Rupee Trades Near Fresh Low Against Us Dollar

Mumbai: The Indian rupee on Monday was trading near a fresh record low against the US dollar, amid nearly $5 billion outflows from foreign institutional investors (FIIs) in local equity and bond markets since the government announced the demonetisation scheme.

The FIIs are selling local as well as other emerging market assets on rising expectations of a possible US interest rate hike in its next mid-December policy and as speculation mounts that US president-elect Donald Trump’s reflationary policies will mean a quicker pace of monetary tightening by the Federal Reserve. The concern that he will take a more protectionist approach to trade has also weighed on developing-nation assets.

At 2.30pm, the rupee was trading at 68.74 a dollar, down 0.3% from its previous close of 68.47. The home currency opened at 68.43 against the US dollar and touched a low of 68.80 a dollar. So far this year, it has fallen 3.7%.

Barclays expects that the currency volatility could increase and liquidity could become scarce during bouts of market risk aversion and dollar strength, as the market tests the new Reserve Bank of India (RBI) leadership’s tolerance for weakness in the rupee.

“Unless the RBI hints at greater tolerance of larger rupee depreciation, we continue to hold a constructive medium-term view on the INR and see it as one of the most resilient EM currencies in a strong dollar environment. Potential anti-immigration and anti-trade policies in the US would not bode well for developing economies, and the dollar likely would strengthen next year—particularly against EM currencies. Rupee is unlikely to ‘escape the beta’ (to the USD) and likely also would drift higher as the rest of USD/EM FX adjusts, especially if the market sees the RBI as continuing to be less tolerant of rupee appreciation than it is of rupee depreciation,” said Barclays report.

India’s benchmark Sensex index was trading at 26,333.75 points, up 0.05% or 12.82 points from its previous close. So far this year, it has fallen 1%.

Traders are also cautious ahead of the key gross domestic product (GDP) data which will be released on 30 November. According to Bloomberg estimates, GDP will be 7.6% for the September quarter from 7.1% in the June quarter.

Bond yields gained after the RBI on Saturday unexpectedly ordered banks to deposit their extra cash with it, in a bid to absorb excess liquidity generated by the government ban on larger banknotes.

The central bank said banks would need to transfer 100% of their cash under the RBI’s cash reserve ratio from deposits generated between 16 September and 11 November, saying it was a temporary measure that would be reviewed on or before 9 December.

Traders called it a drastic move intended to dent the rally in bond markets, adding that the RBI could have opted for more modest measures such as sucking out some of the liquidity through sales of market stabilisation bonds or telling banks to park funds under reverse repos, Reuters reported.

The benchmark 10-year government bond yield gained 8 basis points, to 6.343%, compared to Friday’s close of 6.231%. Bond yields and prices move in opposite directions.

So far this year, FIIs have bought $4.57 billion in equities and sold $3.02 billion in debt.

Most Asian currencies advanced as the dollar index and US treasury yields dropped, while oil prices declined after a planned meeting on Monday between OPEC and non-OPEC producers was cancelled.

Japanese yen was up 1.23%, South Korean won 0.6%, Taiwan dollar 0.33%, Singapore dollar 0.33%, China offshore 0.3%, China renminbi 0.25%, Indonesian rupiah 0.2% and Thai baht rose 0.2%. However, Malaysian ringgit was down 0.08%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 100.79, down 0.69% from its previous close of 101.49

 

Sources :.livemint.com

India Imports 17.2 Lakh Tonnes Of Wheat This Year

 Indian flour mills have imported 17.2 lakh tonnes of wheat from Ukraine, Australia and France so far this crop year to meet domestic shortages.

Additional 6-7 lakh tonnes of wheat shipments are expected to arrive in the coming months of the 2015-16 crop year (July-June), taking the country's overall imports to 24 lakh tonnes this year.


Last year too, private flour millers had purchased about 5 lakh tonnes of wheat from Australia for the first time in a decade, due to sluggish supply of domestic high protein wheat and lower international prices.

"So far, 17.2 lakh tonnes of wheat has been imported from Ukraine, Australia and France. We need more and additional 6-7 lakh tonnes are expected till February," Roller Flour Millers' Federation of India Ex-President M K Datta Raj told PTI.

Of the total exports till date, about 10.7 lakh tonnes were purchased from Ukraine, 5 lakh tonnes from Australia and 1.5 lakh tonnes from France.

