Monday, 18 July 2016

Rupee Slips 11 Paise Against Dollar

Rupee was trading lower by 11 paise at 67.18 against the US dollar in early trade at the Interbank Foreign Exchange today on increased demand for the American currency from importers and banks.

Dealers attributed the rupee's fall to increased demand for the US currency, but dollar's weakness against some currencies overseas and a higher opening in domestic equity market restricted the fall.

On Friday, the rupee had dropped 16 paise to 67.07 a dollar on fresh demand for the US currency from banks and importers amid fall in domestic equities.

Meanwhile, the BSE Sensex recovered by 146.93 points or 0.52 per cent to 27,983.43 in early deals.

 

Source:economictimes.indiatimes.com



Gold Import Nearly Halves To $3.90 Billion In April-June

NEW DELHI: Gold imports fell by about 48 per cent to $3.90 billion in the first quarter of the current fiscal, which is expected to keep a lid on the current account deficit.

The sliding prices of the precious metal in both global and domestic markets are seen as a contributory factor for the plunge.

Gold imports stood at $7.51 billion in April-June 2015.

The inbound shipments contracted for a fifth consecutive month in June by 38.5 per cent to $1.20 billion, according to the data by the Commerce Ministry.

The contraction in imports helped narrow trade deficit to $8.11 billion last month as against $10.82 billion in June 2015.

India is one of the largest gold importers in the world and imports mainly take care of demand of jewellery industry.

India's CAD narrowed to 1.3 per cent of GDP in the third quarter of 2015-16 as against 1.5 per cent in the same period of the previous year, mainly on account of a lower trade deficit.

Meanwhile, the government has announced launch of fourth tranche of sovereign gold bond scheme from today in a bid to check the demand for physical gold.

It had netted 3.1 tonnes of idle household and temple gold under the monetisation scheme since its launch in November.

As per the data, silver imports too dipped to $249.39 million in June as against $342.37 million in the same month last year.

Also, shipments of pearls, precious and semi-precious stones showed a decline of 13.52 per cent in June.

 

 

Source:economictimes.indiatimes.com



Coal Imports Likely To Decline To 160 Mt In Fy'17

NEW DELHI: Country's coal imports have declined 5 per cent in the first two months of 2016-17 and the number is expected to reach 160.16 million tonnes in the ongoing fiscal, Parliament was informed today.

"The trend of fall in import of coal has continued in 2016-17 wherein for the period April-May 2016-17, coal imports have reduced by around 5 per cent as compared to the corresponding period of the previous year.

"Import of coal is projected for the year 2016-17 by Niti Aayog is 160.16 million tonnes," Power and Coal Minister Piyush Goyal informed Rajya Sabha.

On account of increased production by Coal IndiaBSE 0.59 % Ltd (CIL), which produces around 80 per cent of coal in the country, the import of fossil fuel has fallen from 217.78 million tonnes in 2014-15 to 199.88 million tonnes in 2015-16.

CIL has undertaken a mix of strategies for narrowing the domestic demand-supply gap that address short to medium-term imperatives and also technological and human resource related issues, the minister said.

Coal India has envisaged to produce one billion tonne of coal in 2019-20 from the level of production of 538.75 million tonnes in 2015-16.

For evacuation of such huge coal to destination, CIL has planned for construction of three major railway infrastructure projects to be executed by Indian Railways in growing coalfields of Jharkhand, Odisha and Chhattisgarh. Positivity of such steps have already manifested themselves in decline in imports in 2015-16 (since 2014-15), Goyal said.

In a separate reply, the minister said that up to June, the supply of coal to the power plants was at 142 million tonnes.

 

Source:economictimes.indiatimes.com



Make In Mozambique: Pulses The Real Reason Behind Pm Narendra Modi's Visit

It has as many people as Punjab, and its people are three times poorer. But Narendra Modi became the first prime minister to visit Mozambique in 34 years because the impoverished South African country has something every Indian wants.


India - the world's leading producer of pulses, with 22 per cent of global output - signed a contract to import 100,000 tonnes of pulses from Mozambique in 2016-17, doubling to two lakh tonnes by 2020-21. That would still be no more than two per cent of 2015-16 imports and 0.5 per cent of what Indian farms grow.

But every tonne counts, as imports pouring from 60 countries indicate, from some as little as 1,000 kg, the amount your neighbourhood grocery store might sell in a week.

An important staple food and source of nutrition, pulses available for every Indian have fallen by three kg over half a century. With two years of failed monsoons, insufficient irrigation and flawed, over-regulated marketing - prices rise 50 per cent between the farmer and consumer - India's pulses output is at a six-year low, sparking shortages and spiraling prices.

    


For the first time, imports of pulses in 2015-16 touched $4 billion, a quarter of demand and more than one per cent of India's import bill.

India imported a record 5.8 million tonnes of pulses in 2015-16, 80 per cent more than two years before.

But why have imports risen over the last two years, when they were fairly constant (between 2.5 to 3 million tonnes ever year) over the last decade ending in 2010?

The answer: The output of pulses for the decade ending 2010 rose, stabilising imports, but two years of drought (2014 and 2015) changed all that.

As Indians eat more pulses and production drops, prices keep rising.

