Rupee Closes Near 4-Week High Against Us Dollar At 66.65

Mumbai: The Indian rupee on Wednesday rose for the fifth consecutive session and hit a four-week high against the US dollar, after foreign institutional investors (FIIs) continued to buy equities in the local markets. FIIs bought $812.87 million in equities since last ten consecutive sessions.

The home currency closed at 66.65—a level last seen on 12 May, up 0.19% from its previous close of 66.78. The rupee opened at 66.78 per US dollar and touched a high of 66.62—a level last seen on 12 May.

India’s benchmark Sensex index rose 0.04%, or 10.99 points, to 27,020.66. So far this year, the Sensex has gained 3.46%.

The government will issue Index of Industrial Production (IIP) data on 10 June for the month of April. According to Bloomberg analyst poll, IIP will be at -0.6% in April against 0.1% in March.

Meanwhile, India’s 10-year bond yield closed at 7.49%—a level last seen on 30 March, as compared with its Tuesday’s close of 7.483%.

So far this year, the rupee has weakened 0.74%, while FIIs have bought $2.66 billion from the local equity market and sold $1.25 billion in the debt market.

Most Asian currencies closed higher. South Korean won rose 0.5%, Taiwan dollar 0.26%, Japanese yen 0.23%, Philippines peso 0.21%, Thai baht 0.14% and Singapore dollar 0.13%. However, Malaysian ringgit was down 0.16% and Indonesian rupiah 0.05%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 93.649, down 0.2% from its previous close of 93.828.

 

Source:livemint.com

India May Import 3 Lakh Tn Natural Rubber From Thailand

New Delhi, (PTI) Faced with rubber shortage, India is looking to import about three lakh tonnes (LT) of natural rubber from Thailand to meet its domestic requirement.

Indias annual demand for natural rubber is more than 10 lakh tonnes, while the domestic production is stagnant at about 5 lakh tonnes.

"The rubber authority of Thailand is offering about 3 lakh tonnes of natural rubber to India. Negotiations have started between the domestic tyre, rubber industry and the Thai authority," All India Rubber Industries President Mohinder Gupta said.

A high-level delegation of Thailand, comprising governor of its rubber authority Titus Suksaard, is on a visit to India for negotiations. "As of now we are in talks with Indian industry players to export about 3 lakh tonnes of natural rubber," Suksaard said adding that Thailand want to at least double its exports of natural rubber to India to 4 lakh tonnes. Suksaard also invited Indian rubber and tyre industry to invest in the proposed rubber city which is being established in Thailand for rubber and tyre industry.
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"In view of the rising gap in domestic production and demand of natural rubber, the visit of Thailand delegation has significance and it will yield good results for both the countries," All India Tyre Manufacturers Association Director General Rajiv Budhraja said.

The domestic rubber production declined 13 per cent to 5.63 lakh tonnes in 2015-16, while imports during the period rose by 3 per cent to 4.54 lakh tonnes.

In April last year, the government hiked the import duty on natural rubber to 25 per cent or Rs 30 per kg, whichever is lower, to protect the interest of domestic growers and curb imports.

 

Source:indiatoday.intoday.in

Halting Diesel Imports May Not Translate Into Huge Savings For Oil Companies

 The latest strategy worked out by Indian Oil Marketing Companies (OMCs) to stop importing costly diesel from the international market and source cheaper fuel from domestic private refiners would not translate into significant savings for the state-run firms or have any noticeable impact on the country’s fuel bill, according to experts.

India consumed nearly 74 million tonnes of diesel last financial year. Around 180,000 tonnes – or a miniscule 0.2% -- of this demand was met through imports. The diesel imports came at a cost of Rs 655 crore, around 0.1% of the country’s total oil import bill of Rs 4,82,000 crore in 2015-16.

“The volume and value of imports is miniscule. India is a net exporter when it comes to petroleum products including diesel. And the exports are only going to rise with the commissioning of IOC’s Paradip refinery. The impact of the deal with private refiners, in terms of gain for OMCs or the effect on oil imports, would not be a directional change. Also, as private refineries are mostly export oriented, it does not make much sense for the firms to sell the product in the domestic market a cheaper rate,” said a senior analyst from a consultancy firm.

Rising domestic demand and subdued global prices have so far fuelled Indian diesel imports, which have more than doubled from 84,000 tonnes in 2013-14. Also, private refiners had refused to bear central sales tax and coastal freight costs. The situation has now turned on its head.

Asia’s gasoil crack for the benchmark 500 parts per million (ppm) grade has risen to nearly $12 per barrel, almost double the value on 6 April as strong demand driven by a severe dry season has bolstered the market. Besides, the OMCs have been able to convince private refiners on sharing of sales tax and inter-state coastal freight costs.

“There have been discussions with the private refiners for quite some time on this issue. Now a final deal has been struck. Our Chairman has also said that imports were resorted to last fiscal only to meet the emergency demands in some parts of the country,” said a senior executive from Indian Oil Corporation (IOC).

News agency Reuters has reported India's state refiners may halt diesel imports after working out a temporary mechanism to resume buying the fuel from private processors if global diesel prices remain at current levels.

