Rupee Trades Near Fresh Low Against Us Dollar

Mumbai: The Indian rupee on Monday was trading near a fresh record low against the US dollar, amid nearly $5 billion outflows from foreign institutional investors (FIIs) in local equity and bond markets since the government announced the demonetisation scheme.

The FIIs are selling local as well as other emerging market assets on rising expectations of a possible US interest rate hike in its next mid-December policy and as speculation mounts that US president-elect Donald Trump’s reflationary policies will mean a quicker pace of monetary tightening by the Federal Reserve. The concern that he will take a more protectionist approach to trade has also weighed on developing-nation assets.

At 2.30pm, the rupee was trading at 68.74 a dollar, down 0.3% from its previous close of 68.47. The home currency opened at 68.43 against the US dollar and touched a low of 68.80 a dollar. So far this year, it has fallen 3.7%.

Barclays expects that the currency volatility could increase and liquidity could become scarce during bouts of market risk aversion and dollar strength, as the market tests the new Reserve Bank of India (RBI) leadership’s tolerance for weakness in the rupee.

“Unless the RBI hints at greater tolerance of larger rupee depreciation, we continue to hold a constructive medium-term view on the INR and see it as one of the most resilient EM currencies in a strong dollar environment. Potential anti-immigration and anti-trade policies in the US would not bode well for developing economies, and the dollar likely would strengthen next year—particularly against EM currencies. Rupee is unlikely to ‘escape the beta’ (to the USD) and likely also would drift higher as the rest of USD/EM FX adjusts, especially if the market sees the RBI as continuing to be less tolerant of rupee appreciation than it is of rupee depreciation,” said Barclays report.

India’s benchmark Sensex index was trading at 26,333.75 points, up 0.05% or 12.82 points from its previous close. So far this year, it has fallen 1%.

Traders are also cautious ahead of the key gross domestic product (GDP) data which will be released on 30 November. According to Bloomberg estimates, GDP will be 7.6% for the September quarter from 7.1% in the June quarter.

Bond yields gained after the RBI on Saturday unexpectedly ordered banks to deposit their extra cash with it, in a bid to absorb excess liquidity generated by the government ban on larger banknotes.

The central bank said banks would need to transfer 100% of their cash under the RBI’s cash reserve ratio from deposits generated between 16 September and 11 November, saying it was a temporary measure that would be reviewed on or before 9 December.

Traders called it a drastic move intended to dent the rally in bond markets, adding that the RBI could have opted for more modest measures such as sucking out some of the liquidity through sales of market stabilisation bonds or telling banks to park funds under reverse repos, Reuters reported.

The benchmark 10-year government bond yield gained 8 basis points, to 6.343%, compared to Friday’s close of 6.231%. Bond yields and prices move in opposite directions.

So far this year, FIIs have bought $4.57 billion in equities and sold $3.02 billion in debt.

Most Asian currencies advanced as the dollar index and US treasury yields dropped, while oil prices declined after a planned meeting on Monday between OPEC and non-OPEC producers was cancelled.

Japanese yen was up 1.23%, South Korean won 0.6%, Taiwan dollar 0.33%, Singapore dollar 0.33%, China offshore 0.3%, China renminbi 0.25%, Indonesian rupiah 0.2% and Thai baht rose 0.2%. However, Malaysian ringgit was down 0.08%.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 100.79, down 0.69% from its previous close of 101.49

 

Sources :.livemint.com

India Imports 17.2 Lakh Tonnes Of Wheat This Year

 Indian flour mills have imported 17.2 lakh tonnes of wheat from Ukraine, Australia and France so far this crop year to meet domestic shortages.

Additional 6-7 lakh tonnes of wheat shipments are expected to arrive in the coming months of the 2015-16 crop year (July-June), taking the country's overall imports to 24 lakh tonnes this year.


Last year too, private flour millers had purchased about 5 lakh tonnes of wheat from Australia for the first time in a decade, due to sluggish supply of domestic high protein wheat and lower international prices.

"So far, 17.2 lakh tonnes of wheat has been imported from Ukraine, Australia and France. We need more and additional 6-7 lakh tonnes are expected till February," Roller Flour Millers' Federation of India Ex-President M K Datta Raj told PTI.

Of the total exports till date, about 10.7 lakh tonnes were purchased from Ukraine, 5 lakh tonnes from Australia and 1.5 lakh tonnes from France.

Wheat imports are being undertaken to meet domestic shortages and moreover the grain is available in the global market at much lower than the local prices, he said.

For instance, imported red wheat was costing Rs 1,880 per quintal for delivery in Bengaluru, while the local wheat was quoting higher at Rs 2,060 per quintal.

Similarly, imported white wheat was costing Rs 2,080 per quintal compared with Rs 2,400 per quintal delivered from Uttar Pradesh.

Stating that more import deals are expected in the coming months, Raj said this is because state-run Food Corporation of India (FCI) has restricted wheat sale to bulk users.

