Top 10 Farm Exports: Cotton No Longer Key In Farm Story

For the first time since 2005-06 when India became a major exporter of cotton following a large-scale adoption of Bt-seeds, the fibre has failed to be on the list of the country’s top ten farm export items.

According to the latest official data, exports of raw cotton — including waste —stood at just $308 million in the first half of this fiscal, less than a half of the level seen a year before. Cotton — which was the top farm export item in FY11 and FY12—has steadily lost ground and is now languishing at number 12 in the list of major commodities covering the farm and allied sector.

With domestic cotton prices mostly remaining above the global levels (by 5-10%) in recent months —thanks to an annual 11% drop in output in the last marketing year through September 2016 and a steady offtake by the domestic textile industry — cotton exports are unlikely to cross $700-800 million in the current fiscal, senior trade and industry executives told FE.

Cotton — which was the top farm export item in FY11 and FY12—has steadily lost ground and is now languishing at number 12 in the list of major commodities covering the farm and allied sector.
With domestic cotton prices mostly remaining above the global levels (by 5-10%) in recent months —thanks to an annual 11% drop in output in the last marketing year through September 2016 and a steady offtake by the domestic textile industry — cotton exports are unlikely to cross $700-800 million in the current fiscal, senior trade and industry executives told FE.

Exports are taking a hit due to demonetisation too, with adverse impact of the cash crunch on transportation and other activities.

With demand from top buyer China still subdued and Pakistan turning more protectionist against Indian cotton supplies, exports are unlikely to stage a sharp rebound this year, the sources said. This is despite the fact that India’s cotton output is expected to rise to 35.1 million bales in 2016-17 marketing year, compared with 33.8 million bales in the previous year. One bale equals 170 kg.

Pakistan had put cotton supplies from India through the Wagah and Karachi port on hold from November 23 on grounds of non-compliance of phyto-sanitary conditions before lifting the curbs last week.

In a recent interview to FE, textiles secretary Rashmi Verma had said the government was stepping up focus on domestic value-addition in cotton, which would help create more jobs locally. So, instead of promoting exports of the raw material, the textile ministry’s endeavour would rather be to facilitate greater outbound shipments of cotton-based finished products, Verma had said.

Until recently, China had been the biggest buyer of the Indian cotton, accounting for as high as 70% of the county’s total outbound shipments of cotton. With China gradually shifting from labour-intensive industries like garments and textiles and also trimming its massive inventory, its need for Indian cotton is unlikely to recover anytime soon. This means Indian cotton exporters will now rely more on Bangladesh, which has been ramping up purchases in recent years to meet growing requirement of its garments industry.

According to a November report of the US-based International Cotton Advisory Committee (ICAC), year-ending stocks in China, where much of the excess supplies are held, decreased by 13% to 11.3 million tonnes in 2015-16, as the government there sold over two million tonnes from its official reserves from May through September 2016. China restricted import quota to the volume required by its commitments to the World Trade Organization in 2015 and 2016, and announced that it will continue to do so in 2017. “In addition, the government is planning to begin sales from its reserves in March 2017 when the majority of the new crop will have been sold,” the ICAC said.

By contrast, Bangladesh is among the only three of the top 10 consuming countries where cotton requirement is going to rise, according to the ICAC. The consumption by the textile mills in Bangladesh is forecast to increase 12% to 1.2 million tonnes in 2016-17.

India’s farm exports, covering 43 major segments, stood almost flat at $15,192 million during the April-September period from a year earlier.

 

Sources :financialexpress.com

Imported Gold Worth $2 Billion Used For Conversion From November 11-20

MUMBAI: The latest estimates of gold imports by a leading industry source in the days following demonetisation shows that certain entities in the gold trade, in possible collusion with some bankers, helped people convert their black money to gold bars and jewellery.

While official import figures of November have not been released, the industry source said 72 tonnes were imported during that month. Of this, he claimed 52 tonnes worth Rs 15,000 crore were over $2 billion or brought in during November 11-20, days after demonetisation on Nov 8. Nine tonnes were imported in the first 10 days and 11 tonnes in the last 10 days of the month.

"That 52 tonnes were imported just after demonetisation from November 10 shows the hand of certain unscrupulous entities in the trade in facilitating conversion," the source said. "The government has its task cut out as it could ascertain which bank imported how much in the 10 relevant days and to whom were these sales made."

However, while admitting that "shady elements" had tarnished the entire jewellery trade's "image" Surendra Mehta, secretary of India Bullion & Jewellers Association (IBJA), claimed of the estimated 95 tonnes import, in Nov, 30% would have been for conversion of black money, unlike the trade source's figure of 70%.


IBJA has include dore or raw gold imports in its estimate unlike the trade source's one. Of his estimated figure 75 tonnes were imported in the first fortnight of the month."The price of gold came down and tariff value was revised downwards after Nov 16, when the remaining 25 tonnes were imported, we estimate.

 

 

Sources :economictimes.indiatimes.com

Car Exports Gain Speed, On Track In Fy17

 Prospects of a double-digit growth in the domestic passenger vehicles market in the current financial year look uncertain after demonetisation but a stronger growth story in the export market seems intact. Passenger vehicles (cars, vans and utility vehicles) exports are on track to hit a new record in FY17, as shipments continue to post strong double-digit growth.
 
In the first eight months of FY17, exports have grown about 16 per cent to 499,037 vehicles, against a growth of 9.84 per cent in domestic sales volume (to two million units) of companies. In the corresponding period of FY16, exports had grown by only 4.3 per cent. Export volumes could cross 700,000 units for the first time in a year on the back of a sharp surge in numbers from companies such as Ford, Volkswagen and General Motors. India exported a record 653,889 vehicles in FY16, growing only about five per cent over the previous year. Latin America, Africa and Europe are top export destinations for India-made cars.
 