Wheat imports are being undertaken to meet domestic shortages and moreover the grain is available in the global market at much lower than the local prices, he said.

For instance, imported red wheat was costing Rs 1,880 per quintal for delivery in Bengaluru, while the local wheat was quoting higher at Rs 2,060 per quintal.

Similarly, imported white wheat was costing Rs 2,080 per quintal compared with Rs 2,400 per quintal delivered from Uttar Pradesh.

Stating that more import deals are expected in the coming months, Raj said this is because state-run Food Corporation of India (FCI) has restricted wheat sale to bulk users.

He also demanded that if the government further brings down the import duty on the grain to zero from the current 10 per cent, more wheat could come from abroad.

"Weakening of rupee is increasing the cost of imports. It would be better if the government soon takes a call on this issue," he said.

FCI is selling more wheat in North India to check retail prices of wheat and wheat flour, which have shot up by 23 per cent in the last one year.

For instance, retail price of wheat in Delhi has gone up to Rs 24 per kg from Rs 19 per kg in the year-ago period. Similarly, retail price of wheat flour has increased to Rs 27 per kg from Rs 21 per kg, as per the government data.

Rising wheat imports and spike in retail prices indicate short fall in the domestic output in the 2015-16 crop year, but the Agriculture Ministry has maintained production to be 93.50 million tonnes despite drought in over 10 states.

At present, the country is consuming the wheat grown in 2015-16 crop year. The new crop is being sown at present and will arrive in the market only in April.

 

Sources :.business-standard.com

Handloom & Handicraft Industry Eyes New Markets For Exports

 The Textiles Ministry is looking to concentrate on new markets and opportunities for local handloom and handicraft sector as many global companies are willing to tie-up with Indian weavers and artisans. “There is a huge scope for promoting Indian handloom and handicraft products in the niche markets world over,” said Rashmi Verma, Textiles Secretary, at an Assocham event held in New Delhi on Friday.

While most of the sectors registered a decline in exports of Indian products to global markets, export of handicrafts continued to grow at the rate of 17 per cent. “All stakeholders should make efforts to engage with artisans and weavers in the country and hand-hold them not only for ensuring that they get right price and market for their products and also get recognition which they deserve in the world and domestic markets,” she added.

The Union Textile Ministry has signed memorandum of understanding (MoU) with 20 e-commerce companies to engage with artisans and weavers in different handloom and handicraft clusters across India and help them market their products directly. “This will go a long way in ensuring that they get the right price for their product as they are able to sell their product directly to the consumer,” said Verma.

The government is also taking steps for skilling weavers, for giving them design inputs, quality raw material, tools and upgrading their looms to empower them so that they continue to remain engaged in this craft.

“We are finding that younger generation is slowly getting disinterested in this sector and are moving towards information technology (IT). The Textiles Ministry has taken an initiative for training children of weavers and artisans to become entrepreneurs so that they can emerge as leaders in producers’ groups and market their products through e-commerce and other channels directly. This is also in one way trying to attract children of weavers and artisans back into this trade,” she said.

She further said that there are a number of design workshops especially for the weavers and artisans whereby they are informed about current market trends and demand of the market because they have to be sensitised to the needs of the market and only then they will be able to produce what the consumer wants and not try to sell whatever they have made.

According to Textile Ministry’s analysis, many of the weavers and artisans have become workers and labourers in the hands of traders or exporters. “They get paid wages on a daily basis on whatever work they do in one day, so instead of selling their craft and talent, they are now selling their labour, as a result, this has disinterested the young generation,” she said.

Dependence upon middle men for raw material, working capital and even the design are other factors forcing the weavers and artisans to sell off their talent and craft. “It is very-very important that we all together take steps so that dignity of the weaver and artisan is restored and we empower them to be able to sell their talent and their products and not their labour,” stated Verma.

She added, “Sometimes, it is important to have these traders and exporters because they give them the kind of market which these products deserve but it is also important to ensure that these people continue in the tradition of handloom weaving and handicrafts by empowering them by ensuring that they get working capital, are able to get good designs and also have a marketing nexus of their own.

 

Sources :.business-standard.com

Pakistan Stops Import Of Cotton From India Amid Tension

Pakistan has suspended the import of cotton and other agriculture commodities, including vegetables, from India due to rising tensions between the two countries along the LoC, a media report here said.

Officials of Department of Plant Protection (DPP) said that import of agri items from India through the Wagah border crossing and Karachi port and issuing permits for future imports has been halted, the Dawn reported.