He also demanded that if the government further brings down the import duty on the grain to zero from the current 10 per cent, more wheat could come from abroad.

"Weakening of rupee is increasing the cost of imports. It would be better if the government soon takes a call on this issue," he said.

FCI is selling more wheat in North India to check retail prices of wheat and wheat flour, which have shot up by 23 per cent in the last one year.

For instance, retail price of wheat in Delhi has gone up to Rs 24 per kg from Rs 19 per kg in the year-ago period. Similarly, retail price of wheat flour has increased to Rs 27 per kg from Rs 21 per kg, as per the government data.

Rising wheat imports and spike in retail prices indicate short fall in the domestic output in the 2015-16 crop year, but the Agriculture Ministry has maintained production to be 93.50 million tonnes despite drought in over 10 states.

At present, the country is consuming the wheat grown in 2015-16 crop year. The new crop is being sown at present and will arrive in the market only in April.

 

Sources :.business-standard.com

Handloom & Handicraft Industry Eyes New Markets For Exports

 The Textiles Ministry is looking to concentrate on new markets and opportunities for local handloom and handicraft sector as many global companies are willing to tie-up with Indian weavers and artisans. “There is a huge scope for promoting Indian handloom and handicraft products in the niche markets world over,” said Rashmi Verma, Textiles Secretary, at an Assocham event held in New Delhi on Friday.

While most of the sectors registered a decline in exports of Indian products to global markets, export of handicrafts continued to grow at the rate of 17 per cent. “All stakeholders should make efforts to engage with artisans and weavers in the country and hand-hold them not only for ensuring that they get right price and market for their products and also get recognition which they deserve in the world and domestic markets,” she added.

The Union Textile Ministry has signed memorandum of understanding (MoU) with 20 e-commerce companies to engage with artisans and weavers in different handloom and handicraft clusters across India and help them market their products directly. “This will go a long way in ensuring that they get the right price for their product as they are able to sell their product directly to the consumer,” said Verma.

The government is also taking steps for skilling weavers, for giving them design inputs, quality raw material, tools and upgrading their looms to empower them so that they continue to remain engaged in this craft.

“We are finding that younger generation is slowly getting disinterested in this sector and are moving towards information technology (IT). The Textiles Ministry has taken an initiative for training children of weavers and artisans to become entrepreneurs so that they can emerge as leaders in producers’ groups and market their products through e-commerce and other channels directly. This is also in one way trying to attract children of weavers and artisans back into this trade,” she said.

She further said that there are a number of design workshops especially for the weavers and artisans whereby they are informed about current market trends and demand of the market because they have to be sensitised to the needs of the market and only then they will be able to produce what the consumer wants and not try to sell whatever they have made.

According to Textile Ministry’s analysis, many of the weavers and artisans have become workers and labourers in the hands of traders or exporters. “They get paid wages on a daily basis on whatever work they do in one day, so instead of selling their craft and talent, they are now selling their labour, as a result, this has disinterested the young generation,” she said.

Dependence upon middle men for raw material, working capital and even the design are other factors forcing the weavers and artisans to sell off their talent and craft. “It is very-very important that we all together take steps so that dignity of the weaver and artisan is restored and we empower them to be able to sell their talent and their products and not their labour,” stated Verma.

She added, “Sometimes, it is important to have these traders and exporters because they give them the kind of market which these products deserve but it is also important to ensure that these people continue in the tradition of handloom weaving and handicrafts by empowering them by ensuring that they get working capital, are able to get good designs and also have a marketing nexus of their own.

 

Sources :.business-standard.com

Pakistan Stops Import Of Cotton From India Amid Tension

Pakistan has suspended the import of cotton and other agriculture commodities, including vegetables, from India due to rising tensions between the two countries along the LoC, a media report here said.

Officials of Department of Plant Protection (DPP) said that import of agri items from India through the Wagah border crossing and Karachi port and issuing permits for future imports has been halted, the Dawn reported.

Cotton importers and customs clearing agents claimed that the department had stopped the import of agriculture commodities from India without a warning or written order because of increase in tensions across the LoC.

Imran Shami, chief of DPP which is a subordinate department of the national food security and research ministry, however sought to dispel the impression.

"We have stopped import of tomatoes and other fresh vegetables in order to protect our farmers. We have enough tomato and other vegetables stocks, which we import from India only in case of shortages in the domestic market," he said.

The reason behind the "suspension" of cotton imports from India was, nevertheless, different, he said.

"No. We have not stopped cotton imports from India. It has just been halted over reports that the Indian exporters are not meeting our bio-security conditions. We're looking into these reports and will lift restriction on cotton imports if our apprehensions are proved wrong," Shami said.

He said only those cotton consignments would be allowed to enter Pakistan through surface or sea routes where importers had already secured permits from his department and carried phyto-sanitary certificates.