A double-digit growth in exports is seen after three years. Hyundai, the largest exporter, also posted a four per cent growth and shipped almost 119,000 vehicles in the first eight months of the financial year. “With India becoming a stage for the launch of more and more global models by automobile multinationals, these models are presenting an opportunity for export to non-manufacturing markets,” said Rakesh Srivastava, senior vice-president (sales and marketing) at Hyundai.

 
Like the domestic market, growth in export volume is being driven by the utility vehicles (UVs). UVs exports have surged 48 per cent to 107,916 units in April-November period. Hyundai exported 33,308 units of its popular sports utility vehicle Creta in April-November period this year against 3,866 units in the corresponding period last year (the vehicle was launched in July 2015).
 
Ford, the second-biggest passenger vehicle exporter after Hyundai, maintained the export volumes of EcoSport at about 57,000 units in first eight months. M&M also reported an increase in exports of Scorpio and XUV500. Against the 48 per cent growth in UVs export, export of cars has grown 9.5 per cent. India exported 389,189 cars in the April-November period. New models like Creta and Baleno helped growth in shipments of UVs and cars, respectively. Maruti Suzuki has exported over 28,000 units of Baleno this year.
 
Among the companies, largest volume addition has come from General Motors. It has shipped 43,015 vehicles in April-November period, registering a 240 per cent growth over last year. India is fast becoming a major export hub for a number of manufacturers and GM India is no exception, Kaher Kazem, president and managing director, GM India said last month. GM India, like Volkswagen, Ford and Nissan, sells more India made vehicles outside than in the country.  
 
Srivastava said the rising volumes in the domestic and export market is improving the economies of scale of companies and making the country a more competitive base for export of quality products.

 

Sources :.business-standard.com

India To Export 220 Mw Electricity To Nepal

India is all set to export an additional 220 MW electricity to Nepal in a bid to lessen the perennial power crisis in the energy-starved Himalayan nation.

Nepal will get 190 MW within three weeks and another 30 MW by another two months.

Nepal currently imports 300-320 MW electricity from India, the Indian embassy said in a tweet.

Both governments are working towards increasing this amount by additional 250 MW in next two months.

The electricity from India will be imported through various cross-border corridors.

Though Nepal has huge potential of generating hydro energy of over 80,000 MW round the year, it could not harness more than 800 MW as against the winter demand of more than 13,00 MW. The poor rate of production is attributed to lack of political consensus, instability and resource crunch.

Nepal is going through power cuts of more than 13 hours a day in winter season, but has been managing the power crisis during rainy seasons as its power stations run in full capacity.

After an upgrade of the Muzaffarpur-Dhalkebar cross border transmission line, Nepal and India will be able to export and import more energy.

The completion of this power corridor will allow Nepal to significantly increase its energy imports from India. Nepal is currently importing 80 MW  from this station.

During a meeting in November in New Delhi, the Indian side had agreed to add 220 to 250 MW electricity to Nepal, a senior Nepal government official said.

As part of that agreement, India’s Power Trading Corporation had agreed to provide 30 MW electricity round the clock from Tanakpur substation located in far west of Nepal from Uttarakhand.

Several cross-border transmission lines are proposed between Nepal and India, and some are already under construction.

 

Sources :hindustantimes.com

Zero Import Duty On Wheat Will Lead To Dumping: Unions

 Farmers’ unions and agriculture experts are anguished over the Centre’s decision to scrap the import duty on wheat as they fear that farmers’ income will be affected and they will have to resort to distress sale during the rabi season.

The All India Kisan Sabha said government agencies had failed to procure wheat at the minimum support price (MSP), and without an adequate number of open purchasing centres, farmers are forced to sell their crop at lower prices.

“The decision of scrapping the import duty ahead of the winter wheat crop is aimed at helping agri-businesses by dumping wheat from foreign countries in India,” AIKS president Amra Ram said.

He said that big players in the wheat flour market had been demanding withdrawal of the duty, and this move was to suit their interests.

The Centre recently announced zero import duty from the prevailing 10 per cent to improve domestic availability and check rising prices of wheat and wheat-based products.

“Wheat traders are expecting imports to cross five million tonnes this year. The cost of imported wheat would be far below the MSP of ongoing rabi (Rs. 16,250 a tonne), resulting in crashing domestic wheat prices as the government has no effective procurement mechanism in many States,” he said.

Detrimental step

Nirbhay Singh, leader of the Kirti Kisan Union in Punjab, said, “With easing norms for wheat imports, the government has taken a detrimental step towards farmers’ interest. We have seen it in every season that though the government promises to buy crop at the MSP, yet farmers sell their produce in distress at a lower price for various reasons,” he said.

Agriculture experts also expressed concern over the Centre’s decision and apprehended that the move could badly hurt farmers’ income.

“The government has been saying that wheat sowing has not been impacted by demonetisation and the area of cultivation has increased. If the area has actually increased, and there are no other indications that wheat production will be down in the ongoing season, then why is the government allowing import of duty-free wheat?” asks Ajay Jakhar, chairman of Bharat Krishak Samaj.

“It will lead to a drop in wheat price by at least Rs. 250 per quintal in the open market,” he added.

Devinder Sharma, noted agricultural and food policy analyst, said: “Scrapping duty on wheat would be detrimental to Indian agriculture. First, we did it with oilseeds then with pulses and now with wheat. Importing wheat will hurt our farmers.”

“Prices of wheat have been going up due to the government’s failure. But the farmers should not be penalised for that,

 

Sources :thehindu.com