Cotton importers and customs clearing agents claimed that the department had stopped the import of agriculture commodities from India without a warning or written order because of increase in tensions across the LoC.

Imran Shami, chief of DPP which is a subordinate department of the national food security and research ministry, however sought to dispel the impression.

"We have stopped import of tomatoes and other fresh vegetables in order to protect our farmers. We have enough tomato and other vegetables stocks, which we import from India only in case of shortages in the domestic market," he said.

The reason behind the "suspension" of cotton imports from India was, nevertheless, different, he said.

"No. We have not stopped cotton imports from India. It has just been halted over reports that the Indian exporters are not meeting our bio-security conditions. We're looking into these reports and will lift restriction on cotton imports if our apprehensions are proved wrong," Shami said.

He said only those cotton consignments would be allowed to enter Pakistan through surface or sea routes where importers had already secured permits from his department and carried phyto-sanitary certificates.

"Our cotton consignments are not being allowed to enter Pakistan through Wagah and Karachi for reasons known to the ministry but cheaper, subsidised Indian yarn is being brought in without any let or hindrance. At least 11 trucks of Indian yarn entered Pakistan on Thursday when the department stopped cotton consignments from coming to this side of the border," a textile factory owner told Dawn.


He said the suspension of cotton import from India would create a huge problem for the textile exporters as the truncated domestic crop target of 11.25 million bales for this year appeared difficult if not impossible to meet.


"The industry requires 14 million bales. We will still be short by three million bales of cotton even if the crop target is achieved," he said.
Top Comment
Dear Mr. Modi, you keep harping on the sacrifices of the Indian Soldiers at the Indo - Pak Border why have you not till date taken away the MFN status given to Pakistan. Again Pakistanis have snuubed... Read MoreSanjeev Sikka


He said cotton shortages after the ban on Indian imports would make domestic prices shoot up at the expense of exports.


Pakistan had imported 2.7 million bales of cotton (1 bale is 170 kgs) - about 40 per cent of India's total cotton exports in 2015-16 - due to crop failure that wiped off 0.5 per cent of GDP growth. The industry is expecting to import 2 million bales this year.
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Officials of Department of Plant Protection (DPP) said that import of agri items from India through the Wagah border crossing and Karachi port and issuing permits for future imports has been halted, the Dawn reported.

Cotton importers and customs clearing agents claimed that the department had stopped the import of agriculture commodities from India without a warning or written order because of increase in tensions across the LoC.

Imran Shami, chief of DPP which is a subordinate department of the national food security and research ministry, however sought to dispel the impression.

"We have stopped import of tomatoes and other fresh vegetables in order to protect our farmers. We have enough tomato and other vegetables stocks, which we import from India only in case of shortages in the domestic market," he said.

The reason behind the "suspension" of cotton imports from India was, nevertheless, different, he said.

"No. We have not stopped cotton imports from India. It has just been halted over reports that the Indian exporters are not meeting our bio-security conditions. We're looking into these reports and will lift restriction on cotton imports if our apprehensions are proved wrong," Shami said.

He said only those cotton consignments would be allowed to enter Pakistan through surface or sea routes where importers had already secured permits from his department and carried phyto-sanitary certificates.

"Our cotton consignments are not being allowed to enter Pakistan through Wagah and Karachi for reasons known to the ministry but cheaper, subsidised Indian yarn is being brought in without any let or hindrance. At least 11 trucks of Indian yarn entered Pakistan on Thursday when the department stopped cotton consignments from coming to this side of the border," a textile factory owner told Dawn.


He said the suspension of cotton import from India would create a huge problem for the textile exporters as the truncated domestic crop target of 11.25 million bales for this year appeared difficult if not impossible to meet.


"The industry requires 14 million bales. We will still be short by three million bales of cotton even if the crop target is achieved," he said.
Top Comment
Dear Mr. Modi, you keep harping on the sacrifices of the Indian Soldiers at the Indo - Pak Border why have you not till date taken away the MFN status given to Pakistan. Again Pakistanis have snuubed... Read MoreSanjeev Sikka


He said cotton shortages after the ban on Indian imports would make domestic prices shoot up at the expense of exports.


Pakistan had imported 2.7 million bales of cotton (1 bale is 170 kgs) - about 40 per cent of India's total cotton exports in 2015-16 - due to crop failure that wiped off 0.5 per cent of GDP growth. The industry is expecting to import 2 million bales this year.
Stay updated on the go with Times of India News App. Click here to download it for your device.

