Guar exports from India seen surging as price slump spurs demand

New Delhi : A record plunge in the prices of guar gum, a thickening agent used for oil and gas extraction, may boost exports from India as demand revives among US drilling companies and European food processors.

Shipments may surge as much as 50% to 500,000 metric tons in the year that began on 1 April from 333,000 tons a year earlier, said Rajesh Kedia, director at Jai Bharat Gum & Chemicals Ltd., India’s third-largest exporter.

Shipments increased about 30% to about 210,000 tons in the five months through August, he said.Prices slumped after India, the world’s largest producer, banned futures trading in March 2012 to curb speculation and record rates cut demand from users. Rising supplies may further pressure prices, lowering costs for users Halliburton Co. and Baker Hughes Inc. Guar prices may continue to fall, Mark McCollum, Halliburton’s chief financial officer said 19 September.

The importers will definitely buy more as prices are attractive, Chowda Reddy, a senior manager at Inditrade Derivatives and Commodities Ltd., said in a phone interview from Hyderabad. Demand will increase.Guar gum futures slumped more than 50% since 15 May, when the Indian exchanges restarted trading after a 14-month ban.
The regulator suspended trading in March 2012 after prices rallied more than nine fold in one year to Rs.95,920 ($1,527) per 100 kilograms (220 pounds) on the National Commodity & Derivatives Exchange Ltd. in Mumbai.

Production is seen exceeding demand for a second year, Kedia said in a phone interview from Bhiwani in Rajasthan. Processors need 1.8 million tons of guar seeds to meet export demand of 500,000 tons of guar gum, he said. Seed production in Rajasthan, Gujarat and Haryana states, which together account for more than 99% of India’s harvest, is estimated to drop to 12% to 2.15 million tons in the year started July 1 from a year earlier, government data showed.

The erratic rains and long dry spell in western parts of Rajasthan were responsible for the lower production, said J.S. Sandhu, a joint director in the state’s agriculture department. Inventories of about 800,000 tons of guar seeds will make up more any shortfall in output, Kedia said. India accounts for more than 70% of the global output of guar, which means cow food in Hindi, according to the Multi Commodity Exchange of India Ltd. The seed is also grown in Pakistan and the US
Fracking Guar gum is used in the pressure-pumping technique known as fracking, which blasts water mixed with sand and chemicals underground to free trapped hydrocarbons from shale formations.

It is made into a thickening gel used to carry sand down a well and into the cracks created from fracturing. It is also used as an ingredient in food emulsifiers, additives and thickeners. Guar gum for delivery in December fell 0.6% to 14,620 rupees per 100 kilograms in Mumbai on Thursday. Some of the drilling companies, which began using alternative products to guar gum after the price surge last year, may return to the commodity as availability is assured at lower prices, Kedia said.
If prices continue to fall, there may be a negative impact on guar crop next year, Kedia said. Farmers are disappointed that guar prices have declined below their expectation.

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India's rice exports seen at record 11 mn tonnes: USDA

India's rice exports are estimated at a record 11 million tonnes in 2012-13 marketing year ended September this year on bumper production and strong overseas demand, according to the US Department of Agriculture (USDA).

Rice exports of India, the world's second largest rice producer, stood at 10.38 million tonnes in 2011-12 marketing year (MY) that runs from October to September. "MY 2012/13 export estimate is raised to a record 11 million tonnes based on preliminary official statistics for October 2012 to August 2013, and shipping data compiled by a private source for September 2013," USDA said in a report.

USDA has also revised upwards the rice export estimates for MY 2013-14 to 10 million tonnes from earlier projection of 9.3 million tonnes. However, exports are still expected to be lower than the record 11 million tonnes in previous year.

"Based on the relatively strong export demand for Indian rice, both basmati and non-basmati, and sufficient domestic supplies, the MY 2013/14 rice export estimate is raised to 10 million tonnes," the report said. "While exports of basmati rice are likely to grow further, total exports are likely to be lower than last year's record sales due to relatively tight domestic supplies of non-Basmati rice and food price inflation concerns in an election year," it added.

Quoting market sources, the Department said exports of non-basmati rice have slowed down from in October 2013 due to the strengthening of the Indian rupee compared to the US dollar (current 61.5 from 65 in August/September).

India had lifted the four-year ban on non-basmati exports in September 2011. It had emerged as the world's largest rice exporter in 2012 ahead of its Asian counterpart Thailand. On production, USDA has projected an output of 105 million tonnes in 2013-14 as against 104.4 million tonnes in the previous year.

The department "continues to estimate MY 2013/14 rice production at 105 million tons from 43.5 million hectare." The harvest of kharif rice is in full swing in northern states and initial harvest reports suggest good yields.

"Crop damage was reported due to Cyclone Phailin in coastal Odisha and Andhra Pradesh, and ongoing floods due to heavy rains in some parts of Odisha, West Bengal and Andhra Pradesh. With rice at the grain filling stage, crop damage is likely to be heavy in the flood-affected areas," the report said.

The department said it continues to estimate MY 2013/14 production at 105 million tonnes till an assessment of crop loss is made. "Market sources report that the crop loss due to cyclone and floods in the eastern coast could be in the range of 1-2 percent of forecast production," the report said.

