oils over the next decade. The palm oil industry deserves the highest priority and encouragement from the government to meet the internal demand of edible oil, resulting in a strong imprint on savings of foreign exchange, employment generation and boosting India’s food security.

 

Sources :hindubusinessline.com

Rupee Recovers Over 20 Paise Against Dollar, Ends At 66.72

Indian rupee recovered over 20 paise against the US dollar on Friday on account of increased selling of the American currency by banks and exporters. Rupee closed 22 paise up at 66.72 against the US dollar. The local currency slipped 40 paise on Thursday and closed at fresh three-week low of 66.94 against the dollar on rising concerns over interest rate hike by the US Federal Reserve.

Meanwhile, domestic equity markets traded choppy in a narrow range and ended in green. Concern about the global economy contributed to the early weakness, while value buying at reduced levels after the drop helped the bourses in some recovery. This week has seen brutal cuts on equity markets globally as investors contend with weak China data, weak start to earnings in the US and now almost 70 per cent probability of rate hike by the Federal Reserve.

Foreign institutional investors remained net sellers in the Indian equity markes as they sold shares worth of Rs 846 crore on Friday, according to the provisional data available with NDSL.

US Dollar Index declined by 0.45 per cent in Thursday’s trading session due to unfavourable economic data from the country. However, sharp fall in the currency was cushioned due to rise in risk aversion in global markets which led to increase in demand for the low yielding currency.

US Unemployment Claims remained unchanged at 246,000 for the week ending on 7th Oct’16. Import Prices grew by 0.1 percent in September with respect to decline of 0.2 percent in August.

 

Sources :.financialexpress.com