 

Sources :timesofindia.indiatimes.com

India's April-September Tea Exports Drop By 2%

NEW DELHI: India's tea exports declined by 2 per cent to Rs 2,084.06 crore in the first six months of the current fiscal.

In the April-September period of last year, the total value of tea exports was Rs 2,124.97 crore, according to Tea Board's latest data.

In terms of quantity, the exports have dipped to 101.04 million kg from 106.36 million kg in the corresponding period last fiscal.

As per the Tea Board, the exports in value terms remained slightly higher in the six-month period of the 2016-17 fiscal on better unit value realisation.

The export realisation was Rs 206.26 per kg as against Rs 199.79 per kg a year ago.

Tea export from North Indian states -- Assam, West Bengal and others - was marginally lower at 58.10 million kg in the April-September period as against 58.38 million kg in the year-ago period.

 Similarly, the overseas shipment from South Indian states -- Tamil Nadu, Kerala and Karnataka -- was down at 42.94 million kg as against 47.98 million kg in the said period.

Whereas, tea production is estimated to have been 795.89 million kg in the first six months of this year, which is almost same as it was in the year-ago period.

India is the second-largest tea producer in the world after China, with over 70 per cent of the beverage produced, being consumed in the country itself.

In the full 2015-16 fiscal, the country sold 232.92 million kg in the overseas market and the export realisation was about Rs 4,493.10 crore.

 

 

Sources :economictimes.indiatimes.com

Rupee Opens 5 Paise Up At 68.11 Against Dollar

NEW DELHI: Indian rupee opened nearly 5 paise up at 68.11 against dollar on Tuesday on account of some selling of American currency by banks and exporters. Meanwhile firm opening of domestic equity markets also supported sentiments.

At 9.15 am, rupee was trading 3 paise up at 68.13 against dollar. Benchmark equity indices BSE Sensex and NSE Nifty were up by 163.02 points and 60.05 points at 25928.16 and 7,989.15.

On Monday, the local currency slipped for the second straight day and closed 3 paise down at 68.16 against dollar. In cross-currency trades, rupee gained against the pound sterling to finish at 84.14 against 84.66 on last Friday, but fell against the euro to settle at 72.79 as against 72.37. It strengthened further against the Japanese yen and close at 61.62 against 61.72 per 100 yens earlier.

According to market experts, sustained foreign money outflows mainly affected the rupee movement against the dollar on Monday. However, weakness of dollar in the international market capped the rupee fall against the dollar. Foreign portfolio investors stood net seller on Monday and sold shares worth Rs 873.11 crore, according to the data available with NSDL.

HDFC Securities in a research note said, "We advise trader to remain long in USDINR Nov. Fut. for new all time high target above 69.21, keeping a stop loss at 67.50 on closing basis."

 
The 10-year benchmark bond yield eased further and opened at 6.28 per cent on Tuesday against previous close of 6.30 per cent

 

Sources:economictimes.indiatimes.com

Steel Imports Drop 39% To 4.5 Million Tonnes In April-October

NEW DELHI: Helped by steps to protect the industry, steel imports have declined 39 per cent to 4.5 million tonnes during April-October of this fiscal over the same period a year earlier.

"The government has taken various steps in the interest of the domestic steel industry from unfair foreign competition and the same have yielded positive results," Steel Minister Chaudhary Birender Singh said in a reply to the Lok Sabha.

Price realisation has improved, imports of steel have declined by 39 per cent to 4.5 million tonnes (mt) during April-October 2016 as against the corresponding period last year, the minister said.

Since the beginning of 2014-15, the Indian steel industry has witnessed severe stress due to surge in imports from countries saddled with excess capacity and fall in domestic prices.

In India, steel prices of HR coils fell to Rs 30,000 in January 2016, from a high of Rs 47,000 in April 2014.

Volume of steel imports increased to 11.71 mt in 2015-16, from 5.45 mt in 2013-14. With the decline in domestic steel prices, the net sales realisation and profit margins of domestic steel producers fell and the erosion in profit margin for the steel companies significantly decreased their debt servicing capability.

"The government has various export promotion schemes like Merchandise Exports from India Scheme (MEIS), duty exemption scheme, interest equalisation scheme etc under the Foreign Trade Policy 2015-20 which are also available for export of iron and steel goods," he said.