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India's higher taxes on imports of refined palm oil likely to hit incomes of M'sian refiners

PETALING JAYA: India's move to raise taxes on its imports of refined palm oil products is likely to put a dent in the earnings of Malaysian and Indonesian refiners of the commodity, analysts said.

The decision, however, is neutral for crude palm oil (CPO) producers as India's CPO imports remain duty-free.

India, the world's biggest importer of palm oil, effectively doubled import taxes last Thursday when it ended a six-year freeze on the base import price of processed palm olein, increasing the cost of imports from Malaysia and Indonesia.

The country currently imports close to half its edible oil needs, and palm oil takes pole position with a 43% share of the edible oil market.


Employees fill plastic bottles with edible oil at an oil refinery plant of Adani Wilmar Ltd, a leading edible oil maker, in Mundra, 375 km from the western Indian city of Ahmedabad. The new tax policy by India is aimed at placating disgruntled refiners in India, who were doubly hit by both the low tariff and cheaper processed palm oil products from Indonesia. — Reuters
The new tax policy, which lifts the base price of refined palm oil imports to market prices from US$484 (RM1,535) per tonne, is aimed at placating disgruntled refiners in India, who were doubly hit by both the low tariff and cheaper processed palm oil products from Indonesia.

Since Indonesia slashed its export taxes on refined palm oil last October, India's imports have doubled to 1.2 million tonnes for the first eight months of this year over 2011.

CPO futures closed lower yesterday at RM2,990.

Indonesia and Malaysia, the world's top two producers of palm oil, account for 90% of global output of some 50 million tonnes.

Indonesia supplies 74% of India's palm oil requirements while Malaysia makes up the balance 26%.

Malaysia exported 1.66 million tonnes of palm oil products, or 9% of its total exports, to India last year. In the first half of the year, Malaysia shipped 1.07 million tonnes there, which was 82% more than in the same period in 2011.

CIMB Research said in a client note that the higher tax was estimated to widen the margin advantage of palm oil refiners in India to 7.73% from 3.5%.

“This will allow them to compete better with the Indonesian refiners, which we estimate enjoy a profit margin of 5% to 10% due to the favourable export tax for refined palm products in Indonesia,” it said.

The research unit also pointed out that the levies could make CPO imports more competitive versus processed palm oil, resulting in higher imports of the former to India. “Players that will benefit include all the upstream producers as this will boost demand for CPO over refined palm products from India.

“Refiners like Mewah and Wilmar's refineries in Malaysia and Indonesia could face stiffer competition from India's refiners and this could crimp their refining margins.”

Maybank IB Research reckons the situation could pressure Malaysian policymakers to revisit the current export tax structure as palm oil inventory is expected to pile up in the upcoming seasonally high production months.

“The change further dilutes the competitiveness of Malaysian refined palm oil while Indonesia's refiners' margins could be compressed (for sale to India).

“Malaysia imposes a high export duty on CPO of 23% and consequently, the bulk of its CPO production flows downstream to its refineries. However, there is an over-capacity of refineries in Malaysia, and margins are already negative for some,” it said in a client note.

The brokerage sees two options for policymakers - they could either increase the quota for duty-free CPO exports as an interim measure on top of the approximately three million tonnes awarded earlier this year, or reduce Malaysia's high export duty tax on CPO to a maximum tax rate of 10% from 23% now to mirror Indonesia's tax differential between refined and crude palm oil.

Maybank IB Research is cognisant, however, that a larger quota of duty-free CPO exports may irk refiners, while revamping Malaysia's export tax structure now could prove unpopular coming just ahead of the national polls. “After all, 39% of Malaysia's oil palm planted areas are owned by smallholders and government agencies, while the bulk of Malaysia's refining capacity are owned by the large listed entities.”

It added that as policy makers continued to deliberate, market forces are “taking their own course”, with millers in Sabah and Sarawak sharing the burden of refiners by giving them discounts in the first half of 2012.

“And effective July, we understand Wilmar (Malaysia's largest refiner with a capacity of some five million tonnes) has discontinued all forward purchases agreements in Malaysia, opting for spot purchases.

“We believe this will give Wilmar stronger bargaining position to demand for even higher discounts especially when CPO tanks (of millers) “overflow” in the coming months.

“Should this happen, purer Malaysian upstream players will suffer' from lower revenue as a result of heavy discounting (vis-vis CPO spot prices) to clear their CPO stocks.”

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CTC tea export to Kenya may exceed last year’s

The country’s export of CTC tea to Kenya, itself a major producer and exporter of CTC tea, may exceed last year’s level if the present trend is any indication.

In 2011, Kenya imported from India a little more than three millon kg (mkg) valued at Rs 20.72 crore. In first six months of the current year (January-June 2012), the Kenyan import was 1.32 mkg valued at Rs 11.38 crore as compared with 1.05 mkg valued at Rs 6. 74 crore in the same period of the last year.

