Tuesday, July 31, 2007

Malaysian bourse to launch dollar-based crude palm oil futures - report

KUALA LUMPUR (Thomson Financial) - Bursa Malaysia Bhd, the country's stock exchange operator, plans to launch US dollar-denominated crude palm oil futures contracts in September, the Star newspaper reported, citing chief executive officer Yusli Mohamed Yusoff.

'There is huge interest in crude palm oil and we are quite hopeful that it will complement our ringgit contract, especially for traders who wish to trade in US dollars,' Yusli was quoted as saying.

Malaysia is the world's second-largest palm oil producer after Indonesia.

Rising demand from China and India, coupled with the government's move to mandate a five percent palm-oil based biofuel blend for all diesel have sent Malaysia's crude palm oil prices soaring over the past year.

(1 US dollar = 3.46 ringgit)


Read More......

Wheat flour may get Customs relief

The government is planning to do away with import duty on wheat flour from the current 30%. The move is expected to kill two birds with one stone. It will take off some demand pressure on India’s wheat as the festival season approaches. It will also become a gateway for Americans to sell their wheat as a value-added product in the Indian market.

Since wheat flour will not be tested for the same phytosanitary specifications as wheat grain, it will bypass the objections raised by the agriculture ministry against US wheat. The US government has been lobbying extensively to persuade India to relax its phytosanitary norms for wheat.

“Since the largest exporter of wheat (US) may not be able to participate in our tender, an alternative that could be considered would be to reduce the duty on wheat flour to 0% from the present 30%. This would enable the import of wheat flour, particularly to coastal cities,” the food ministry, which is piloting the move, has said in a note to the committee of secretaries, which met recently.

The food ministry is banking on the fact that there may be surplus milling capacity in Sri Lanka and Malaysia from where wheat flour can come to India. In other words, mills there will import US wheat, produce flour and export it to India, thereby bypassing phytosanitary tests for wheat grains.

“This will enable the private sector to import wheat flour economically at internationally competitive rates. This could also reduce pressure on the domestic market for wheat since flour millers require large quantities of wheat and drive up domestic prices, especially during the festive season,” it has added.

Blaming SPS norms squarely for the high price India is now paying for imported grain, the food ministry believes flour imports may be one way to cool the market. “Because of phytosanitary conditions for import of wheat to India, tenders for supply of American wheat have not been received.

Since the US is one of the largest exporters of wheat, its absence has probably contributed to the higher prices received by STC. Wheat prices in the Delhi market have shown a significant increase in the past one month and this could be partly influenced by reports of high international prices,” it has stated.

Reading between the lines, the proposal gives the market a signal the Centre could be expecting wheat flour prices to exceed Rs 18 per kg in the South. At the current US wheat price of $330, flour from Malaysia or Sri Lanka cannot reach India below Rs 17 per kg.

“Therefore, if the food ministry believes there is a good chance of parity, it must be factoring in a local price of over Rs 18 per kg,” said an analyst.

If the duty is slashed and there is price parity between local and imported wheat flour, it will evoke a mixed reaction in the domestic market.

Read More......

Thursday, July 26, 2007

RICE EXPORT RESUME AFTER KAMAL NATH TAKES UP ISSUE WITH RUSSIAN GOVERNMENT

Russia has lifted the temporary ban on rice exports from India and some other countries imposed earlier this year. This has been achieved after vigorous efforts made by Shri Kamal Nath, Union Minister of Commerce & Industry who took up the issue with his counterpart H.E. Mr. G.O. Gref, Minister of Economic Development and Trade of Russia. This was further followed up by the discussions held during the visit ofthe Indian delegation led by Shri G.K. Pillai, Commerce Secretary to Moscow on 9-10 July 2007 for the Joint Study Group meeting. A decision has now been taken by the Federal Service for Veterinary and Phyto-Sanitary Supervision (FSVPS) of Russia to resume issuing Quarantine Certificates for import of rice from India to the Russian Federation.

