India May Bail Out Recession-Hit Nigeria Against Oil Supply Business/Business/Economy

India may provide oil-rich but recession-hit Nigeria a $15 billion advance against future supplies of oil.

Nigerian Minister of State for Petroleum Emmanuel Ibe Kachikwu made the request when he met his Indian counterpart, Dharmendra Pradhan, during a recent three-day visit to New Delhi to discuss the significant potential if the two countries diversified their engagements in the hydrocarbon sector.

"The Nigerian Minister requested a potential investment by India of $15 billion, if the terms can be agreed to, in Nigeria, as upfront payment for crude purchases, to be repaid on the basis of firm term crude contracts over some years," a statement by the Indian Ministry of Petroleum and Natural Gas said. The ministry did not clarify whether the request would be accepted.

The two ministers, the statement said, agreed to work on a Memorandum of Understanding to facilitate investments by India in the Nigerian oil and gas sector that is expected to be firmed up this December during PETROTECH-2016.

The Indian High Commission in Abuja, the Nigerian capital, said Nigeria now provides 12 per cent of India's annual crude oil requirement. "India has the top spot at Nigeria crude oil exports with imports of 23 million barrels and 1.5 million barrels of other petroleum products, equivalent to 13 per cent of Nigeria's total export amounting to $9.94 billion for 2015-2016," the High Commission added.

The statement said Kachikwu also suggested more collaboration with India in the refining sector and exploration and production on a government-to-government basis by Indian companies, long-term contracts for supply of crude to Indian companies from Nigeria and also the possibilities of executing LPG infrastructure projects by Indian companies in Nigeria.

 

Sources :.business-standard.com

Rupee Closes Lower At 66.81 Against Dollar; Down 0.2%

 The Indian rupee on Thursday weakened against the US dollar, tracking the losses in its Asian peers.

The rupee closed at 66.81 against the US dollar, down 0.2% from its previous close of 66.68. The home currency opened at 66.69 a dollar. So far this year, it’s down 1%.

Most Asian currencies closed lower as traders are getting more focused on the US Federal Reserve rate hike in December as Hillary Clinton’s lead in the US presidential race remains intact after the last debate before the 8 November election. In the final presidential debate between Republican presidential candidate Donald Trump and Democrat Hillary Clinton, Trump tried to reverse the momentum in an election that polls show is tilting away from him.

South Korean won was down 0.38%, Thai Baht 0.32%, Japanese yen 0.26%, Philippines peso 0.19%, Singapore dollar 0.15%. However, Malaysian ringgit was up 0.08%.

India’s benchmark Sensex index closed at 28,129.84 points, up 0.52% or 145.47 points from its previous close. So far this year, it has gained 7.5%, while foreign institutional investors (FIIs) have bought $7.45 billion.

From 3 to 18 October, FIIs sold $1.17 billion in debt and so far this year they have sold $906.50 million.

The benchmark 10-year government bond yield closed at 6.76% compared to Wednesday’s close of 6.732%. Bond yields and prices move in opposite directions.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 97.93, up 0.01% from its previous close of 97.92.

The European Central Bank is seen leaving policy unchanged at Thursday’s review, investors will be looking for signals regarding the outlook for its quantitative-easing programme

 

Sources :.livemint.com

Arecanut Slide Hits Coffee Growers

 Coffee growers in Karnataka, earlier pinched by a drop in production and price, are now feeling the heat from a crash in price of arecanut, a major intercrop (growing in alternate rows or sections in the same field) for them

The price of arecanut (better known as the source for the betel nut or supari) has dropped over a year from nearly Rs 75,000 a quintal to Rs 25,000-30,000 a qtl. Around two-fifth of the country's crop (India is the world's biggest producer and consumer) comes from Karnataka.

Last week, Baba P S Bedi, former chairman of the Karnataka Planters Association (KPA), said it was a lucrative crop for quite a while till last year. Total demand in the country is estimated at around 1.2 million tonnes; output is around 700,000 tonnes.


India imported 67,824 tonnes worth $159 million in 2015-16, from 110,000 tonnes worth $230 mn in 2014-15. Growers say prices have come down due to slowing in the export market, especially regarding Pakistan. And, imports have risen from Sri Lanka. Traders import from Indonesia, through Sri Lanka, by getting a ‘Certificate of Origin’ from the latter. Imports from Lanka to India attract zero per cent customs duty, under a free trade agreement (FTA) with that country. 'Rule of Origin’ is permitted under the FTA with a provision that the exporting country must do a minimum value addition of 25 per cent.

Related restrictions on sale of tobacco and supari is given as another reason for a drop in demand and, therefore, the price.

Buying of arecanut is predominantly by traders and stockists, who try to do so when prices are low.

Rohan Colaco, earlier a KPA executive committee and a major arecanut grower, says there had been a rise in output over the years. Since the crops of paddy and maize are labour-intensive, farmers shifted to arecanut in the western ghat region. Also, over the years, quite a few sugarcane growers had converted to arecanut. In 2011-12, sowing was on 441,000 hectares; in 2015-16, this had risen to 473,000 ha.

