Rupee Closes At 3-Week High Of 67.14 Against Us Dollar

The Indian rupee on Monday closed at over three-week high against the US dollar, after local equity markets gained nearly 500 points. Gains in the global equity and currency markets also helped the rupee. This was the tenth out of 13 trading sessions when the rupee closed higher.

The home currency closed at 67.14—a level last seen on 17 June, up 0.35% from its previous close of 67.37. The local currency opened at 67.13 a dollar and touched a high of 67.06, a level last seen on 17 June.

India’s benchmark Sensex index rose 1.84%, or 499.79 points, to close at 27,626.69. So far this year, Sensex has gained 5.78%.

Most of the Asian currencies closed higher, bolstered by election results in Japan and Australia and shrugging off concerns that a strong US jobs report might push the US Federal Reserve closer to hiking rates.

South Korean won rose 1.29%, Malaysian ringgit 1.01%, Indonesian rupiah 0.56%, Taiwan dollar 0.28%, and Thai baht 0.17%. However, Japanese yen was down 1.84%, Philippines peso 0.26% and Singapore dollar fell 0.21%.

The government will issue the Index of Industrial Production (IIP) and Consumer Price Index (CPI) based inflation data for May and June, respectively, on 12 July, while Wholesale Price Index (WPI) based inflation data for June on 14 July.

According to Bloomberg analyst estimates, IIP for May will be -0.4% compared with -0.8% a month ago, while CPI will be at 5.79% versus 5.76% last month. WPI will be at 1.3% in June against 0.79% in May.

So far this year, the rupee is down 1.46%, while foreign institutional investors (FIIs) have bought $3.01 billion in equity and sold $1.80 billion in debt markets.

Meanwhile, India’s 10-year bond yield closed unchanged from Friday’s close of 7.385%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 96.562, up 0.27% from its previous close of 96.302.

 

Source:.livemint.com

India Backs African Countries’ Demand For Curbs On Cotton Subsidies At Wto

India is backing major cotton growing African countries in their demand for immediate elimination of cotton export subsidies and a timeline for reduction of domestic support by heavily subsidising members such as the US.

This was agreed to at the World Trade Organisation’s Ministerial meet in Nairobi last December.

“While the four cotton growing African countries (C4) are leading the demand for reduction and elimination of cotton subsidies, India, too, is supporting the cause as its cotton farmers are adversely affected by cheap subsidised cotton from the West both in the domestic and export market,” an official keeping track of the on-going negotiations on agriculture at the WTO told BusinessLine.

At a meeting in Geneva earlier this month, New Delhi, which supports its cotton farmers through a minimum support price (MSP), had underscored the importance of focussing on how much support individual farmers get.

“India said that countries should give information on support per farmer, the average earnings of farmers and the average size farm holding to ensure that all are not painted by the same brush,” the official added.

In the last nine years, of the $47 billion handed out as cotton subsidies by major players, over $24 billion has been given by the US, $15 billion by China, $7 billion by the EU and less than $1 billion by India, according to figures compiled by international think-tank Africa Europe Faith and Justice Network.

Interestingly, Nobel laureate economist Joseph E Stiglitz, at an event in Bengaluru last week, said that the Modi government, like Brazil, should drag the US to the WTO for subsidising its cotton farmers as it was one of the countries worst affected by it.

While India may not have any immediate intention of taking on the US individually on the matter, it is adding its voice to that of the C4 (Burkina Faso, Benin, Chad and Mali) which have pleaded that domestic support programmes of major producers need to be slashed as these were forcing thousands of young cotton farmers in their countries to turn to migration in order to earn a living.

The countries asked members to explain how they intend to implement the Nairobi decision on cotton under the three pillars of export competition, market access and domestic support.

The US is not just one of the biggest subsidy providers but is also the largest exporter of cotton. According to the National Cotton Council of America, the US is expected to export 10.2 million bales in 2016 capturing almost 30 per cent of world trade in cotton of 35.8 million bales, while India would export half of that at 5.4 million bales.

 

Source:.thehindubusinessline.com

Gold Import Falls By 50% In First Half Of 2016

High gold prices have helped the Indian government to keep gold import bill under check. In first six months of 2016, India's gold import bill had been estimated at $9.4-9.6 billion with imports estimated at around 210 tonnes. Compared to the first half of last year, import bill is down over 40%, while import in tonnage is down almost by half.

January was the last month which saw high gold import at 75 tonnes, post which imports have been averaging 27-30 tonnes per month. Even in the month of May, despite Akshaya Tritiya — a festival during which buying gold is considered auspicious — demand was muted.

Analysts, however, say that in the import bill, nearly 15-20 tonnes per month is for exports and only a small portion is imported by gold refineries. March was the worst month for gold jewellery business due to the jewelers strike, following the imposition of excise duty.

