Rupee Closes At 1-Month High Against Us Dollar; Bond Yield At Fresh 3-Year Low

The Indian rupee closed at one-month high against the US dollar, while 10-year bond yield fell to a fresh three-year low, on Wednesday.

The global turn in sentiment towards emerging market economies helped the currency. Hopes that the new governor of the Reserve Bank of India may be more inclined to cut rates also helped sentiment.

The rupee closed higher in 11 out of 15 trading sessions while the 10-year bond yield closed lower in 15 out of 21 trading sessions.

The home currency closed at 67.06—a level last seen on 10 June, up 0.20% from its previous close of 67.18. The local currency opened at 67.11 a dollar and touched a high of 67.02—a level last seen on 13 June.

India’s 10-year bond yield closed at 7.284%—a level last seen on 19 June 2013— compared with Tuesday’s close of 7.337%. It opened at 7.337% and touched a low of 7.282%, a level last seen on 19 June 2013.

India’s benchmark Sensex index rose 0.03%, or 7.04 points, to close at 27,814.12. In the last 11 trading sessions, Sensex gained 5.34% and so far this year, it has gained 6.5%.

According to a Bloomberg report, Narendra Modi and Arun Jaitley may meet to take call on next governor in next few days. Former deputy governors Rakesh Mohan, Subir Gokarn, the chairman of the NITI Ayog Arvind Panagariya and current deputy governor of RBI Urjit Patel have been touted as contenders.

Most Asian currencies closed higher after Malaysia cut rates and China’s trade data beat analysts’ estimates. Malaysia overnight policy rate was cut to 3% from 3.25%, while China’s exports grew 1.3% year-on-year in yuan terms in June, beating +0.3% estimates, Bloomberg reported.

Philippines peso was up 0.4%, Malaysian ringgit 0.38%, Indonesian rupiah 0.26%, South Korean won 0.15%, Thai baht 0.14%, Taiwan dollar 0.06%, Singapore dollar and China offshore gained 0.05% each. However, Japanese yen fell 0.1%.

The government will issue Wholesale Price Index (WPI)-based inflation data for June on 14 July. According to Bloomberg analyst estimates, WPI will be at 1.3% in June compared with 0.79% in May.

India’s factory output rose unexpectedly in May and retail inflation quickened for the fourth straight month in June, reducing the chances of a rate cut by RBI in its monetary policy review in August, the last under governor Raghuram Rajan.

Consumer price index (CPI)-based inflation accelerated marginally to 5.77% in June from 5.76% a month ago on higher food prices, while the Index of Industrial Production (IIP) rose 1.2% in May, against Bloomberg’s estimate of a 0.3% contraction, on the back of a pick-up in manufacturing activity.

So far this year, the rupee is down 1.34%, while foreign institutional investors have bought $3.17 billion in equity and sold $1.73 billion in debt markets.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 96.328, down 0.11% from its previous close of 96.441

 

source:www.livemint.com

India Seeks Market Access For Sesame Seeds In Japan

India will seek greater market access in the Japanese market for its farm products such as sesame seeds as well as for its services professionals including nurses, when senior officials of both the countries meet on July 28 in New Delhi.

India’s Commerce Ministry will be pushing a proposal asking Japan to bring its big ‘general trading companies’ such as Itochu, Mitsui and Mitsubishi to India for bulk purchase of sesame seeds (locally known as ‘till’), official sources told The Hindu.
July 28 meeting

The July 28 meeting will be that of the (India-Japan) Joint Committee — a panel set up following the signing of the bilateral Comprehensive Economic Partnership Agreement (CEPA) in 2011. The committee’s functions include reviewing the CEPA and suggesting amendments to the pact to boost bilateral trade and investment.

The focus on sesame seeds is because Japan is the world's second largest importer of the item (after China) with annual imports of around 1.6 lakh tonnes. Sesame seeds are used in Japanese cuisine in salads, soups, snacks, candies, and for flavouring and baking. Sesame oil is used in cooking, and in manufacture of soaps, perfumes and pharmaceuticals, while sesame meal (a by-product of the oil) is used as poultry feed.

