Last Updated : 01 May 2010 at 21:50 IST
Commodity Trends: India’s coconut exports up
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- Spot gold prices gained around 0.4 percent today taking cues from upbeat global market sentiments. However, declining trend in SPDR Gold holdings coupled with strength in the DX acted as negative factors. In the Indian markets, gold prices declined a
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India’s coconut exports to US and Europe has gained considerably in the last two years despite the recessionary trends due to efforts of the Coconut Development Board.
Exports of coconut products in the last financial year witnessed a growth rate of 34.19 per cent in value and 30 per cent in quantity compared with the previous fiscal. Against Rs 46 crore exports in 2005, the figure touched Rs 329 crore in 2008-09 and Rs 442 crore in 2009-10.Coconut product exports included desiccated coconut, ball copra, coconut oil, oil cakes, activated carbon, shell hukah, coconut shell, etc. Europe, Africa and US are the leading buyers of activated carbon whereas Australia, Netherlands, Russia and South Africa are major importers of coconut oil and other products.
India’s sugar output to rise 28%
India’s sugar output may rise 28 per cent to 22.7 million tonnes (mt) in the 2010-11 season starting October on account of expected higher cane supplies, the US Department of Agriculture (USDA) has said in a report. India’s ugar production is estimated at 17.7 million tonnes in the current 2009-10 season (October-September). In the previous year, the country produced 14.53 million tonnes.
IOC divestment likely
India Government plans to selll a stake in its biggest company as part of a plan to raise a record Rs 40,000 crore ($9 billion) from asset sales and use the proceeds to reduce the government’s budget deficit. The government may sell shares in Indian Oil Corporation (IOC) by March 31, Sidhartha Pradhan, joint secretary in the department of disinvestment said.
ONGC plans major acquistions
Oil & Natural Gas Corp., India’s biggest explorer, and Indian Oil Corp. are set to get approval from the government to spend five times more on acquisitions, giving them greater freedom to compete with China for assets. NTPC Ltd. and Steel Authority of India Ltd. are also expected to be permitted to make 50-billion-rupee ($1.1 billion) takeovers without government clearance.The state-run companies, which can now invest 10 billion rupees, may get the higher limit in three weeks, he said
Sugar traders hold off purchases as prices plunge
India’s sugar traders are holding off new purchases following the plunge in prices and consequent losses suffered.
India’s coffee production to dip
India’s Coffee production for 2010-11 is likely to be lower than normal due to the delayed and inadequate pre-blossom showers across the growing regions in south India. The rainfall during February and March was lower than normal this year in growing areas of Karnataka while it was fairly satisfactory in Kerala and Tamil Nadu. This is likely to result in a drop of around 24 per cent in the coffee output this year to around 220,000 tonnes, according to estimates.According to Coffee Board, the domestic coffee output for 2009-10 was 289,600 tonnes as per the revised post-blossom estimates and it may be revised further as many growers are yet to sell their entire produce for the year, industry sources said.
IJMA calls for ban on raw jute exports
Faced with the problem of rampant exports of raw jute to countries such as Pakistan, China and Vietnam at a time when jute mills in India are starving of the fibre crop, the industry has urged the Union textiles ministry to impose immediate curbs on raw jute exports on the lines of the existing restrictions in raw cotton exports.
The Indian Jute Mills Association (IJMA), the apex body, has sought intervention of the Union textiles secretary, Rita Menon, to restrict raw jute exports, ease prices and make the fibre available to jute mills in the country.
New commodity bourse
Mumbai-based information technology firm IT People (India) has proposed to set up a national-level commodity exchange, in association with Indian Farmers Fertiliser Cooperative Ltd (Iffco) and public sector Rashtriya Chemicals and Fertilizers Ltd (RCF). If approved, this would be be the sixth national-level exchange to offer hedging in commodity futures. A source said the three companies had joined hands to float a new entity with initial equity capital of Rs 100 crore, the minimum net worth required for setting up an exchange.
NSE Gold Funds launch dropped
National Stock Exchange has postponed the launch derivatives on gold exchange traded funds (ETFs). The launch was postponed after Forward Markets Commission (FMC), the regulatory body for commodities trades in India, intervened and said that regulation of such products were under the purview of FMC and not Sebi. Earlier, NSE had taken permission from Sebi to launch futures & options products with gold ETFs as the underlying asset.
MCX raises margin on Mentha Oil
In order to curb speculation, leading commodity bourse MCX increased the amount (margin) investors need to deposit for trading in mentha oil futures by 10%. With this hike, effective from Wednesday, investors need to deposit 19% of the value of mentha oil they intend to take in. Earlier, the margin was only 9%. “As a risk management measure, the exchange has decided to levy a special margin of 10% on buy side in all mentha oil contracts,” MCX said
Spot Gold prices gained in the last week and touched a high of $1175/oz on Comex, despite the strength in the dollar in the earlier trading sessions. Surge in inflation is reviving demand for the metal as a store of value. India which is the world’s largest buyer of gold jewelry, faces rising inflation concerns. Accommodative policy by the US government is also raising risk of inflation and the yellow metal is attracting demand as a safe-haven.
The US dollar weakened slightly at the end of the week after revival in risk appetite in the financial markets lowered demand for the currency. Expectation of Greece receiving a bailout worth 100 billion to 120 billion euros over three years has reduced concerns over sovereign default by the ailing economy. We expect the dollar to weaken as hopes of a bailout for Greece may trigger risk appetite in the financial markets and reduce demand for the low-yielding currency. Gold prices will trade with a positive bias on strong global demand and the weakness in the dollar. The yellow metal prices usually trade inversely to the greenback. Spot gold has a strong support at $1150/$1130 levels and resistance at $1190/$1200 levels. MCX June Gold has a strong support at Rs.16800/Rs.16550 levels and resistance at Rs.17250/Rs.17400 levels. Spot gold trading consistently above $1175 levels would lead to a sharp rally in gold prices.
Base metals tumbled last week on worries of stricter monetary policy in China and the Euro-zone debt problems. Investors fear that these economic concerns would restrict demand. China has recently introduced a number of measures to cool its property market and further tightening is expected. Credit downgrades last week of Greece, Portugal and Spain have caused investors to flee riskier assets. Markets are still wary of the ongoing concerns in the Euro-zone. After downgrading Greece’s debt to junk grade and cutting the ratings of Portugal, the Standard & Poor’s (S&P) also cut Spain’s ratings to AA with a negative outlook. The debt crisis is spreading across the Euro-zone. In the coming week, the base metals pack would continue to trade with a negative bias as global issues coupled with Chinese concern of tightening monetary policies is dampening the investor sentiments. However, prices would be cushioned on the downside from a weaker dollar. MCX June Copper shall find a strong support at 320/314 levels and resistance at 340/351 levels for the coming week.
Crude oil prices gained on the Nymex in the last week as the weakness in the dollar towards the end of the week made the commodity prices look attractive for holders of other currencies. Crude oil prices touched a high of $85.63/bbl on the Nymex on Thursday as the dollar softened after rallying in the earlier sessions of the week. A possible Greece bailout reduced concerns amongst the investor group which led the low-yielding dollar to weaken. In the coming week, crude oil prices are expected to trade on a positive bias as the weaker dollar would make the commodity prices more attractive for holders of other currencies. MCX May Contract shall find a strong support at 3660/3560 levels and resistance at 3900/3950 levels for the coming week. NYMEX Crude has support around $83/$81 levels whereas resistance is seen around $88/$90 levels.
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