This is not surprising. This year Kenya has been hit by crop loss due to unfavourable weather and the shortfall in production in the first half (January to June) is estimated to be lower by 22 mkg at 127.8 mkg (149.20 mkg). The import from India it is felt might be re-exported to help Kenyan exporters keep their overseas commitments. In the past, Kenya imported from India larger quantities – more than five mkg valued at Rs 32.76 crore in 2010, for example.

Over the years, Kenyan production has been a showing downward trend – from 398 mkg in 2010 to 377 mkg in 2011.The trend so far suggests that the drop this year might be sharper. However, exports exceed domestic production – 441 mkg in 2010 and 421 mkg in 2011. The commitments to overseas buyers were kept presumably with larger imports.

India’s tea export in the first half is estimated at 43.84 mkg as compared with 45.76 mkg in the same period of previous year despite bullish global market largely due to the demand-supply gap with major tea producing countries reporting shortfall in production. The Indian tea exporters would attribute their inability to cash in on booming export market to the drop in production. However, the drop so far has been estimated at 27 mkg, roughly 2.7 per cent of the total production of about 1,000 mkg.

The real reason is the inward looking approach of our tea producers due to the lucrative domestic market. The export market has many challenges — competition, quality and the stiff standards imposed by many European countries about the use of pesticides in tea.

By comparison, the domestic market is free for all, virtually no challenge.

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India's higher taxes on imports of refined palm oil likely to hit incomes of M'sian refiners

PETALING JAYA: India's move to raise taxes on its imports of refined palm oil products is likely to put a dent in the earnings of Malaysian and Indonesian refiners of the commodity, analysts said.

The decision, however, is neutral for crude palm oil (CPO) producers as India's CPO imports remain duty-free.

India, the world's biggest importer of palm oil, effectively doubled import taxes last Thursday when it ended a six-year freeze on the base import price of processed palm olein, increasing the cost of imports from Malaysia and Indonesia.

The country currently imports close to half its edible oil needs, and palm oil takes pole position with a 43% share of the edible oil market.

Employees fill plastic bottles with edible oil at an oil refinery plant of Adani Wilmar Ltd, a leading edible oil maker, in Mundra, 375 km from the western Indian city of Ahmedabad. The new tax policy by India is aimed at placating disgruntled refiners in India, who were doubly hit by both the low tariff and cheaper processed palm oil products from Indonesia. — Reuters

The new tax policy, which lifts the base price of refined palm oil imports to market prices from US$484 (RM1,535) per tonne, is aimed at placating disgruntled refiners in India, who were doubly hit by both the low tariff and cheaper processed palm oil products from Indonesia.

Since Indonesia slashed its export taxes on refined palm oil last October, India's imports have doubled to 1.2 million tonnes for the first eight months of this year over 2011.

CPO futures closed lower yesterday at RM2,990.

Indonesia and Malaysia, the world's top two producers of palm oil, account for 90% of global output of some 50 million tonnes.

Indonesia supplies 74% of India's palm oil requirements while Malaysia makes up the balance 26%.

Malaysia exported 1.66 million tonnes of palm oil products, or 9% of its total exports, to India last year. In the first half of the year, Malaysia shipped 1.07 million tonnes there, which was 82% more than in the same period in 2011.

CIMB Research said in a client note that the higher tax was estimated to widen the margin advantage of palm oil refiners in India to 7.73% from 3.5%.

“This will allow them to compete better with the Indonesian refiners, which we estimate enjoy a profit margin of 5% to 10% due to the favourable export tax for refined palm products in Indonesia,” it said.

The research unit also pointed out that the levies could make CPO imports more competitive versus processed palm oil, resulting in higher imports of the former to India. “Players that will benefit include all the upstream producers as this will boost demand for CPO over refined palm products from India.

“Refiners like Mewah and Wilmar's refineries in Malaysia and Indonesia could face stiffer competition from India's refiners and this could crimp their refining margins.”

Maybank IB Research reckons the situation could pressure Malaysian policymakers to revisit the current export tax structure as palm oil inventory is expected to pile up in the upcoming seasonally high production months.

“The change further dilutes the competitiveness of Malaysian refined palm oil while Indonesia's refiners' margins could be compressed (for sale to India).

“Malaysia imposes a high export duty on CPO of 23% and consequently, the bulk of its CPO production flows downstream to its refineries. However, there is an over-capacity of refineries in Malaysia, and margins are already negative for some,” it said in a client note.

The brokerage sees two options for policymakers - they could either increase the quota for duty-free CPO exports as an interim measure on top of the approximately three million tonnes awarded earlier this year, or reduce Malaysia's high export duty tax on CPO to a maximum tax rate of 10% from 23% now to mirror Indonesia's tax differential between refined and crude palm oil.

Maybank IB Research is cognisant, however, that a larger quota of duty-free CPO exports may irk refiners, while revamping Malaysia's export tax structure now could prove unpopular coming just ahead of the national polls. “After all, 39% of Malaysia's oil palm planted areas are owned by smallholders and government agencies, while the bulk of Malaysia's refining capacity are owned by the large listed entities.”

It added that as policy makers continued to deliberate, market forces are “taking their own course”, with millers in Sabah and Sarawak sharing the burden of refiners by giving them discounts in the first half of 2012.