However, during the period, especially from March onwards, every month 15-20 tonnes of gold is arriving in the country via the unofficial route. Much lower demand, due to rising prices and high unofficial import flows have resulted in discount on gold in the spot market, quoting between $40-50 per ounce or Rs 800-1,100 per 10 gram to the cost of imports. This is keeping banks away from importing gold.

According to GFMS TR data, imports in 2015 was the lowest in the last many years.

Gold price fell below Rs 25,000 per 10 gram by December end and now in Mumbai it is quoting at Rs 31,260 per 10 gram. Most traders and analysts believe last year's draught and sharp increase in price have kept buyers away.

In the cash market last week, on Friday, gold was available at $100 per ounce discount in the Ahmedabad market, which was never seen before. A spokesperson for newly-created The Bullion Federation said: "There is an urgent need to identify those dealing in gold with cash. All gold trades have to be through banking channels."

However, high discount in spot and even higher discount in cash market has created a situation where four prices for gold are quoted. Today afternoon when gold price was around $1360, cost of import for banks including duty was Rs 32,240 per 10 gram. On MCX, August futures was quoting at Rs 31,630 per 10 gram, which means around $30 per ounce discount to cost of import. In the Ahmedabad market, gold, if purchased through banking channel and with accounted money was quoted at Rs 31,050 (VAT not included) which is at a further discount to MCX price and around $52 discount to cost of imports. However, smuggled gold or in the cash market in Ahmedabad, gold was available at Rs 30,500 per 10 gram, widening the discount further to cost of official imports.

 

Source:http://ift.tt/15HW3lL

  
 

India To Import 5 Lakh Tonnes Of Maize To Check Prices

NEW DELHI: Government will import 5 lakh tonnes of maize to check price rise and hoarding in the wake of fall in domestic production of the crop.

To check prices and prevent hoarding, Commerce and Industry Minister Nirmala Sitharaman has approved importing 5,00,000 MT of maize under Tariff Rate Quota by a state trading enterprise, her ministry said in a tweet.

Under Tariff Rate Quota Scheme, government allows imports of four products, including maize (corn), at concessional rates of customs duty.

At present, maize attracts 50 per cent import duty. However, under the Tariff Rate Quota Scheme, the import duty is zero.

Eligible entities for allocation of quota under the scheme in case of corn include STC, MMTCBSE 0.11 % and PEC.

In June, state-owned trading firm PEC had invited bids for import of 50,000 tonnes of maize (non-genetically modified) to boost domestic supplies in view of fall in production.

As per Agriculture Ministry's third advance estimate, maize production in the country is estimated to have declined to 21.02 million tonnes in 2015-16 from 23.67 million tonnes in the previous year.

India has been traditionally a major corn exporter to southeast Asia but drought and rising domestic demand has cut export supplies.

Poultry sector and starch manufacturers are the major consumer of maize.

The government is also importing pulses to boost domestic availability and check price rise. As of now 46,000 tonnes of pulses have been contracted for supply.

 

Source:economictimes.indiatimes.com

Kenya Glut Forces India To Export Cheaper Tea To Pakistan

KOLKATA: Indian tea exporters are under pressure to lower prices for clients in Pakistan in face of cheaper imports from Kenya, its largest supplier which has seen a 68 per cent increase in production this year.

Pakistan is one of the top three tea importers, with annual consumption of 220 million kg.

In 2015, it had imported 19.45 million kg of tea from India at an average price of $1.47 per kg. A year earlier, it had imported 15.8 million kg but at a higher average price of $1.50 per kg.

Indian tea exporters said Pakistani buyers are not keen to pay a higher price for Indian tea even though it has produced better quality teas this year in comparison with 2015, when a long dry spell had damaged the crop.

According to traders, in the first four months of 2016, Pakistan imported 5.12 million kg of tea, down from the 5.63 million kg it had imported in the year-ago period. Pakistan imports most of its requirement between August and October.

"Kenya has produced 177 million kg of tea this year, which is 72 million kg more than last year. With this huge production, Kenya is in a position to offer much competitive price to Pakistan than India," a senior tea planter told ET.



A merchant exporter said, "Last year, quality of Indian tea had suffered due to erratic weather conditions. That is why Pakistan had offered less price for Indian teas. But this year, quality is much better. Despite that, Pakistan is offering an average price of $1.70 per kg for Indian tea, as availability from Kenya is on the higher side."

However, fall in exports to Pakistan could be offset by demand from another neighbour, Bangladesh, which is showing keen interest. India's tea export to Bangladesh grew by 58.57 per cent in 2015 from a year ago even though the country produces 80-85 million kg annually.

"Bangladesh is ready to buy Indian teas at a price of $1.90 $2.05 per kg. It is a good market for Indian teas and is growing," said another merchant exporter.

A senior official of the Indian Tea Association said that apart from the traditional EU market, Russia, the US, Pakistan, Iran, Egypt and Bangladesh continue to be focus markets for Indian tea exporters. In 2015, Indian exported 232.92 million kg of tea compared with 199.08 million kg in 2014.

 

Source:economictimes.indiatimes.com