However, following the detection of pesticides and insecticides such as DDT and malathion in some sesame seeds consignments from India over two decades ago, Japan has been reluctant to import the commodity from India, according to Sanjiv Sawla, chairman, Indian Oilseeds and Produce Export Promotion Council (IOPEC). However, he said, there is no official ban in Japan on import of sesame seeds from India.

“The issue is yet to be resolved as Japan is insisting that the seeds should be pesticide and insecticide-free. We have been having regular dialogues and have even taken them to the fields where the item is grown. Now we are encouraging our farmers to use pesticides/insecticides permitted as per global norms, besides asking the farmers to shift to organic farming,” Mr. Sawla said. To convince Japan that India can be a reliable sesame seeds supplier, IOPEC has held meetings with several leading Japanese general trading companies regarding bulk purchase of sesame seeds from India, Sawla said, adding that these companies are also in touch with some of the leading Indian sesame seed exporters.

India is the world’s largest sesame seed producer with an annual production of around 7 lakh tonnes. India is also the world's largest exporter of the item. India’s sesame seeds exports in FY'15 was 3.76 lakh tonnes valued at Rs.4717.77 crore but it slipped in FY’16 to 3.28 lakh tonnes worth Rs.3011.52 crore.
Learning Japanese

On the services side, India – with a large resource pool of professional nurses — is keen to expedite the signing of a Mutual Recognition Agreement (MRA) between the Indian Nursing Council and its Japanese counterpart to ensure that Japan accepts Indian qualified nurses and certified care-workers.

As per the CEPA, it was decided that Japan will conclude negotiations with India in this regard by 2013-end, but sources said there has been a delay. Japan is learnt to be reluctant to allow Indian nurses.

 

source :thehindu.com

Government Allows Sez Units To Import Solid Plastic Waste

 Government has allowed companies located in special economic zones (SEZs) to import solid plastic waste.

The Environment Ministry has permitted the import by amending the Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016.

"The import of solid plastic waste at column (2) against Basel Number B3010 in Schedule VI, excluding post consumer wastes, is permitted to units in SEZs notified by the central government," the ministry said in a notification.

SEZ units can import plastic or mixed plastic waste prepared to a specification, it added.

The government had notified 'Hazardous and Other Wastes Rules, 2016' in April for better management, handling and trans-boundary movement of hazardous and other wastes.

As per the rules specified, the government will not permit imports of hazardous and other wastes from any country to India for disposal but will be allowed only for recycling, recovery, reuse and utilisation, including co-processing.

 Import of listed hazardous waste would be allowed to actual users with prior informed consent of the exporting country and that will require the permission of the Environment Ministry.

 

Source:economictimes.indiatimes.com

Indian Car Exports Alone Is Four Times More Than Pakistan's Total Car Production

Data accessed from the Pakistan Automotive Manufacturers Association reveals an embarrassing statistic for the automotive industry in Pakistan.

Latest numbers from Pakistan, when compared with those of India, show that exports of cars produced in India are four times that of total vehicles produced and sold in Pakistan. Such is the disparity between the two economies of South Asia.

India sold nearly 23.56 Lakh passenger cars in its domestic market in 2014-2015 as compared to a meagre 1.52 lakhs by Pakistan in the same year. However, the statistics get more interesting when we compare Indian exports. At 5.74 lakh passenger vehicle units exported by India in 2014-2015, the number is 4 times that of total vehicles produced and sold in Pakistan.

"The data has left us red faced, we are nowhere in the picture. No comparison with India," said a member of the Pakistan Automotive Manufacturers Association (PAMA), who wished to remain unnamed in this report.

Pakistan, which some consider to be the gateway to Central Asia, has no indigenous car manufacturer, whereas Indian car manufacturers have embarked on an aggressive overseas expansion. TATA, Mahindra, Ashok LeylandBSE -2.78 %, Hero Group are some examples of Indian car manufacturers who have made a mark on the international stage. Overseas acquisitions have gathered steam too with TATA's acquisition of Jaguar and Land Rover and Mahindra & Mahindra buying up SSyangYong Motors.

