Rupee Weakens Against Dollar Over Sell-Off By Fiis

The Indian rupee on Monday weakened against the US dollar after foreign institutional investors (FIIs) continued selling in debt markets. The fall in foreign exchange reserve also dampened the sentiments.

The home currency opened at 66.81 a dollar. At 2pm, the rupee was trading at 66.81 against the US dollar, down 0.15%, from its previous close of 66.72. From 3 to 13 October, FIIs sold $898.44 million in debt.

On Friday, Reserve Bank of India data showed foreign exchange reserves declined by a huge $4.343 billion to $367.646 billion in the week to 7 October, as the country gears up for a massive dollar outflow due to billions of dollars in deposits nearing their maturity. India had raised about $25 billion by way of three-year FCNR (foreign currency non-resident column) deposits in September 2013 to overcome the sharp fall in the rupee.

India’s benchmark Sensex index was trading at 27,578.97 points, down 0.34% from its previous close. So far this year, it has gained 5.6%.

India’s exports grew by 4.62% to $22.9 billion in September on the back of healthy growth in sectors such as engineering and gems and jewellery. Imports contracted by 2.54% to $31.22 billion, leaving a trade deficit of $8.33 billion in the month under review.

The benchmark 10-year government bond yield was trading at 6.754% same as that of Friday’s close of 6.754%. Bond yields and prices move in opposite directions. The rupee is down 1% till date this year, while FIIs have bought $7.57 billion in equity and sold $637.50 million in debt markets.

Asian currencies were trading lower. Malaysian ringgit 0.534%, South Korean won was down 0.490%, Taiwan dollar 0.396%, Philippines peso 0.367%, Indonesian rupiah 0.321%, Thai baht 0.15%, China Renminbi lost 0.168% and China offshore 0.166%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 98.112, up 0.09% from its previous close of 98.019.

On Friday, Federal Reserve chairwoman Janet Yellen said there are “plausible ways” that running the US economy hot could fix damage caused by the Great Recession, laying out the argument for keeping monetary policy easy without taking an interest rate hike off the table this year.

Traders are cautious ahead of the data from China, including third-quarter gross domestic product (GDP), house prices, industrial production numbers, retail sales and fixed asset investment due this week.

 

Sources :.livemint.com

Handicrafts Exports To Grow By 10% To Rs 23,560 Cr In Fy17: Epch

NEW DELHI: With pick up in demand in the new and traditional markets, handicrafts exports will grow by about 10 per cent to Rs 23,560 crore in 2016-17, EPCH today said.

Exports Promotion Council for Handicrafts (EPCH) Executive Director Rakesh Kumar said that demand in regions like the US, Europe, Latin America and Middle East is growing and it will help in recording a healthy growth figures in exports.

For the April-September 2016 period, the exports reported a growth of 18.25 per cent year-on-year to Rs 13,005.35 crore.

"The promotional efforts being undertaken towards enhancing our exports in these markets would certainly result in increase in exports not only in the traditional markets but also in the emerging markets. This year, we are targeting the export figure of Rs Rs 23,560 crore," Kumar told PTI.

To boost the exports, the council has sough enhanced duty benefits for the sector, he said.

Talking about compliance issues in the sector, he said the council is taking lead in this direction by creating awareness through various seminars and other means.

Further the council is participating in 30-35 exhibitions and fairs abroad every year to promote the items in global markets.

"These participations remain both in traditional and not- traditional markets for Indian handicrafts. The participation in exhibition abroad is very much necessary to create awareness, brand image of the sector and to secure business for the sector,"

 

Sources :economictimes.indiatimes.com

Ford, Gm Lead India's Car Export Growth In H1 2016-17

NEW DELHI: Passenger vehicle exports from India grew 15.38 per cent in the first half of the ongoing fiscal with US auto majors Ford and General Motors emerging as surprise packages leading the charge, while their Korean and Japanese peers struggled to maintain momentum.

According to SIAM data, passenger vehicles exports in the April-September period were at 3,67,110 units as against 3,18,188 units in the year-ago period.

In terms of absolute volume, Hyundai Motor India remained the largest exporter with 87,499 units at a growth of 2.01 per cent.

The second largest exporter during the period was Ford India shipping 73,821 units, a growth of 32.25 per cent. Interestingly, the company's exports were much more than what it sold in the domestic market -- 46,422 units.

Maruti Suzuki IndiaBSE -1.43 % saw a decline of 7.87 per cent in its overseas shipments during the first six months of 2016-17 at 60,526 units, occupying the third slot.