“And effective July, we understand Wilmar (Malaysia's largest refiner with a capacity of some five million tonnes) has discontinued all forward purchases agreements in Malaysia, opting for spot purchases.

“We believe this will give Wilmar stronger bargaining position to demand for even higher discounts especially when CPO tanks (of millers) “overflow” in the coming months.

“Should this happen, purer Malaysian upstream players will suffer' from lower revenue as a result of heavy discounting (vis-vis CPO spot prices) to clear their CPO stocks.”

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Shah panel rules out ban on ore export

PANJIM: Justice M B Shah commission has pointed out that staff available with the State and Central Government agencies is not enough to control the unabated illegal mining happening in the country, including Goa.

The second interim report submitted by the Commission, copy of which is available with Herald, has also ruled out ban on the export of iron ore as it will adversely affect the economy of the States. “It is pointed out that at present staff is inadequate to control illegal mining”, the report reads.

“Unless adequate staff is appointed by the State Governments in the Mines and Mineral Department and also adequate supervisory staff is appointed with Indian Bureau of Mines (IBM), it would be absolutely difficult to control illegal mining”, it adds.

The Shah Commission has said that if the controlling machinery is weak and is understaffed, the illegal mining activities would continue unabated. The interim report has also said that considering the specific problems of Goa/Redi region, exports from there will have to be continued.

“The bilateral agreements with countries like Japan and Korea would necessitate that such exports at the existing levels may be continued”, it adds. Exports, thus, cannot be wished away. Exports of iron ore have been undertaken largely by merchant miners in the private sector. Any stoppage to exports could lead to closure of significant mining capacity as the volumes cannot be diverted to domestic use easily, says the report.

The Commission has observed that illegal mining, which runs into thousands of crores, has encouraged huge corruption at all different levels in public life, mafia in society and money power. “It is not only national loot, but also has deleterious effects on the national economy and society. This has to be stopped immediately and effectively”, it adds.

The main cause and incentive for this illegal mining of iron ore and manganese ore is the huge profit in the export market (mainly China), the report says. The prices of these have gone up by about 20 times without any corresponding benefit and increase to the public exchequer, it adds.

 Source:-oheraldo.in

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India may hike refined palm oil import duties

NEW DELHI/KUALA LUMPUR: India is considering an industry request to raise import duties on processed palm oil, government and industry sources said, after Indonesia lowered its export taxes on the product -- a move seen as dealing "a death blow" to Indian refineries.

India, the No 1 buyer of vegetable oils, has already begun importing more of refined, bleached and deodorised (RBD) palm olein from Indonesia ahead of Diwali, potentially leaving refining capacity idle.

With Indonesia, the biggest producer, now more than halving export taxes of refined palm oils in mid-September, Indian industry officials are pushing New Delhi to raise the base price, or tariff value, for refined palm oils.

"The domestic refining industry has been demanding $1,100-$1,200 per tonne tariff value on RBD palmolein," said a government source on Thursday who did not want to be named due to sensitivity of the issue.

The finance ministry did not comment on the issue as it usually refrains from making public statements to avoid speculation.

Importers are currently taxed 7.7 per cent duties based on the tariff value set at $484 a tonne, irrespective of purchase price -- a low price to pay and bring in processed edible oil cargoes at time when food inflation is still high.

Indonesia made minor cuts to export taxes of crude palm oil that forms the bulk of India's imports. But even with crude palm oil's import tax-free status in India, traders are shifting to refined products.

From last week, Indian traders have snapped up 50,000 tonnes of RBD palm olein for delivery in October to coincide with higher food demand during the Diwali festival.

Benchmark palm oil on the Bursa Malaysia Derivatives dropped 1.8 per cent on Thursday on concerns over the bleak global economic outlook although traders said festival demand could limit losses.

Indian domestic prices were also down. At 0727 GMT the most-active soyoil for October delivery on India's National Commodity and Derivatives Exchange was 0.6 per cent lower at 649 rupees ($13.429).

"The contract may fall to 620 rupees if cheaper imports will remain there for next few more weeks," said Vimla Reddy, an analyst with Karvy Comtrade.

India buys about 6 million tonnes of crude palm oil every year from Indonesia for its refiners to process into cooking oil and other food products.

Refining capacity in the country stands at 15 million tonnes and could turn idle if more refined palm oil is shipped in, traders estimate.

Food Minister KV Thomas this week expressed concern about Indonesia's move, which the head of Indian's leading vegetable oils industry association has said could be "a death blow" to the refining industry.

India's food ministry has since passed on the industry's request for higher tariff values to the finance ministry, the sources said.

Finance minister, Pranab Mukherjee, will take a final decision bearing in mind high food-driven inflation has forced the central bank to hike rates 12 times in the last 18 months.

"If the food ministry recommends any action on the demands of the domestic industry, we will inevitably examine it," a finance ministry official said.

The edible oils weight in India's wholesale price is 3.04 per cent, and the wholesale edible prices have moved up by 3.65 per cent since March 2011 until August.

The wholesale prices of edible oils were up 3.5 per cent in August from a year ago period. The WPI rose 9.78 per cent in August and is a major concern for policy makers.

"There is still plenty of room to move," said a palm oil analyst in Singapore.

