Rupee Weakens To A One-Week Low Against Us Dollar

The Indian rupee on Monday weakened to a one-week low against the US dollar, tracking the losses in its Asian peers after comments by US Federal Reserve speakers on last Friday raised the possibility of a September rate hike.

Traders are also cautious ahead of the gross domestic product (GDP) data for the June quarter and fiscal deficit data for July on 31 August. According to Bloomberg analyst estimates, GDP may be at 7.5% from 7.9% in the March quarter.

The home currency closed at 67.18 per dollar—a level last seen on 22 August, down 0.18% from its previous close of 67.06. The rupee opened at 67.14 per dollar and touched a low of 67.21, a level last seen on 22 August.

The 10-year bond yield closed at 7.123%, compared with its Friday’s close of 7.129%. Bond yields and prices move in opposite directions.

India’s benchmark Sensex index rose 0.43% or 120.41 points to closed at 27,902.66. So far this year, it has gained 6.83%.

Most Asian currencies markets slipped after Fed chair Janet Yellen indicated that an interest rate increase remains on the cards for this year.

The case for a rate hike has strengthened in recent months, with a lot of new jobs being created, and economic growth is looking likely to continue at a moderate pace, Yellen said in a speech at the Fed’s annual monetary policy conference in Jackson Hole, Wyoming, on Friday.

While Yellen did not give guidance on what the central bank needs to see before raising rates, she said the Fed already thinks it is close to meeting its goals of maximum employment and stable prices. She described consumer spending as “solid” but noted that business investment was weak and exports hurt by a strong dollar, Reuters reported.

South Korean won was down 1%, Malaysian ringgit 0.7%, Indonesian rupiah 0.42%, Japanese yen 0.34%,Taiwan dollar 0.22%, Philippines peso 0.18%, China renminbi fell 0.17% and Singapore dollar 0.13%. However, Thai Baht was up 0.18% and China offshore was up 0.04%.

The rupee is down 1.5% till date this year, while foreign institutional investors (FIIs) have bought $5.78 billion in equity and sold $1.19 billion in debt markets.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 95.7, up 0.14% from its previous close of 95.566.

 

Sources :.livemint.com

Higher Domestic Prices Dent Cotton Exports From India

 Domestic cotton prices are on the upside since April, due to expectation of weak production. This has affected exports, mainly to Pakistan. In the current cotton year (it runs from October of one year to September of the next), about 37 per cent of exports have been to Pakistan. However, with prices moving up to Rs 50,000 a candy (356 kg), this is being hit, says the trade.

“China is the major buyer for Indian cotton but this year's demand was not so good. Against it, due to crop failure, Pakistan became a major importer. However, if our prices were lower, our overall export might be higher than it has,” said J Thulasidharan, president of the Indian Cotton Federation.


As per reports, Pakistan is looking at other options such as the US to import cotton. Even Indian experts believe that. So far, India has exported about 2.5 million bales to Pakistan only out of the total exports of 6.8 million bales.

"During June and July this year, Indian cotton prices were higher than international prices. While buyers are getting cheaper cotton from others why one should buy at the higher rates. However, all depends on demand. There was a good demand from Pakistan this year but after prices gone up, this has affected the export from India," said Naveen Mathur, associate director of commodities and currencies business at Angel Broking.

Because of high cotton prices in domestic markets, many mills from South India are importing from West Africa. According to industry sources, India has imported about two million bales of cotton during this year so far.

Thulasidharan said: "Higher domestic price also increased the cotton import this year as stock size in India is less. This has forced the domestic mills to import cotton. So far India has imported about two million bales and it may increase further.

 

Sources ;business-standard.com

India's First Textile City Likely To Come Up In Ap

India’s first integrated textiles city is likely to come up in Andhra Pradesh. The central government has already initiated the process of identifying land, technology and expertise for the same.

According to sources, Textiles Minister Smiriti Irani has spoken to Andhra Pradesh Chief Minister N Chandra Babu Naidu for providing land and other facilities.


With Naidu’s Telugu Desam Party being an ally of the ruling National Democratic Alliance at the Centre, the proposal, mooted by the NITI Aayog, is likely to be accepted.

Officials said Irani, along with Naidu and top officials from NITI Aayog, would visit China to get a first hand information on the working and structure of the proposed mega textile city.

The city would be largely catering to the export market and build a brand for Indian textiles.

China is a pioneer in building such mega textiles cities. The China Textile City in Keqiao district is one such example.

Founded in the 1980s, China Textile City is the first national professional textile market spread over a construction area of 3.65 million square metres with 29,000 companies managing 40,000 kinds of products.

The textiles sector is the largest employer in the country, employing 32 million people and is critical to Prime Minister Narendra Modi’s plans to create jobs in the country.

It announced a special package for the sector in June aimed at improving India’s competitiveness, which would lead to greater production. The reforms, in turn, are expected to generate 10 million new jobs in the textiles sector in three years.

The package is estimated to cost Rs 6,000 crore, which includes funds for additional five per cent duty drawback for the garments sub-sector.

The government will also bear the cost of employers’ contribution under the Employees’ Provident Fund scheme for new employees of the garment sector earning less than Rs 15,000 a month for the first three years.

The government is also working on a revamped national textiles policy, which is expected to be placed before the Cabinet soon. The draft policy focuses on achieving $300 billion exports and 35 million new jobs by 2024-25.

India exported $36.25 billion worth of textiles and related goods in 2015-16 — a 2.4 per cent decline from 2014-15.