The fourth largest exporter Nissan Motor India also witnessed a decline of 7.81 per cent at 49,611 units during the period.

The most significant gainer was General Motors India which clocked a massive 863.74 per cent jump in its passenger vehicle exports at 30,647 units during the period. In comparison, the company sold just 12,059 units in the domestic market, down 28.01 per cent.

According to SIAM, German auto major Volkswagen also exported more passenger vehicles from India than it sold in the country during the first half of the fiscal.

Volkswagen India exported 43,114 units in April- September, up 19.28 per cent. It sold only 23,329 units in the domestic market during the same period, up 0.45 per cent.

"Some of the OEMs are working on a clear, focussed strategy of exporting from India, which has worked out really well for them," Price Waterhouse Partner and auto expert Abdul Majeed told PTI.

He further said these companies are targetting markets in emerging economies such as Latin America, East Europe and Africa, which are similar to India with the products here.

"They have made those investments for exports and they already have big network in those export markets," Majeed said.

Concurring with him, Ford India Executive Director, Marketing, Sales, and Service Anurag Mehrotra said: "The most recent commencement of exports of Ford Figo as KA+ to Europe, from our state-of-the-art Sanand plant, showcases our continued investment and commitment."

 

Sources :economictimes.indiatimes.com

Indian Cotton Exports To Pakistan Slump Amid Tensions, Say Traders

Rising hostilities between India and Pakistan have brought their $822 million-a-year trade in cotton to a juddering halt, as traders who are worried about uncertainty over supplies and driven by patriotism hold off signing new deals.

The nuclear-armed rivals have seen tensions ratchet up in the past few months over the disputed territory of Kashmir, and cotton traders in both countries said they were watching developments along the de facto border with alarm.

Pakistan, the world’s third-largest cotton consumer, usually starts importing from September, but three Indian exporters said the number of inquiries had slowed to a trickle in the last two weeks.

In the clearest sign yet of souring relations affecting commerce, Pakistan-based importers also said they were not buying.

“At the moment there is no cotton trade. It’s at standstill. There is uncertainty that, God forbid, if war breaks out, what will happen?” said Ihsanul Haq, chairman of the Pakistan Cotton Dealers Association.

Pakistan Cotton Commissioner Khalid Abdullah said a “low quantum of trade activity is still taking place.”

He said the Pakistan government had not directed traders to stop buying Indian cotton and expected trade to normalize when tensions eased.

Indian government officials said they had not yet noticed trading had stopped.

But some Indian officials said last week that Prime Minister Narendra Modi’s government was considering whether it should choke trade with Pakistan to put pressure on its neighbour, even though the trade balance is in India’s favour.

India’ Biggest Cotton Buyer

Trade between India and Pakistan, which have fought three wars since their independence from British rule in 1947, is small.

In the 2015/16 fiscal year ending on March 31, official trade between the two was $2.6 billion. Cotton is the largest component of that total.

It is not clear whether other goods and commodities traded between the two, such as jewellery and dry fruits, have been hit by the escalation in hostilities as well, but the disruption to cotton shipments is potentially significant.

In the crop year ended Sept. 30, Pakistan was India’s biggest cotton buyer after its own crop was hit by drought and whitefly pest.

It imported 2.5 million bales from India, and supported Indian cotton prices at a time when China was cutting imports, traders said.

Lower purchases by Pakistan this year could hurt exports from the world’s biggest producer of the fibre and put pressure on Indian prices, but could also help rival cotton suppliers like Brazil, the United States and some African countries.

Chirag Patel, chief executive officer of Indian exporter Jaydeep Cotton Fibers, said the country could export 5 million bales in the 2016/17 crop year, but exports could plunge to 3 million bales without Pakistani imports.

An exporter based in Mumbai estimated that Pakistan will need to import at least 3 million bales in 2016/17, and India will have a surplus of around 8 million bales.

“As soon as the (political) situation improves, cotton trade will definitely resume between the two countries,” said Haq of the Pakistan Cotton Dealers Association.

But for now, traders on both sides of the border said the environment was not conducive to doing business.

“Many cotton exporters are not interested in selling cotton to Pakistan. They are trying to find other markets,” said Pradeep Jain, a ginner based in Jalgaon in the western state of Maharashtra.

Shahzad Ali Khan, chairman of Pakistan Cotton Ginners Association, referred to a move by the Indian Motion Picture Producers’ Association (IMPPA), a small filmmakers’ body, last week, banning their members from hiring Pakistani actors.