With lax automotive safety and quality standards enforced in Pakistan, a significant number of Pakistanis are turning to Japanese cars which give better value for money and safety standards that outstrip those of their Pakistani counterparts.

   

The member of the Pakistani Automotive Manufacturers Association who is quoted in this article, further went on to say that Pakistan has become a dumping ground for second hand cars from Suzukis to Humvees to Toyotas...Pakistanis will have to wait a long time for a viable indigenous, affordable car.

"How can we say 'Make in Pakistan' when no Pakistani has 'Made in Pakistan' before," said the Pakistani Automotive Manufacturers Association member when asked if they will replicate the success of the 'Make In India' campaign.

 

Source:economictimes.indiatimes.com

Indian Hybrid Seeds Makers See A Fifth Of Cotton Seed Returns

: Delayed and inadequate monsoon across several cotton growing Indian states has dented sowing and hit hybrid seeds sales hard and producers have seen nearly a fifth of seed returns from their distributors, double that of last year.

Normal returns from seed dealers hover at around 10% a year, adding to the woes of Indian hybrid seed firms that are currently in a prolonged wrangle with the global seed giant MonsantoBSE -1.93 % on royalties. Hybrid seed manufacturers could see 300-400 basis points fall in profitability this time, say analysts.

India, which did not see much fall in cotton cultivation over the last three years despite consecutive draughts, could see over acreage fall by a sixth this year owing to delayed monsoon, coupled with fall in cotton prices, analysts said.

Seed manufacturers say delayed arrival of rains in key cotton producing regions has forced farmers to shift to other crops like pulses and corn, resulting in higher return of unsold cotton seeds.

"The industry is expecting the sales returns to be on the higher side this year, approximately around 20% as against 10% in 2015, largely on account of delayed arrival of monsoon in key regions and fear in the mind of farmers who suffered excessively from pest attacks," said MG Shembeker, vice-president of the National Seed Association of India and Managing Director of Nagpur-based Ankur Seeds.

Hybrid seeds, channelled through the distributors, are returned to the manufacturers who stock it for the next season. Seed producers claim that the BT cotton seeds have a higher shelf life and can be used even after a year.

"Stocking of seeds also entails additional expenditure for us. However, it would be too early to conclude that it'll impact our businesses and we should wait for the sowing season to get over," said Niranjan Kumar of Seedsmen Association and chief executive officer of Garc Seeds.

Sabyasachi Majumdar, Senior Vice-President at rating agency ICRABSE -0.18 %, says that "while the cotton acreage was largely intact in the last three years at about 12-12.5 million hectares despite consecutive draughts, it is likely to fall by about 10-15% this year by the end of sowing season on account of delayed monsoon and fall in cotton prices, resulting in higher sales returns."

The y-o-y fall in cotton acreage was about 50% as of June 2016 as per the figures published by the ministry of agriculture. In Punjab and Haryana, cotton acreage fell by 27% to 7.56 lakh hectares as against 10.3 lakh hectares last season due to the fear of whitefly pest attack. However, ICRA's Majumdar said some lost ground could be covered in the remaining sowing period.

Indian hybrid seed firms are already burdened with unsold inventories over the past two years and writing off the stock would impact their profitability, say analysts. "As against 18-20% EBIDTA (earnings before interest, depreciation, taxation and amortisation) till last year, the earnings are likely to fall by 3-4% this fiscal," said Majumdar.

The Indian seeds industry, which is currently valued at $3.2 billion (approximately Rs 19,200 crore), has grown at a compounded annual growth rate of 8.4% in volume terms over FY09 to FY15 to reach 3.5 million tonnes (consumption), said a 2015 report by ICRA India.

At present, the Indian seed industry is the sixth largest globally in value terms, accounting for about 4.5% of global industry preceded by US (27%), China (22%), France (6%), Brazil (6%) and Canada (4.8%).
 

 

Source:economictimes.indiatimes.com