 

Sources :economictimes.indiatimes.com

Micromax To Start Making Smartphones In India By March 2017

NEW DELHI: Micromax Informatics is planning to make smartphones on a completely knocked down or CKD basis in India, by March next year, which could make it the first local manufacturer to take the plunge in the market where all but only Samsung is assembling phones.

"We're on the verge of importing our first set of CKD units," Micromax co-founder Vikas Jain said, adding that the company was looking at beginning before the end of the financial year.

"While we are working on logistics and building infrastructure, it will be at our new facilities either at Telangana or Bhiwadi," he said. The company is yet to decide the capacity of production from CKD units but is expecting its first shipment of CKD units soon. The move will be a step up in value addition for the home-bred handset maker, which makes 3 million phones a month in Rudrapur and Telangana factories, more than half of which falls in the smartphone category.

The company's third plant is set to come up in Bhiwadi, Rajasthan, and the fourth one in Bhopal, Madhya Pradesh. An investment of Rs 2,000 crore has been marked out for making phones and electronics such as televisions, tablets and accessories locally, over the next five to six years.

At present almost all companies that sell phones in India, either import fully built units or semi-knocked down (SKD) phones from China, which can be assembled together with little manufacturing requirement. The process, however, is labour intensive and therefore offers jobs in large numbers to
fairly low skilled workers.

Making phones from completely knocked down (CKD) versions, involves mounting of components onto a printed circuit board (PCB) mechanically, where
the PCB and other components are required to be imported separately from China, and then put together. In terms of value addition, CKD is a step above SKD, and lays the groundwork for assembling components that in turn go into making handsets.

"PCB assembly done locally can provide a 2% cost improvement on bill of material, which can in turn reduce overall cost of the phone," Tarun Pathak, senior analyst at Counterpoint Research said.

The move will aid in quality control and better control on design, which local handset makers have begun to do in house.

 

Sources :economictimes.indiatimes.com

Cash Crunch Puts Brake On India's Cotton Exports; Rivals To Gain

Exports of 1 million bales of cotton from top producer India have been delayed after a government move to ban high-value currency notes prompted farmers, who prefer cash payments, to postpone sales, industry officials told Reuters.

The supply crunch has driven up prices in India to levels higher than in the global market and could force buyers to switch to other producers like the United States, Brazil and African countries. It could also curb India's total exports in the 2016/17 year marketing year that started on Oct. 1.

"Supplies are very limited in the market. Farmers are not selling cotton right now as they need payments in cash and it is not available," said Chirag Patel, chief executive officer of Indian exporter Jaydeep Cotton Fibers.

Earlier this month, Prime Minister Narendra Modi scrapped 500 rupee and 1,000 rupee bills to crack down on corruption. But the move disrupted trading of farm commodities like cotton and soybean as most farmers prefer payments in cash.

"November remains a peak supply month but now supplies have stopped due to the cash crunch. We are ready to give farmers cheque, but they are insisting on cash," said Pradeep Jain, a ginner based in Jalgaon in Maharashtra.

Expecting a bumper crop of 35 million bales, Indian traders had contracted 2 million bales for exports to China, Vietnam, Bangladesh and Pakistan for shipments in November to January. But traders have managed to ship only around 300,000 bales and nearly 1 million bales that were due to ship in November and December are getting delayed, three exporters told Reuters.

India's inability to ship promptly could force buyers to switch to other suppliers like Brazil and the United State, said Keith Brown, principal at cotton brokers Keith Brown and Co in Moultrie, Georgia. "In fact, this may be one reason why U.S. cotton is going higher at harvest time."

New York cotton futures last week touched a high of 72.75 cents per pound, the loftiest since August. They have risen about 5 percent over the past fortnight, versus a 10 percent gain in Indian prices.

The surge in local prices is also making signing new export deals difficult for India as overseas prices are lower than local prices, Jaydeep Cotton's Patel said.


The disruption in exports will have an impact on global prices as it reduces the overall supply, said Rebecca Pandolph, statistician of International Cotton Advisory Committee. "How much of an effect will depend on how long the situation lasts."


However, industry officials say the crunch is temporary and prices will moderate as India is set to harvest a bumper crop. Last year, the country shipped out 6.9 million bales.