Indians want more pulses, but yield is among world's lowest

Pulses are also known as grain legumes, a set of 12 crops - from lentils to chickpeas - high in nutrition, particularly important to developing countries like India with rising incomes.

But the prices of pulses are rising in concert with growing demand and falling production. Imports fill the gap.

By the end of 2015, the retail price of tur dal (pigeon pea) touched Rs 230 per kg, up 150 per cent from Rs 90/kg; it remains between Rs 160 to Rs 180 per kg today.

A perfect storm of colluding reasons is responsible, IndiaSpend reported in October 2016.

Ten months on, nothing has changed, the most important reason being that India's pulses productivity is among the emerging world's lowest. Even poorer Myanmar produces twice as much per hectare, Egypt more than four times as much. Regardless of yield, production is dropping.

The bottom line is a 250 per cent rise (over five years to 2015 in Maharashtra) in the prices of the dal you eat, benefitting the farmer and importer.

Why Sukesh Kode got double the price set by the government?

In the arid southeastern Maharashtra district of Latur, Sukesh Kode, 35, is unconcerned that tur output on four acres of his 17-acre unirrigated farm has fallen to 38 quintals (100 kg = 1 quintal) this year from 42 quintals in 2015.

After all, he earned twice as much for those 38 quintals, with his return jumping 125 per cent over a year in March 2016, a situation mirrored nationwide.

Kode got Rs 45 per kg of tur over the last three years (2013 to 2015). In March 2016, he sold his tur for Rs 102 per kg in the Latur Agricultural Produce Market.

Ashok Badiya, a wholesale trader of pulses for 50 years in the Vashi Agriculture Produce Market in New Mumbai, said that a record pulses output in 2013 mitigated the effect of a drought in 2014, when most farmers were paid between Rs 32 and Rs 35 per kg, below the government-set minimum support price of Rs 40 per kg.

"In 2016, the tide has turned," said Badiya. Supply dropped.

Thus, Kode got Rs 102 per kg for tur he sold in March 2016, more than double the minimum price set by the government.

From the farmer to you: A 50 per cent rise in price

This year, in April, Badiya said he paid Rs 102 per kg for pulses from farmers in March 2016. From Badiya, the pulses travelled to retailers like Piyush Vora, who owns a 250-sq-ft grocery shop in central Mumbai's Lalbaug neighbourhood.

Vora bought pulses this year at Rs 130 per kg and is selling them at Rs 150 per kg (April 2016). He bought tur dal at Rs 205 per kg, and sold it for Rs 230 per kg at the peak in November 2015.

When prices rose last year, the "immediate reaction" of consumers was to buy less dal, said Vora, who explained that such knee-jerk reactions never last.

"In a couple of weeks, they got used to it," he said. "Neither was there a dip in the sales of dal nor in our profit margins." Pulses are so central to the Indian diet that middle-class consumers will buy them and cut back on other things. The poor have no option but to eat fewer pulses, as an editorial in The Hindu explained.

A good monsoon, in general, keeps prices steady, and a bad monsoon increases imports and prices.

To encourage farmers to grow more pulses and keep prices in check, the government has increased the minimum support price for pulses to more than Rs 50 per kg for the summer crop of 2016-17, eight per cent more than last year.

The Maharashtra government on July 5, 2016 decided to sell a kg of tur dal per month to poor families at a subsidised rate of Rs 120 per kg (against a retail price around Rs 180 per kg).

But these are temporary measures. With irrigation uncertain and farmers reluctant to grow more pulses, Mozambique will continue to remain of interest to India.

 

Source:economictimes.indiatimes.com



Textile Sector To Grow At 6% To $40 Billion In Fy2017

After witnessing a degrowth of 2 per cent in FY2016, textile exports is expected to grow at 6 per cent to $40 billion in FY2017, driven by the expectations of growth in the apparel segment and higher fibre prices, says ICRABSE -1.65 % in its research update on the Indian textile industry.

According to Anil Gupta, VP, Corporate Sector Ratings, ICRA Ltd: "Despite volume growth in most of the segments, degrowth in the value of textile exports during FY2016 was driven by lower fibre prices (cotton as well as polyester). For FY2017, while raw-cotton export is expected to decline, however, other segments, especially apparels, shall see positive volume growth, especially due to improved export competitiveness supported by the recent financial package for the textile industry."

As per ICRA estimates, apart from the apparel segment, volume growth in textile exports is also expected in other segments like textile made-ups and home furnishings. The average prices for fibre are also likely to stay higher in FY2017 as compared to the previous year, which will support the growth in value of textile exports.

"While the outlook on volume growth is positive in all the segments except raw-cotton; however, yarn export volumes may also come under pressure due to the recent spurt in domestic cotton prices. This spurt can also partially offset the benefits of the recent financial package for the textile industry," Mr Gupta adds.

Polyester and cotton prices stood lower by 10 per cent and 4 per cent respectively (in US$ terms) till May 2016, which is reflected in the decline in value of exports. However, with the recent spurt in domestic as well as international cotton prices, the growth in value terms is expected to turn positive in the coming months as the higher input costs will partially be required to be passed on to the buyers.

 

Source:economictimes.indiatimes.com