 

 

Sources :business-standard.com

India Aims For Zero Import By 2020, 37 Mobile Manufacturing Units Set Up In Last 1 Year

India has attracted investment from 37 mobile manufacturing companies in last one year that have generated 40,000 direct jobs and 1.25 lakh indirect employment, IT Minister Ravi Shankar Prasad said today

"We decided to make India a big hub of electronics manufacturing. In the last one year, 37 new mobile manufacturing units have come," Prasad said after inaugurating government-funded 'Electropreneur Park'

He said that 11 crore mobile phones have been made in the country in last one year compared to 6 crore earlier

"We have given jobs to forty-thousand people and 1.25 lakh indirect jobs," Prasad said

Chinese companies like Gionee and Xiaomi are making their handsets at Foxconn plant in Andhra Pradesh. Domestic companies such as Karbonn, Lava, Micromax, Intex, Jivi, iTel, and MTech too have set up their manufacturing plants in the country

As per industry sources, Chinese company LeEco will start mobile manufacturing unit on Tuesday

Prasad said that besides manufacturing electronics product in India, product designing is also important

He said that government has provided Rs 10,000 crore under Electronics Development Fund to support new entrepreneurs in the field of electronics
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The Electropreneur Park (EP), which was innaugurated on Saturday in South Campus of Delhi University, is an incubation centre set up with government funds of around Rs 21 crore to support incubation of up to 50 companies

Also Read: India's share in global smartphone market may double in 3 years: Prasad

Set-up in collaboration with academia and industry represented by Indian Electronics and Semiconductor Association, the Park will focus on creation of intellectual property rights and product development to increase domestic manufacturing of electronics items

"India imports electronic goods of over Rs 3 lakh crore

By 2020 government aims to bring down import to zero. The Electropreneur Park started today is a step in that direction," Minister of State for IT and Law P P Choudhary said

Ministry of Electronics and IT has selected six start-up firms that will develop products at this incubation centre

"6 out of 176 start-ups have been selected which means they have capability of developing good quality products and selection of six more are in pipeline," MEITY Additional Secretary Ajay Kumar said.

 

Sources ;indiatoday.intoday

Refinery Wars: China, India Win; S. Korea, Japan, Singapore Lose

There is little doubt that China’s surging exports of refined fuels have cut profit margins for Asia’s refiners, but the pain is unlikely to be shared equally across all the region’s exporters of oil products.

Given the scarcity of detailed official data on oil product imports and exports among many Asian countries, it’s nigh impossible to build a completely accurate picture of the likely winners and losers.

However, detailed data is provided by China on the export destinations of its product exports, and Australia, the region’s biggest importer of refined fuels, also gives a country-by-country breakdown of its imports.

The overall picture for Asia’s refiners is that profit margins appear to have shifted structurally lower as a result of China’s massive exports of diesel and petrol.

China’s exports of 370,000 barrels per day (bpd) of diesel in July were 181.8% higher than the same month last year, and year-to-date exports are up a staggering 223%.

Its petrol exports are also up sharply, rising 84.3% in the first seven months from a year ago.

The Chinese customs data does give clues as to where the additional fuel exports are heading, with gasoline shipments to Malaysia rising 490% in the first seven months of the year for example.

For diesel, Chinese exports to the Philippines are up an astounding 2,084% to the equivalent of about 45,000 bpd, and those to Australia have jumped 1,049%.

But these figures must be treated with some caution as they reflect only direct exports to those countries, and not cargoes shipped through another country.

Chinese customs figures show a 134.7% rise on diesel exports to Singapore in the first seven months of the year and an 119% increase in shipments of gasoline.

Singapore is the region’s main trading hub and the Chinese exports to the island state are almost certain to be re-exported to other countries.

Australia shows losers

For this reason, looking at the Australian statistics is useful, as it breaks down fuel imports by country of origin.

Australia reports data in megalitres and converting this to barrels per day using the BP conversion factors shows that China exported about 54,000 bpd of refined products in June, the latest month for which statistics are available.

This was almost 50% higher than the average 37,800 bpd Australia imported from China in the year ended 30 June.

As China’s exports to Australia have risen, other countries have seen theirs decline.

South Korea’s total product exports to Australia were about 135,800 bpd in June, down from an average of 167,800 bpd in 2015-16, while Singapore’s dropped to 86,795 bpd from 135,700 bpd and Japan’s from 121,700 bpd to 86,000 bpd.

Looking specifically at diesel, the main product that Australia imports given its reliance on the fuel for powering the country’s mining industry, and a similar pattern emerges.

Australia bought 37,608 bpd of diesel from China in June alone, versus an average 10,511 bpd for the year to 30 June.

Shipments from South Korea to Australia dropped to 46,963 bpd in June from the 2015-16 average of 71,496 bpd, Singapore declined to 52,731 bpd from 80,444 bpd and Japan to 64,707 bpd from 68,000 bpd.

While Australia’s three traditional suppliers of refined products all appear to be losing market share, it’s not just China that is gaining.

Australia bought 47,900 bpd of diesel from India in June, up from the 2015-16 average of 30,000 bpd.

With both China and India gaining increased shares of Australia’s open and competitive refined fuels market, this would seem to indicate that they are more competitive than refineries in South Korea, Japan and Singapore.

Given both India and China have the most modern and presumably cost-efficient refineries in the region, it makes sense that they’re able to be more competitive.

China’s overbuilding of refinery capacity will continue to act as a disruptor in Asia’s fuel markets, making profits harder to come by and forcing refiners to focus on cost-cutting and flexibility in marketing in order to prosper. Reuters.

 

Sources :.livemint.com