Temporary restrictions on import of rice into Russia from some countries including India were imposed by the Russian Government on the pretext that the exporters of rice to Russia were violating the Russian Sanitary-Epidemiological requirements, in particular, regarding pesticide residues. Russian team had visited several countries including India to inspect the testing facilities and the prevailing situations to ascertain the quality of exports of rice from various countries. The Russian team visited India in February 2007 and held deliberations with the officials of Department of Commerce, Department of Agriculture and Cooperation and APEDA. They had also visited the laboratory facilities for testing of export consignments, rice mills and National Accreditation Board for Testing and Calibration Laboratories (NABL).

Read More......

Wednesday, July 25, 2007

FACT SHEET ON SPICES EXPORT

1. India produces over 40-lakh mt. of spices and export around 180 spices/spice product to over 150 countries.

2. There are 2545 registered exporters and 430 manufacturer exporter of spices. 100 exporters (4%) contribute over 80% of total spice export.

3. Total export of spices in year 2006-07 was of Rs.3576 crore. Major spices exported from India in 2006-07 include mint products (Rs.1100 crore), chilli (Rs.807 crore) oils & oleoresins (Rs.511 crore) and pepper (Rs.306 crore).

4. New initiatives of Spices Board –

a. Electronic auction facility for cardamom to be launched by Spices Board in August 2007. This will bring transparency in the bidding process.

b. Regional quality control laboratories proposed at Guntur, Mumbai, Chennai and Delhi.

c. Spices park proposed at Chhindwara (MP), Idukki (Kerala), Erode (TN), Guntur (AP), Barabanki (UP), Kota/Jalore (Rajasthan)

5. Total expected investment for building of infrastructure in this sector during the 11th Plan is around Rs.1000 crores.

Read More......

Wednesday, July 4, 2007

Additional duty on imported spirits, wine and beer goes

New Delhi, July 3 The Government on Tuesday removed the additional customs duty, imposed in lieu of State-level excise duty, on spirits/ liquor, wine and beer imports into the country.

Simultaneously, the Government has also hiked the basic customs duty on wines from 100 per cent to 150 per cent (WTO bound rate). Spirits/liquors will continue to attract the basic customs duty of 150

EU, US complaint An official release said that some of Indian trading partners (mainly European Community and the US) have been complaining that the additional duty of customs was not ‘equivalent to an internal tax” within the meaning of GATT 1994, as the additional duty of customs exceeds the Excise Duty Rates on like products in some Indian States.

Taking into consideration all relevant factors, and after consultation with the State Governments, it has been decided to withdraw the additional duty of customs (in lieu of State Excise Duty) on imported spirit/liquor, wines and beer, the release added.

Read More......

Monday, July 2, 2007

Rising rupee slows down export growth

New Delhi, July 2 A sharply appreciating rupee vis-À-vis the US dollar in which most of India’s exports are denominated has taken its toll in the month of May 2007 when exports increased by a modest 6.04 per cent in rupee terms over the corresponding month in 2006.

Even as the export growth in dollar terms during May 2007, the latest monthly figure put out by the Department of Commerce based on provisional figures from the Directorate of Commercial Intelligence & Statistics (DGCI&S), showed a relatively robust growth of 18.07 per cent at $11.8 billion ($10.04 billion), the tepid growth of 6 per cent in rupee terms owed itself to the relentless appreciation of the Indian rupee vis-À-vis the US dollar. Sources said the slowdown in export growth during May 2007 was worrisome.

While officials in the Commerce Ministry contend that the rupee appreciation during the first two months of the current fiscal was a steep 7 per cent, exporting community here said that it had already cautioned the Commerce Minister about the slowdown in export growth during the rest of the current fiscal if fire-fighting measures were not in put place to stem the adverse repercussions of the appreciating rupee on the exporters’ earnings.

The President of the Federation of Indian Export Organisation (FIEO), Mr Ganesh Kumar Gupta, told Business Line that if the authorities do not take action to stem the rising rupee value, the export figure for the month of June and then onwards would be in negative as the appreciating rupee has made foreign buyers to shift to competing countries such as Pakistan, Sri Lanka and Bangladesh. “They do not want to fork out more dollars for Indian exporters and of course, exports have become a buyers’ market and not a sellers’ market,” said Mr Gupta. His estimate is that in the last three months rupee has appreciated against the US dollar by 10 per cent.