"The Indian crop is still very big and if price pressure doesn't come now, then it's only being delayed and that pressure will arrive at some point,

 

Sources:timesofindia.indiatimes.com

Hyundai India Targets To Roll Out Its 10 Millionth Car By H1 Of 2021

 Hyundai Motor India Ltd (HMIL) sets a target of rolling 10 millionth car by the first half of 2021 from its Sriperumbudur manufacturing facility, near Chennai, from where the company on Monday rolled out its seven-millionth car.

Creta AT got the distinction of being the seven-millionth car.

With this, HMIL has achieved the second best position in Hyundai Motor group amongst its overseas peers, only after China. It is also the first auto manufacturer in India to achieve this feat in a record time within 18 years of commercial operation.

It may be noted, HMIL rolled out its first millionth car, a Santro, in 2006 just eight years after commencement of commercial production in 1998.

Thereafter, production picked up momentum, with the next millionth milestone being achieved within an average of 18 -19 months. The five-millionth car was flagged off in October 2013.

Managing director and Chief Executive Officer of HMIL, Y K Koo, said, " HMIL has always set new benchmarks in terms of quality and customer delight by introducing new products with new technology and design to the Indian market, demonstrating superior manufacturing prowess. Our 'Made in India' products have impressed global and Indian customers alike."

"We now have to move to realise our vision as announced during our 20th year of foundation on May 6th, 2016, of being the Market Leader, Great place to work, Most loved and trusted the brand with Modern premium brand essence to touch 10 million units within the first half of 2021," Koo added.

HMIL has held the top exporter position consistently for 12 years since 2004 with a volume of 24,64,723 to date. It currently has ten car models across segments — Eon, i10, Grand i10, Elite i20, Active i20, Xcent, Verna, Creta, Elantra, Tucson and Santa Fe. HMIL's fully integrated manufacturing plant forms a critical part of HMC's global export hub.

It currently exports to around 92 countries across Africa, Middle East, Latin America, Australia and the Asia Pacific.

 

Sources :business-standard.com

Eow Starts Probe Into Rs 50Cr Sugar Export Scam

 The economic offences wing (EOW) of the city police has begun investigation into the alleged fraudulent export of two lakh tonnes of sugar by 21 sugar factories in the state. The fraud was initially estimated at around Rs 22 crore, but the police believe it may go up to Rs 50 crore.

Principally, sugar was exported in 2007-08 at rates lower than market prices, but the transport company was paid at rates higher than that prevalent at the time. Around 200 accused have been listed, including the chairmen, managing directors and directors of the 21 factories in Kolhapur, Sangli, Satara, Ahmednagar, Solapur and Pune.


An advocate, Govind Patil, had filed the case with the police. "The modus operandi was that over two lakh tonnes of sugar were sold to Kenya, Tanzania and Sri Lanka at a much lower price than the market rate in India. Moreover, the transportation fees given to M/s Shakti Credit Limited were much higher than market rates. During our initial probe, we found that it was the transporter's firm that had brought the proposal of export and the remaining work was done with its help," said a police officer.


A Kolhapur resident, Vasant Apte, had filed a petition in the Bombay high court in 2008 seeking a probe. The HC directed the Sugar Committee to inquire. During its second inquiry, sugar commissioner Raj Gopal Deora found a loss of crores and the court ordered Mumbai police to probe. "After a preliminary inquiry, we registered a cheating case in August 2016 against the chairman, managing directors, directors and office bearers of M/s Shakti Credit. We have written to all the sugar factories to furnish records of all exports during 2007-08 and are waiting for their reply. We have also made an office bearer of the Maharashtra Sugar Federation an accused," added the officer.


The sleuths said they are trying to track how Shakti Credit got the tenders for the exports, mainly through JNPT, Kandla and Port Bundar ports. The role of some officers of the Indian Sugar Export-Import Pvt Ltd is under probe.

 

 

Sources ; timesofindia.indiatimes.com
 

India Needs Strategy For Dal Production; Here’S Why

There is by now substantial agreement amongst analysts that a strategy for dal production which ensures supplies and a reasonable degree of self-reliance is sorely needed, and the country cannot go from one crisis to another without a well-worked-out policy.