"Our cotton consignments are not being allowed to enter Pakistan through Wagah and Karachi for reasons known to the ministry but cheaper, subsidised Indian yarn is being brought in without any let or hindrance. At least 11 trucks of Indian yarn entered Pakistan on Thursday when the department stopped cotton consignments from coming to this side of the border," a textile factory owner told Dawn.


He said the suspension of cotton import from India would create a huge problem for the textile exporters as the truncated domestic crop target of 11.25 million bales for this year appeared difficult if not impossible to meet.


"The industry requires 14 million bales. We will still be short by three million bales of cotton even if the crop target is achieved," he said.
Top Comment
Dear Mr. Modi, you keep harping on the sacrifices of the Indian Soldiers at the Indo - Pak Border why have you not till date taken away the MFN status given to Pakistan. Again Pakistanis have snuubed... Read MoreSanjeev Sikka


He said cotton shortages after the ban on Indian imports would make domestic prices shoot up at the expense of exports.


Pakistan had imported 2.7 million bales of cotton (1 bale is 170 kgs) - about 40 per cent of India's total cotton exports in 2015-16 - due to crop failure that wiped off 0.5 per cent of GDP growth. The industry is expecting to import 2 million bales this year.
Stay updated on the go with Times of India News App. Click here to download it for your device.
Officials of Department of Plant Protection (DPP) said that import of agri items from India through the Wagah border crossing and Karachi port and issuing permits for future imports has been halted, the Dawn reported.

Cotton importers and customs clearing agents claimed that the department had stopped the import of agriculture commodities from India without a warning or written order because of increase in tensions across the LoC.

Imran Shami, chief of DPP which is a subordinate department of the national food security and research ministry, however sought to dispel the impression.

"We have stopped import of tomatoes and other fresh vegetables in order to protect our farmers. We have enough tomato and other vegetables stocks, which we import from India only in case of shortages in the domestic market," he said.

The reason behind the "suspension" of cotton imports from India was, nevertheless, different, he said.

"No. We have not stopped cotton imports from India. It has just been halted over reports that the Indian exporters are not meeting our bio-security conditions. We're looking into these reports and will lift restriction on cotton imports if our apprehensions are proved wrong," Shami said.

He said only those cotton consignments would be allowed to enter Pakistan through surface or sea routes where importers had already secured permits from his department and carried phyto-sanitary certificates.

"Our cotton consignments are not being allowed to enter Pakistan through Wagah and Karachi for reasons known to the ministry but cheaper, subsidised Indian yarn is being brought in without any let or hindrance. At least 11 trucks of Indian yarn entered Pakistan on Thursday when the department stopped cotton consignments from coming to this side of the border," a textile factory owner told Dawn.


He said the suspension of cotton import from India would create a huge problem for the textile exporters as the truncated domestic crop target of 11.25 million bales for this year appeared difficult if not impossible to meet.


"The industry requires 14 million bales. We will still be short by three million bales of cotton even if the crop target is achieved," he said.
Top Comment
Dear Mr. Modi, you keep harping on the sacrifices of the Indian Soldiers at the Indo - Pak Border why have you not till date taken away the MFN status given to Pakistan. Again Pakistanis have snuubed... Read MoreSanjeev Sikka


He said cotton shortages after the ban on Indian imports would make domestic prices shoot up at the expense of exports.


Pakistan had imported 2.7 million bales of cotton (1 bale is 170 kgs) - about 40 per cent of India's total cotton exports in 2015-16 - due to crop failure that wiped off 0.5 per cent of GDP growth. The industry is expecting to import 2 million bales this year.
Stay updated on the go with Times of India News App. Click here to download it for your device.

 

Sources :timesofindia.indiatimes.com

India's April-September Tea Exports Drop By 2%

NEW DELHI: India's tea exports declined by 2 per cent to Rs 2,084.06 crore in the first six months of the current fiscal.

In the April-September period of last year, the total value of tea exports was Rs 2,124.97 crore, according to Tea Board's latest data.

In terms of quantity, the exports have dipped to 101.04 million kg from 106.36 million kg in the corresponding period last fiscal.

As per the Tea Board, the exports in value terms remained slightly higher in the six-month period of the 2016-17 fiscal on better unit value realisation.

The export realisation was Rs 206.26 per kg as against Rs 199.79 per kg a year ago.

Tea export from North Indian states -- Assam, West Bengal and others - was marginally lower at 58.10 million kg in the April-September period as against 58.38 million kg in the year-ago period.

 Similarly, the overseas shipment from South Indian states -- Tamil Nadu, Kerala and Karnataka -- was down at 42.94 million kg as against 47.98 million kg in the said period.

Whereas, tea production is estimated to have been 795.89 million kg in the first six months of this year, which is almost same as it was in the year-ago period.

India is the second-largest tea producer in the world after China, with over 70 per cent of the beverage produced, being consumed in the country itself.

In the full 2015-16 fiscal, the country sold 232.92 million kg in the overseas market and the export realisation was about Rs 4,493.10 crore.

 

 

Sources :economictimes.indiatimes.com