"Raising the tariff value for refined palm oils will make it expensive but the inflation aspect can be mostly avoided as India will shift back to crude palm oil and still save its refiners," she added.

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Govt reimposes 60% duty on sugar imports

With sugar production set to exceed domestic demand, the government has decided the zero duty regime on sugar imports to lapse, which in effect will restore 60% duty on the sweetener. Import duty on sugar was abolished in early 2009 to boost domestic supply because of a short fall in output in 2008-09 sugar year (October –September). Before that the duty on sugar import was 60%. The duty free regime was valid till December 31.

“There is no need for a fresh notification with the validity of duty free import notification on sugar lapsing. It will automatically revert to 60% duty. If required we can seek a reduction in duty later,”a senior government official said.

India had imported about 6mt of sugar since February 2009 to meet domestic demand. Sugar production in India, the world’s second largest producer, had declined to 14.7mt in 2008-09against the annual domestic demand of 23mt . In 2009-10, the production improved to 19mt, but it was still short of demand. However, in the current sugar year, production is expected to rise to 24.5mt and the country has now begun exporting the sweetener. Prices have also softened to Rs 30-32 per kg in retail from nearly Rs 50 a kg in mid-January 2010.

Meanwhile, the government would notify export of sugar under the open general licence (OGL) this week. The government might give mills three months to export sugar under the OGL. Agriculture minister Sharad Pawar had last month said the government had decided to allow mills to export about 5 lakh tones of sugar under the OGL. Mills may be allowed to export 2.5% of their average annual sugar output since 2008-09 under the OGL.

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Rice Export Prices Unlikely to Decline, Mohanty Says

Jan. 11 (Bloomberg) -- Rice export prices will probably be sustained at about $600 per metric ton after drought and floods damaged crops in India and the Philippines, an agricultural economist said. Rice futures rallied in Chicago. “It is safe to say that the rice price is not going back to $300 per ton any time soon and is likely to remain around $600 in the near term,” Samarendu Mohanty, a senior economist at the International Rice Research Institute, said in a report to be published today, without citing a definite time frame.

The Asian rice price benchmark jumped to $607 per ton in Thailand last week from 2009’s low of $525 as the Philippines, the world’s biggest importer, advanced purchases and on concern India may become a net importer after a drought parched crops last year. The grain has averaged $616 since Dec. 2, according to Bloomberg data.

Higher costs for the staple for half the world’s population may push more people in least developed nations into hunger and some Asian governments may be forced to subsidize rice, widening their budget deficits, Frederic Neumann, senior Asia economist at HSBC Holdings Plc., said by phone from Hong Kong.
“One thing we saw in 2008 is that a gradual increase may well turn into a sudden spike and this could lead to political challenges further down the road,” he said.
Rice rose to a record in Chicago in April 2008 and the Asian benchmark export prices jumped to their highest level ever a month later, after India and other exporting countries curbed shipments, adding to concerns of shortages that sparked riots from Haiti to Egypt.

Import Tenders

The Philippines may need to buy between 500,000 and 1 million tons overseas, adding to purchases from tenders last quarter, the U.S. Rice Producers’ Association said in a report published Jan. 8. State-run National Food Authority purchased about 2.2 million tons of overseas supplies in the tenders for delivery this year, spokesman Rex Estoperez said last week.

Rice futures in Chicago have jumped 34 percent from last year’s low of $11.195 per 100 pounds. The March-delivery contract rose for the first time in five sessions, gaining as much as 1 percent to $15.10 in after-hours trading in Chicago, reversing a 0.5 percent loss earlier.

Futures may rise to $16 per 100 pounds in the next three months as the Philippines remains in the import market, Peter McGuire, managing director at CWA Global Markets Pty, said by phone from Sydney today.

Global rice stockpiles are forecast to decline 2.7 percent to 121.1 million tons at the end of the 2009-2010 season because of smaller crops in countries including India, the Philippines, Iraq, Nepal, and Pakistan, the UN Food and Agriculture Organization said last month.

Global Stockpiles

Still, the global inventory will be higher than the 110.8 million tons in the 2007-2008 season, the FAO said.

India’s government will have 42 million tons available for sale to the poor in the marketing year ending March 31, against a requirement of 25 million tons, the U.S. Department of Agriculture’s Foreign Agricultural Service said last month.

Stockpiles in India “should provide much-needed relief to the market,” because it will mean the South Asian nation does “not need to turn to imports,” Mohanty said. India, the world’s second-biggest producer, may harvest 71.65 million tons of the monsoon-sown rice, higher than the 69.45 million tons forecast in November, the government said last month. Warehouses held 15.35 million tons on Oct. 1, the start of the new marketing year, the government said Jan. 5.


India Imports

“Regardless of the press from the Indian government, the belief is widespread throughout the rice trade that something between 2 and 3 million tons of imported rice will be bought there sometime in the next three months,” the U.S. Rice Producers said.

A purchase in excess of 2 million tons by India will make the South Asian nation a net importer for the first time in more than two decades. India, which ships higher-value basmati rice, was forecast by the U.S. Department of Agriculture last month to export 2 million tons this year.