However, the discussion is flawed on its assessments of what governments can and cannot do and on the lack of a short and medium strategy to enhance production. Former CACP chairman Ashok Gulati has endorsed the proposal that government use a fund to stabilise prices. But India’s pulse problem is not contracyclical. Funds work if you have to support prices in one year and sell in another to replenish your fund. The pulses problem is of an endemic shortage which keeps on rising. You will need subsidies and not funds. Earlier imports where around 2 million tonnes; but now they are in the range of 3.5-4.5 million tones and we are running on a downstairs case, so more maybe ahead. Again, governments have been notoriously poor managers of contracyclical policies. My friend Sanat Mehta, who passed away recently, set up a committee under me to solve the groundnut oil problem in Saurashtra. I wanted a contracyclical fund. Shankar Lal Guru, then a prominent market regulator of the Unjha market-yard, told me, “When I trade in mungphali (groundnut), even my munim does not know whether I am buying or selling. But your minister announces his policies, and so we are able to fleece him.”

Second, they want imports. If your policies are as bad as they have been, you will need imports. Since imports are expensive, and particularly given we are poor importers, the need for subsidies for urban consumers is felt. But that will give very wrong signals to the country’s farmers. Incidentally, imports and subsidies will subsidise foreign farmers, in Canada, the US, Australia as also in East Africa and Myanmar. India’s own farmers will suffer. It is like pouring water into a leaking bucket. We will give negative signals before the next rabi season to our agriculturists. They already get the wrong signals, as Gulati points out, from the government’s support to wheat, and a partial import policy will make matters worse. It is of some importance that imports are made with a mild tariff and subsidised as they are even now.

No one is worried about the future. A committee I had chaired on pulses strategy, of which the report is printed, worked on a short- and medium-term strategy to enhance production; it also included a Bt pulses seeds strategy. The report is gathering dust, after some activity when Sharad Pawar was the Union agriculture minister.

Then, of course, our old friend, the Essential Commodities Act, is there. So, there are stocking limits. Not only for traders, but retailers, exporters, importers, implemented by a so-called reform-friendly, market-friendly regime. Some ‘show’ raids are done and the figures of pulses obtained are touted. Not a single grain of pulse has been added to the nations granaries, apart from those touted in the histrionics. If the past is any guide, and as many official reports have shown, such regulations are the major cause of black money. Also, may be, of corruption.

What is the government doing to enhance more production in the upcoming rabi season? Who is responsible for that, since the Planning Commission has been abolished? Unless perverted policies are followed, the price signals are there for the kisan. A seeds policy is essential, as also availability of pesticides, as Rallis has shown in its I Shakti producer companies, which come from a committee I chaired when Arun Jaitley was the minister of corporate affairs. What is happening to the 4 million kisans who have moved to census towns, thousands of them, each crying for market infrastructure; not the APMC structure, thank you? If the government were to support the kisan in what he does, it would never regret it. Can we assure him that the dal he produces will be purchased at 50% above the support price, way below the import price in terms of landed costs in the consuming centres? We supported him in 1975, 1988 and 2008 and he never let us down. Its time we got our act together again.

The author is chancellor, Central University of Gujarat and vice-chairman, Sardar Patel Institute of Economics & Social Research. He is also a former minister of power, planning, and science & technology.

 

Sources :.financialexpress.com

Early Drop In Mercury Turns Grapes Sour For Nashik Vineyard Owners

Nature continues to be unkind to the farmers of Maharashtra. After three successive years of hailstorms and drought, this year a good rainfall brought them some hope for their kharif crop

. But the parting kick of the retreating monsoon flooded their villages and farms and destroyed much of their produce. Now the unprecedented chill spreading across the state too early this season is fast destroying the hope of one section of farmers in Nashik—the grape growers.

Last week, grape producers from across the district had submitted a memorandum to Union roads and transport minister Nitin Gadkari to seek his intervention with the government and the Nashik District Central Co-operative Bank (NDCC) for extension of crop loans to one lakh farmers who had been left without funds at all. The NDCC has disbursed Rs 1740 crore worth of loans to farmers but fell short of funds following the government’s failure to make good the subsidy.

Nearly 75% of the grapes grown in Nashik, which is India’s grape county, finds its way to markets in Europe, making for about 60% of the total exports from India.

This is the month when farmers have to prune the vines to help the clusters to grow in proper proportion and without loans from the NDCC they do not have enough funds for these operations including for labour charges and pesticides. But while this man-made hurdle can be overcome, what is now worrying farmers majorly is the dipping mercury in the district which, on Monday was at 8.6 degree Celsius, the coldest after Ahmednagar at seven degrees Celcius.