While appreciating rupee might be good for the country, he said, it would cause large scale unemployment because imports would be cheaper and imported goods would swamp the market, wiping out the small and medium industries across the country and exports would no longer be a viable proposition. He said that after the Commerce Minister, Mr Kamal Nath, announced a package on June 13, nothing has come to the exporters and the rupee continues to get strengthened against the dollar. He said the revision of drawback rates as announced must be done immediately and export credit at 6 per cent rate should be available for 364 days.

Cumulatively, while exports during the first two months of the current fiscal amounted to $22.4 billion ($18.6 billion) showing a growth of 20.37 per cent, imports during the period amounted to $35.7 billion ($26.8 billion) showing a growth of 33.05 per cent.

Interestingly, oil imports during May 2007 were valued at $4,740.29 million which was close to 3 per cent lower than oil imports valued at $4,886.44 million in the corresponding month of 2006. Despite the appreciating rupee making the import cost relatively cheaper, the decline in import was attributed to the firming up of average crude prices which was quoted at $65.52 per barrel, against $65.74 per barrel in the previous month.

With rupee making import cost slightly cheaper, this is reflected in export-related imports embedded in non-oil imports which showed a sharp 41.58 per cent growth in May 2007 at $13.3 billion against $9.42 billion in May 2006. Non-oil imports during the first two months of the current fiscal at $26.5 billion were higher by 49.42 per cent over $17.7 billion in April-May 2006.

Trade deficit during the first two months of the fiscal 2007-08 has shot up to $13.2 billion, against $8.2 billion during the corresponding months of 2006.

Read More......

Steel cos cutting prices to fight imports

Mumbai, July 2 Steel companies have started slashing prices of flat steel products, including HR and CR coils, to match import prices.Taking the lead, SAIL has announced a cut in prices of flat products by Rs 500-1,000 a tonne with effect from July 1 in line with the prevailing market trend.

In the past 2-3 months, the prices of imported steel have come down by over Rs 2,000 a tonne as a result of the rupee’s appreciation against the dollar.

A SAIL statement said though the demand for GP/GC sheets rises during the monsoon, as they are used in roofing, the prices have been slashed to make them more affordable.

However, the company kept prices of steel products like TMT bars unchanged.

Other steel companies such as Tata Steel, JSW Steel, Essar Steel and Ispat Industries are yet to officially announce a price cut, which is expected to be more or less in the same range.

Sources said that Essar Steel is expected to announce a price cut of Rs 700-750 a tonne of HR coils, which currently cost Rs 28,300 a tonne.

JSW Steel is expected to come out with a Rs 700 cut.

Mr V.S. Seshagiri Rao, CFO, said: “Our board will be meeting tomorrow on the issue.” He added that the board will consider rupee appreciation against dollar while taking a decision on the price cut.

“International prices have fallen in the last 2-3 months due to large-scale exports by China.”

An Ispat Industries spokesman said that the company’s board met on Monday to take a call on the issue.

Stating that the company was expected to announce its decision on Tuesday, he indicated that the price reduction would be Rs 600-700 a tonne.

Industry analysts said that although the cost of imported HR coils has been stable at $620 a tonne during the last four months, the rupee’s appreciation during the period (from 44.28 to 40.70 against the dollar) brought down the landed cost down by an average of over Rs 2,000 a tonne.

This has prompted Indian steel makers to water down their prices to compete with imports.

“We believe that owing to the rupee’s appreciation and slowdown in domestic demand due to the monsoon, domestic producers are being forced to reduce prices by Rs 500-1,000 a tonne, either by way of direct reduction in list prices or through increase in discounts,” said an Emkay Stock Broking report.

Domestic prices in China have been softening over the past one month as HR coil prices declined by $45-412 a tonne.

In Western Europe, HR prices have witnessed their second price decline in the past six months.

According to SteelBenchmarker, a metal bulletin, hot-rolled prices in Western Europe are down by $12 a tonne to $696.

Read More......