“We see the human and political imperative there to make this unavoidable,” U.S. Rice Producers said, referring to India importing as much as 3 million tons. “It is difficult to see prices falling much, if any, given the world situation.”

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Sugar exports capped, steel imports allowed

NEW DELHI: The Centre on Friday took a twin step of putting a virtual cap on sugar exports and allowed unrestricted steel imports to arrest their spiraling prices.

Worried over soaring prices, which has hit the common man hard, the centre is also exploring the ways of processing the imported raw sugar lying at the ports following up banning its process in the state.

The government gave 15 more months to sugar millers to meet their export obligations to plug exports under any manner in its bid rein in the prices which has more than doubled since last January and touched Rs 45 per kg in the retail markets.

The government has given the millers time to till March 31, 2011 to meet re-export obligations of around one million tonne sugar against raw sugar imported between September 2004 and April 2008 under the advance licence scheme. The obligation was to be met by December-end. The step is expected to augment the domestic supply.

The food ministry said it is exploring ways to process imported raw sugar that is lying at ports due to the ban imposed by up. "We are looking at what could be done to process the raw sugar lying at various ports," a ministry official said, adding it may relax import norms so that processing can take place in some other states. As a second option, the sugar millers can also discharge their obligation by paying customs duty for the sugar imported between september 2004 and april 2008, DGFT said.

On the steel front, which has also seen a 10-15% jump in prices, the centre allowed unrestricted imports of hot-rolled steel, mainly used by auto and consumer durables industries, which were planning price hike to offset rising raw material costs.

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Govt extends deadline for exporting non-basmati rice

NEW DELHI: The government on Monday extended a deadline for exporting 55,000 tonnes of non-basmati rice to four African countries by three months, just a few days after the Commerce Ministry gave permission for export of 10 lakh tonnes (one million) of rice to 21 other African countries.

In a statement issued here by the Agriculture ministry said that State Trading Corp of India (STC) would export the rice to Nigeria, Senegal, Ghana and Cameroon by July 30. So far, the agency has only been able to export only a paltry 15,000 tones to Ghana at about $500 per tonne.

According to a Commerce ministry official, the extension was made in response to a request for extension by the STC since there were no fresh import deals of late. The move, however, endorses the reading within the sector that parastatals may prove unequal to the task of striking a deal that is advantageous to India despite the economics for rice export proving positive.

Indian rice, with its price pressured down on account of oversupply and the reluctance of the government to pick up anymore levy supplies, reportedly costs not more than Rs 17,000 or $340 a tonne at the port currently. Better-quality parboiled rice with just 16 per cent brokens can reportedly be sourced from Chhattisgarh for as low as Rs 11,500 a tonne, way below the Rs 14,500 rate payable to mills for levy rice.

And at a low rate of around Rs 11,500, the export cost at Kakinada is pegged by trade at slightly lower than $300. Compared with Thai or even Viet Namese rice (they are the world’s leading rice exporters, producing 70% of global volume) Indian rice is relatively economical. By the first week of May, the benchmark Thai rice price for export fell to $530 a tonne from s $540 due to thin demand, with the planned government stock sale adding to the downward pressure. Apprehensive that prices could plummet further, the Thai government announced last week that it could “revise” a plan to sell 3.76 million tonnes of rice from its stocks.

Last Wednesday, the government had allowed parastastals STC, MMTC and PEC to export one million tonne of non-Basmati (premium, aromatic, long grained rice variety) rice exports to 21 African nations. Curiously, while the exports are apparently on government-to-government account and to be routed through the parastatals, the actual sourcing and shipping are reportedly expected to be sub-contracted to private firms including the Delhi-based Shri Lal Mahal Ltd, Emmsons International and Amira Foods.

That has already set off apprehensions among commodity experts that the private sector may once again end up, cocking a snook at parastatals, raking in the big profits on the first significant steps to open up rice exports totally by doing away with the conditional ban imposed early last year.

A meeting of a committee of secretaries recently decided to open up wheat exports to the tune of two million tonnes to the private sector, a move meant to sponge up as much of the wheat glut in the plunging domestic market for sale outside the country.

In the case of rice, however, the government appears to be deliberately proceeding far more cautiously in completely lifting the blocks to export despite an estimated production of 98.89 million tonnes in the crop year to June.

According to the agriculture ministry, that would be higher by about 2.3 percent compared to last year. But rice stocks with the government have mounted to phenomenal highs, necessitating exports urgently although global rice prices have eased up since early this year based on improved global output prospects. On May 1, India's rice stock rose 66 percent on year to 21.4 million tonnes.

That notwithstanding, the government has been reluctant to make any bold decisions on rice exports in the throes of the general election and persistently high food prices, choosing instead to allow exports on a governmetn-to-governmetn basis to mainly African countries, ostensibly on “humanitarian” considerations. Unlike Western importers such as the EU and USA as well as W Asia, African nations have been big buyers of non Basmati rice varieties.

The imposition of MEP (minimum export price), aimed at preventing more popular non Basmati varieties of domestic consumption from flying out of the country in big quantities and consequently boosting rice prices in the country, hurt the African nations the most. Last year, the FAO urged the Indian government to take the lead in lifting the export bars and easing global rice prices.