Says Dinkarnath Aher, a farmer who has been in the business since 1985 with 25 acres of grape farms stretched across the Niphad tehsil, which is the main grape growing area in the country: “We cannot afford to have the temperature drop so suddenly. It damages the berries on the cluster which crack and this renders them useless for export. Moreover, if the temperature drops below eight degrees celsius, there is danger of powder mildew and other fungi taking over the crop which will lead to complete destruction of the produce which will not be fit for even the domestic market.”

Farmers at the moment are doing their best to save their crop by covering the vines in jute sacks and blankets, burning dead leaves beneath the vines to provide them warmth or using warm water to sprinkle the crop in the hope it will take away the chill. “But these are temporary remedial measures.”

The weather observatory has forecast further dips in temperature and that is worrying farmers about the future of their crops which will be ready to harvest in a month. But according to Jagannath Khapre, president of the Grape Exporters’ Association of India, the increasing frost in the air can cause injury to the berries and also slow down the metabolism of the vine. “The grape crop is generally harvested in 120 days. But the increasing cold slows down the metabolism and it can take about 160 days to harvest the crop, provided it has not been damaged by the chill.’’ Anything further than five degrees Celsius can condemn the entire crop to destruction, he adds.

Already the excess rainfall in some areas has left farmers with the prospect of less yields across the two lakh acres in the Banganga valley in Niphad tehsil which is all given over to the crop. Any further vagaries of weather would condemn them to virtually no yields at all, adds Aher.

Maharashtra is India’s largest grape producer and nearly 80% of the produce comes from Niphad in Nashik district though Pune and Solapur also grow some quantities of grape as does Bangalore in Karnataka. Normally such severe chill does not set in so early in the grape season and much of the clusters are fully grown before temperatures dip below 10 degrees Celsius. This year, however, the mercury has been falling steadily since Diwali. Farmers are left with little but to pray to the weather and sun god to save their crop.

 

Sources :hindustantimes.com

Demonetisation Impact: $1 Billion Worth Of Gold Imported So Far Since Nov 9

 A day after Prime Minister Narendra Modi announced that Rs 500 and Rs 1,000 currency notes would cease to be legal tender from the midnight of November 8 – a move aimed at cracking down on the flow of black money – those in possession of unaccounted wealth were seen rushing to jewellers to buy gold.

While these people were willing to pay huge premiums, jewellers were ready to accept old currency notes. The transactions took place on past-dated bills; even VAT was paid. As a result of this rush, there was a sudden spurt in demand for gold. According to market estimates, as much as $1 billion worth of gold, or around 30 tonnes, has been imported since November 9.
 
GFMS Thomson Reuters estimates that India’s gross official import of gold was worth nearly $1.5 billion as of November 14. Of this, as much as $900 million worth of the metal was imported after the demonetisation of high-value legal tenders. While this estimate does not exclude gold imported for exports, such gold would have been a small part of total imports. It should be noted that the government had last month said that for according the status of a nominated agency, the export of gold jewellery from export-processing zones (EPZs) and export-oriented units (EoUs)  would not be taken into account.

 
The country’s import of the yellow metal had stood at about $3.5 billion in October, according to GFMS Thomson Reuters estimates.
 
The demand for gold had dropped in India during pitrupaksha, a 15-day period considered inauspicious by the Hindus for purchase or sale assets. But it significantly increased after that period, especially in the days leading up to Diwali.
 
According to Shekhar Bhandari, senior executive vice-president and business head, global transaction banking and precious metals, Kotak Mahindra Bank, said: “Gold demand has been good since Diwali, and the trend continues. In the past few days, especially amid a marriage season, customers have been seen using debit cards to make payments for jewellery.” This trend is being seen widely among organised or big jewellers.
 
Meanwhile at Zaveri Bazar, Indian Bullion and Jewellers Association (IBJA) on Sunday sent messages to jewellers that there was the possibility of the income-tax department asking them to deposit old currency with it by November 15, to stop the malpractice of selling gold at a premium for banned currencies. The last date for depositing the banned currency notes with banks or exchanges has otherwise been fixed as December 30.
 
So far, however, there has been no official communication on this from any department, according Surendra Mehta, Secretary, IBJA. “No jewellers, to our best knowledge, are accepting old notes now,” Mehta said.
 
Against an average monthly import of 30 tonnes since February, October alone saw an import of an estimated $3.5 billion, or 56 tonnes, of gold.
 
No one is ready to predict the import trend in the coming weeks, as there are fears that the government might impose a ban on gold imports. However, there has been no official word on this so far.

 

Sources:.business-standard.com