 

Source:.business-standard.com

India Cotton Exports Drop On Thin Supply Pushing Prices Higher

MUMBAI: Cotton exports from India, the world's biggest producer, have nearly halted as local prices have rallied due to tight supplies because of drought, forcing key importers like Bangladesh, Pakistan and Vietnam to turn to other suppliers.

The freeze in export will prompt Brazil, Australia and United States to raise shipments and has pushed global prices to near their highest since August.

The price rise could subsequently push up fabric and clothing prices and put pressure on the margins of garment makers.

"In last three-four weeks Indian exporters could not sign a deal. Our cotton is more expensive than Brazilian or Australian supplies," said Chirag Patel, chief executive officer at Jaydeep Cotton Fibers Pvt. Ltd, a leading exporter.

The landed cost of Indian cotton for buyers in Pakistan and Bangladesh is at 75 cents to 76 cents per lb compared to around 73 cents for Brazilian cotton, he said.

Pakistan and Bangladesh prefer Indian cotton due to lower freight charges


Local cotton spot market prices have surged 10 per cent from a month ago to Rs 38,400 per candy of 356 kg (73.5 cents per lb) due to limited supplies after consecutive droughts cut production. A candy is equivalent to about two Indian bales of 170 kg each.

India may produce about 34.1 million bales of cotton in the 2015/16 season that started on October 1, down from last year's output of 38.3 million, the Cotton Association of India (CAI) estimates.

India has exported around 6.5 million bales of cotton so far during the 2015/16 season, with Bangladesh and Pakistan accounting for more than half of the total exports, said Dhiren Sheth, president of CAI. In 2014/15 India exported 6 million bales.

Cotton supplies in spot markets have been dwindling even as domestic textile units are ramping up purchases, Patel said.

In October to April cotton supplies in Indian spot markets fell 12.5 per cent from a year ago.

"The industry failed to judge the impact of drought on the production. Output turned out lower than the initial estimate," said a dealer with a global trading firm.

"Now textile units are aggressively buying to make sure they have stocks for the next four months."

The new cotton crop starts arriving from late September, but this year supplies could start from mid-October as sowing has been held up in key producing states because of a delay in the monsoon rains, said a trader based in Rajkot, Gujarat.

 

Source:economictimes.indiatimes.com

Extend Incentives In Gems And Jewellery Exports: Assocham Urges Government

KOLKATA: Apex industry body Assocham on Wednesday urged the government to extend incentives like interest subvention, merchandise exports from India scheme (MEIS) and others to promote gems and jewellery (G&J) exports that have been marred by global slowdown thereby putting at risk livelihood of over 30 lakh people employed by the sector across India.

"G&J exports from India are likely to remain under pressure this year as well, even though there are indications of improvement in business sentiment in United States of America (USA) which takes nearly half of country's diamond jewellery production," noted an Assocham paper titled '2015-16: A year of dismal export performance for India.'

"Though market share of the USA and Hong Kong in diamond and precious stones' exports has expanded to 29 per cent and 36 per cent respectively over the last few years, market share of the UAE has fallen steadily from one-fifth a few years ago to less than one-tenth of the total exports," noted the paper prepared by the Assocham Economic Research Bureau (AERB).

While import of rough diamonds and semi-precious stones have fallen by over 11 per cent in FY2015-16, the net diamond exports and semi-precious stones have declined by about 43 per cent year-on-year i.e. from $4.2 billion (bn) in 2014-15 to just $2.4 bn in 2015-16.

Besides, exports of jewellery have also fallen by about 17 per cent i.e. from $13.2 bn in 2014-15 to $11 bn in 2015-16. Dubai and Thailand are fast emerging as major jewellery manufacturing hub as a lot of Indian businesses are setting up units there.

The Gold Monetisation Scheme might help reduce reliance on import of gold to meet domestic demand and may have some positive impact during the course of the year, the paper observed.

Assocham has reiterated its appeal to the government for granting 'industry status,' to the gems and jewellery sector to give a fillip to investments and bring down costs of operation as that would also help build trust and faith in Indian brands in global markets and in achieving goals of Make in India.

Modernisation of labour laws, requirement of more export-oriented economic zones, establishment of a gold board, ensuring access to better financing, relaxation of certain taxation laws, segregation of investment and consumption demand, setting up a gold tourism circuit are certain key areas focus on which can help in reviving the G&J sector in the country.

Impact of falling global prices and export volumes has not only affected the G&J sector but petroleum products' exports have also plummeted by over 46 per cent i.e. from about $67 bn to $30.4 bn during the aforementioned period. "This seems to be much larger problem as Indian firms are losing their share in global markets."

The Assocham paper has also suggested for replacing power looms that account for about 65 per cent of fabric production in India by modern shuttle-less weaving equipment, besides it is also required to diversify its export markets away from a few countries in the European Union and the USA to nearby countries in the Asian continent.

Further, Assocham has recommended to urgently put in place the long-pending goods and services tax (GST) to reduce the burden of un-refunded state level taxes to make India's exports competitive.

It has also suggested the government to set up a high-level committee to look into costs of inter-state barriers to trade and suggest a time-bound roadmap to address the same as that would not only provide much-needed relief to the export sector but weld India into a single market much bigger than EU in terms of population.

 

Source:economictimes.indiatimes.com