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EU may ban Indian groundnut imports due to aflatoxin

Groundnut exporters may find it difficult to make it to European Union (EU) markets. Indian Oilseeds and Produce Export Promotional Council (IOPEPC), earlier known as Indian Oilseeds & Produce Exporters Association (IOPEA), has sounded a red alert to groundnut exporters that EU may ban groundnut imports from India on account of presence of aflatoxin (a kind of fungi).

During an awareness programme on quality upgradation of exportable groundnut at Rajkot, the apex body of oilseed exporters called for a need to generate quality products in India.

“Our future may turn bleak if we fail to fix aflatoxin problem and if we do not maintain the quality of international standard. We must generate quality product not only for India but also for international market.

Indian processors have not taken up technical upgradation and changes in machineries to produce export quality groundnut for a long time,” said Sanjay Shah, chairman, IOPEPC.

“European delegation is scheduled to visit India this September for examining the processes used by export units. If they do not find any changes in the units, they will not hesitate to ban groundnut import from India. Processors know everything about cleanliness and quality norms but they do not follow it,” said D Thara, MD, Gujarat Agro Industries Corporation.

“Changes should be made at APMC level and all the process units and farmers, who supply raw materials, should be registered,” she suggested. “India exports 250,000-275,000 tonnes of groundnuts, mostly from Gujarat. EU constitutes less than 15 per cent of the total groundnut exports from India. If we fail to match EU standard then we should be ready to face ban. Not only that, taking cue from EU, other importing countries might also do the same thing,” said Sanjay Shah.

The European commission will visit India in September to inspect quality standard and compliance of the groundnut processing for human consumption and bird food. Agriculture and Processed Food Products Export Development Authority (Apeda) intends to introduce a new procedure to insure compliance to European quality standards.

The industry needs to be optimistic to introduce and adapt to new system and implement changes as required under Good Manufacturing Practices (GMP). This is the last opportunity for the industry to gear up.

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India extends zero customs duty, ban on pulses export for a year

NEW DELHI -- India Wednesday extended the import of pulses at zero customs duty and the ban on exports on the products for another fiscal year due to decline of the mass consumption food product in the country.

"The decision today is to extend zero duty on import of pulses for one more year beyond March 31, 2009. Pulses can now be imported at zero duty for one more year till March 31, 2010," Indian Home Minister P. Chidambaram told the media.

The fiscal year starts April 1 and ends March 31 each year in India.

He said the government took the decision to increase the domestic supply of pulses, a popular food product in India.

"The government also decided to extend the distribution of imported pulses through the public distribution system for six more months till Sept. 30 this year," he said.

India banned exports of pulses and exempted them from customs duty since June, 2006.

An earlier report by the Indian government said Tuesday the import of mass consumption goods increased by 33 percent from April to December 2008 over the same period of previous year.

The import of edible oil, automobiles, fruits, vegetables, cotton, silk, rubber, spices, alcoholic beverages, marble, granite, tea, coffee and milk products have increased during the reference period, said the Indian Ministry of Industry and Commerce.

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Rice exporters to seek abolition of MEP, want DEPB benefits

New Delhi (PTI): India's rice exporters at an emergency meeting here on Monday decided to approach the government and demand an immediate reduction of the minimum export price to enable them compete with rival Pakistan.

It was decided that the All India Rice Exporters Association (AIREA) would approach the Commerce Ministry to either abolish the Minimum Export Price (MEP) of Basmati rice or cut it to at least $ 800 a tonne level, an exporter said.

The meeting was called to discuss strategy as the ministerial panel on food last week deferred a decision on reducing the MEP from the current level of $ 1,100 a tonne.

Pakistan is currently selling Basmati at USD 1,000 a tonne to lure international buyers, exporters said. Rice exporters also demanded benefits under Duty Enititlement Passbook (DEPB) scheme as they have made losses of Rs 5,000 crore this season.

"If the government did not reduce the MEP, the losses would go up to Rs 7,000 crore," the exporter said, adding this is mainly due to lower export this year.

Under DEPB, exporters get the benefit of duty-free import equivalent to one per cent of their export value. They can sell the benefit to actual users as well since DEPB is transferable.

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MPEDA to promote Indian marine products in US, Europe

Kochi (PTI): With global downturn causing a slump in seafood exports from the country, Marine Products Export Development Authority (MPEDA) will be embarking on a campaign to promote Indian marine products in markets abroad, especially in US, Europe, South Africa and South America.

MPEDA Chairman, G Mohan Kumar, has left for promoting Indian seafood products in South African and South American markets and will also attend the International Boston Sea Food Show, MPEDA sources told PTI.

He was likely to hold discussions with Sysco, a US- based company, which had agreed to promote Indian Black Tiger, the sources said.

In order to overcome the challenges posed to marine exports by recession, there were also plans to launch a Brand India campaign, which had been approved by the government.

The Mumbai-based Messers Lintas India had been given the work order in this regard, the sources said.

There is a 'silent transition' in the consumption pattern of seafood in the developed market, especially the US.