“India is banning Pakistani artists, so how can it expect us to buy cotton from India?” Khan said.

“In various forums Pakistani traders are saying they will not buy cotton from India this year. Even if they need to pay extra, they will pay and buy it from other suppliers.”

 

Sources :.hindustantimes.com

Soyabean To Remain Under Pressure

Increase in Indian output and global supplies will keep prices under check

With global soyabean output set to increase this fiscal, the pressure on soyabean prices in international markets is likely to continue. As a result, Indian soyabean prices, which have been sticky over the past year, are also likely to come under pressure.

After two years of drought affecting production and lifting prices higher in the domestic market, output from India is set to rise, albeit at a lower-than-projected rate due to floods in the top soyabean-growing State of Madhya Pradesh. Increase in global supplies will offset an otherwise rising demand for soyabean products, leading to accumulation of stocks, thus keeping soyabean prices under check in 2016-17.
Global production set to rise

Soyabean is one of the major oilseed crops in the world, accounting for about 60 per cent of oilseed production in 2015-16. About 86 per cent of the world’s total production is crushed for oil. The oil recovery is 17-18 per cent while the meal forms 80-82 per cent.

The US, Brazil and Argentina are the top three soyabean producing countries in the world, accounting for 83 per cent of the total world production in 2015-16. According to the US Department of Agriculture (USDA), the global production is expected to go up to 333 million tonnes in 2016-17 from 313 million tonnes in 2015-16.

Global ending stocks in 2016-17 are expected to rise which should keep prices under check.

According to the USDA, production in India is expected to go up from seven million tonnes in 2015-16 to 9.7 million tonnes in 2016-17. This is after it revised its estimate down after August.

The USDA reduced its forecast production from 11.4 million tonnes in August to the current 9.7 million tonnes on account of lower area sown and a lower yield forecast. Also, in Madhya Pradesh, excessive rainfall led to widespread flooding, diminishing crop yields, according to the USDA.

Experts in the domestic market too peg a similar estimate. As reported by the Agriculture Ministry on September 8, 2016, the total soyabean area decreased by 1.60 lakh hectares from 116.30 lakh hectares in 2015-16 to 114.70 in 2016-17. The production estimates here are close to 9.5 million tonnes.
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Nonetheless, soyabean output is estimated to be 35-38 per cent higher than that in the previous year.

This will lead to an increase in soyabean crushing in India, to 7.6 million tonnes in 2016-17 from 5.87 million tonnes in 2015-16.
India trade picture

In India, soyabean is mainly used for crushing and thereby obtaining soyameal. Of the total soyabean produced in the country, 70-80 per cent goes for crushing and the remaining is used directly. While import of soyabean is negligible, a chunk of the country’s soya oil demand is met by imports. According to data provided by the Solvent Extractors’ Association (SEA), import of soya oil has nearly quadrupled in the last five years to 4.2 million tonnes in 2015-16.

However, in the past, there has been a good export market for Indian soyameal, particularly from South-East Asian countries, as this is non-genetically modified (GM) soyameal.

But in the last few years, exports have taken a hit due to higher prices of soyameal in the Indian market, compared to other international markets. According to SEA, as of August 2016, FOB/FAS Indian soyameal is quoted at $480 a tonne against Argentina origin soyameal CIF Rotterdam at $383 per tonne. Soyameal exports during April-August 2016 stood at 10,145 tonnes, 71 per cent down from last year.
Price outlook

The price of soyabean as any other commodity is broadly dependent on the demand and supply situation. As mentioned before, an increase in global output this year should keep prices under pressure. The CBOT soyabean did start to trend up in May and June this year on production-related concerns in Argentina. But prices have been down 6.5 per cent in the past two months as the outlook on global production improved.

In the domestic market, prices normally track the international market. The NCDEX soyabean contract (generic) has fallen about 12 per cent over the past two months and 17 per cent so far this year.

From about a peak level of ?4,200 a quintal in April, domestic soybean prices have plummeted to about ?3,051 a quintal. Domestic soyabean prices are also affected by soyameal prices. The bleak export outlook of soyameal can also keep its prices under pressure.

India imports a chunk of its soya oil requirement and hence, domestic prices track international prices. Soya oil price is also linked to the price movements of palm oil (a substitute to soya oil). The government has only recently lowered the import duty on refined palm oil to 15 per cent from 20 per cent. This will also keep the price of soya oil under pressure.

 

Sources ;thehindubusinessline.com