 

Sources :.business-standard.com

Large Scale Imports Of Apis From China Worries Indian Pharma Industry

 Over-dependence of Indian pharmaceutical industry on imported pharma raw materials from China to meet the growing requirements of drug formulations is a cause of concern for the industry as well as policymakers.

India may have emerged as a key supplier of generic and affordable medicine for the world market, its overwhelming dependence on China for crucial raw materials, such as active pharmaceutical ingredients (APIs) and intermediates, to the extent of over 65 per cent of the requirement, has emerged as a main worrying area, according to an Assocham-RNCOS joint paper.

This is all the more disconcerting in the face of louder narrative against reducing trade gap with China which is well over $ 51 billion, added the study.

APIs and intermediates are key raw materials to manufacture pharmaceutical formulations such as tablets, capsules, syrups, etc. Rapid growth in new medical technologies is spurring the demand for generic drugs worldwide with the increased import of raw pharma ingredients from the emerging markets. Against this background, the policy makers have also raised concerns over India’s rising dependence on imports from China for many APIs that go into the making of a number of essential drugs.

Though the government has taken steps like withdrawal of exemption in customs duties, imports worth Rs 13,853 crore in 2015-16 or 65.29 per cent of the total imports of Rs 21,216 crore are not sustainable. “Over-dependence on China for APIs is likely to affect the bulk drug manufacturing sector, and subsequently have an impact on our population in plausible scenarios of drug shortages brought down by interrupted imports from single source country,” said D S Rawat, secretary general, Assocham, adding that over-dependence on such a crucial raw material on a single country is also not advisable from India’s overall strategic interests as well.

One of the main reasons for huge API imports from China is low cost of its manufacture and subsidy in China while India levies negligible import fee. “The import fees should be increased in line with other counterparts,” advocated the Assocham-RNCOS paper.

Presence of multiple regulatory authorities for the industry is also hampering the growth of the sector. The API manufacturers have to approach different authorities for renewal of licences that become a tedious affair. “Therefore, a single committee of various government departments should be formed to regulate the industry through a single window and audit of plants,” said Assocham.

Besides, the centre can focus on development of mega parks for APIs across the country. These parks should be provided with common facilities such as effluent treatment plants, testing, power plants, IPR management and designing. These facilities should be maintained by special purpose vehicles.

Several other countries like China provide incentives and subsidies for promoting the manufacture of essential pharmaceutical raw material. This significantly reduces their cost of production and ability to supply API to the world market at a huge discount to the global prices. This discourages new domestic investment in the sector.

 

Sources :business-standard.com

Centre Mulls Lowering Sugar Import Duty To Cool Down Prices

 To cool down sugar prices during the festival season and also thereafter, the Central government is exploring the option of lowering the 40 per cent import duty on the sweetener in its raw form.

Officials said the department of revenue in the finance ministry has been directed to explore the possibility of lowering the import duty considering all revenue implications.

By bringing down the import duty, the Centre hopes to increase supplies of the commodity.

Sources said the food ministry complete waiver of the import duty, while other department want a token duty to be maintained.

Data sourced from department of consumer affairs shows that wholesale price of sugar in Delhi and Kolkata markets along with some other Centres have moved up by Rs 30-50 per quintal in the last two months.

The Central government in a series of measures in the last six months has imposed a 20 per cent tax on sugar exports, withdrawn the excise duty concession on production of ethanol, imposed stock holding limits on sugar mills in addition to wholesalers and retailers as it felt that some mills along with few Centre feels that sugar mills along with few unscrupulous traders could further push up the prices during the festival season taking advantage of the supply shortage.

India's sugar production in 2016-17 season that started from October is expected to around 23 million tonnes as against 25 million tonnes of 2015-16 due to drought in major growing states of Maharashtra and Karnataka.

However, some industry players feels that there would be sufficient sugar stock to meet the domestic demand of 26 million tonnes in 2016-17 as the country would have an opening stock of 7 million tonnes. The Centre too till sometime back was of the view that their won't be any shortage of sugar in the coming months, but relentless rise in prices seems to have changed its mind.

Meanwhile, news agency PTI reported that union Cabinet Secretary PK Sinha on Wednesday directed the Department of Consumer Affairs to consider all options to check sugar and chana prices in the market.

State governments have been told to impose stock limits and take action against hoarders to ensure availability of all essential commodities during ongoing festival season.

Sinha reviewed the availability as well as the prices of essential commodities at a high-level meeting with secretaries of consumer affairs, agriculture, food, commerce, expenditure and others in the evening.

"It was observed that the recent measures taken by the central government have helped containing prices of most of the pulses, which are showing declining trends, and other essential commodities except chana and sugar," an official statement said.

According to government data, chana dal is currently being sold at an average price of Rs 110 per kg.

The maximum price is Rs 145 per kg. Sugar is available at an average price of Rs 40 per kg, although the maximum rate is Rs 47 per kg.

 

Sources :.business-standard.com