Americans earlier spent about 48 per cent of their food budget for eating outside whereas, due to current recession, there had been significant reduction in those visiting restaurants, Mohan Kumar said.

Woman were visiting retail outlets to buy stuff for cooking at home and this would result in the demand pattern for seafood. Indian marine products should reach the retail chains in the developed market, he said.

However, most of the exporters had not made much headway due to lack of marketing skills and efforts on various other fronts.

Due to the present situation, there were fears that exports of shrimp, which accounted for 52 per cent of India's total marine exports, could be affected.

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Firms renege on veg oil imports as prices fall

NEW DELHI: Vegetable oil traders are reneging on contracts to import palm oil as they expect benchmark Malaysian prices, which sank to a nine-month low this week, to fall further, a leading trade official said on Thursday.

"Amid falling prices, Malaysian traders complain that some Indian traders are backing out of deals and have stopped issuing letters of credit," Solvent Extractors' Association President Ashok Sethia said.

"There are expectations that prices will drop further." Falling prices and an expected rise in domestic oilseed output were likely to spur the government to reimpose import tax on crude vegetable oils and allow limited exports of some oils, Sethia added.

India, the world's biggest vegetable oil importer after China, in April allowed duty-free imports of crude vegetable oils and cut the levy on refined oils to 7.5 per cent. In March, the government had banned exports of all vegetable oils for a year despite tiny overseas sales.

India imports almost half of its annual consumption of about 11 million tonnes of vegetable oils. It buys palm oil from Malaysia and Indonesia and soyoil from Brazil and Argentina.

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Govt allows export of 25,000 tonnes of corn

MUMBAI: The government has allowed export of 25,000 tonnes of corn to Kenya, Somalia and Burundi under the United Nation's humanitarian relief operations in those countries, a trade ministry release said late on Tuesday.

India on July 3 banned export of corn till October 15. The country had on July 10 allowed export of consignments that had been handed over to customs authorities before the ban order.

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Govt may allow exports of non-basmati rice to Africa

NEW DELHI: With the area under paddy cultivation increasing, the government is mulling at allowing exports of about three million tonnes of non-basmati rice to African countries after November.

Currently, export of non-basmati rice is banned to ensure availability of the commodity in the domestic market and to keep a check on inflation, which has since come closer to the 12 per cent mark.

"Even if the ban is not fully lifted, we may export 2-3 million tonnes after November to some African countries," a top Commerce Ministry official told PTI.

He said a bumper crop of 94 million tonnes of non-basmati rice is expected in November, of which six million tonnes would be surplus. India's summer-sown rice crop was planted on 23.13 million hectares as on July 31, up 11 per cent from 20.76 million hectares a year-ago. Besides a ban on the non-basmati variety, export restrictions like minimum price fixation of 1,000 dollar per tonne and export tax were imposed on the expensive basmati rice.

The country saw a record production of 96.43 million tonnes in the 2007-08 season. The rice harvest comes into the market from October. Export was allowed for the following six months, before being banned in April this year.

However, Rice exporters demanded that export ban of non-basmati rice be eased and suggested that the Centre may put a cap on the quantity to be shipped for its adequate availability in the domestic market.

There are many options available with the government to regulate instead of putting a blanket ban on the exports, All India Rice Exporters Association President Vijay Setia said.

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Spices Board alerts exporters to contamination threat from Vietnam

KOCHI: The Spices Board here, has through a notification, alerted all exporters, manufacturers and other related industries to contamination found by European Union (EU) in whole star anise and Saigon cinnamon, which is imported from Vietnam.

Importers and manufacturing units of curry powders and garam masalas are required to make their imported consignments of whole star anise and Saigon cinnamon free from non-approved food colour, Chrysoidine, to avoid any kind of exports rejection and recall of their consignments.

According to a Spices Board press release issued in Kochi, which stated: in a rapid alert notification, the EU has informed of potential contamination of whole star anise and cinnamon from Vietnamese with a non-approved colour known as Chrysoidine.

The notification issued by the European Commission (Health and Consumers, Directorate - General) recently in Brussels has observed that Chrysoidine is a genotoxic carcinogen, exposure of which to a person's diet will increase the risk of cancer.

It has been informed that there are no analytical methods now available to test this.

This is not a permitted food colour in EU. The notification says that it has received limited intelligence regarding potential contamination of whole star anise (Illicium verum) and Saigon cinnamon known as Vietnamese Cassia (Cinnamomum loureirii) of Vietnamese origin.

The EU notification also states that they had received this information through their normal horizon scanning activities. It also maintained that the intelligence is in relation to consignments destined for Indian market.

Further, it clarified that there is no evidence for this product entering in the food chain in Europe.

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India to register all cotton export contracts

MUMBAI: Indian cotton exporters will have to register all export contracts with the Textile Commissioner before shipment, director general of foreign trade said in a notification late on Tuesday.

Earlier this month, government took measures to raise local supplies by scrapping import duty on cotton and removing exports incentive.

More measures, including quantitative restriction on exports or fresh duty, were being considered to boost supplies and curb exports, a senior government official had said last week.

Indian exports may jump 72 per cent to touch 10 million bales in the year ending September 2008, compared to a year ago, the official had said.

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