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India’s basmati rice exports are set to zoom in 2009-10 with industry expecting 55.5% growth over last year to record 2.5-2.8 mn tonnes.The Indian Council of Agricultural Research has certified Pusa 1121 as basmati after conducting detailed analysis from samples obtained from the market.The Pusa 1121 variety, which accounts for 60 per cent of basmati exports, was developed by ICAR and released for commercial cultivation in 2003.

India has decided to hike the maximum retail price (MRP) of urea from Rs 4,830 to Rs 5,310 a tonne with effect from April 1. The Union Cabinet also gave the go-ahead for freeing all non-urea fertilisers from MRP controls, as part of the move to usher in a Nutrient Based Subsidy (NBS) regime in the coming fiscal. At present, the MRPs of 19 fertilisers are fixed by the Centre. The Cabinet's decision would technically confer on companies the freedom to set farmgate prices in 18 out of the 19 fertilisers, with urea continuing to be subjected to MRP controls.

US stocks rose on Friday as investors took the Federal Reserve's discount rate increase as evidence the financial system is healing but worried the eventual withdrawal of easy money is likely tol hurt Wall Street, analysts said.The Nasdaq Composite Index edged up 2.16 points, or 0.10 per cent, to 2,243.87. The Dow ended the week 3 per cent higher and the S&P 500 3.1 per cent higher, the best performance for the two gauges since late November. The Nasdaq rose 2.8 per cent, its best weekly showing since late December.

US Federal Reserve Chairman Ben S. Bernanke will probably assure Congress that the central bank is mindful of the lack of job growth in the U.S. and an increase in the benchmark interest rate isn’t imminent after the Fed’s decision to raise the cost of direct loans to banks, Bloomberg reported.

The Indian Prime Minister’s Economic Advisory Council, has pegged growth in the next financial year (2010-11) at 8.2 per cent as the agriculture sector is expected to turn around next year. It also predicted that the country would return to 9 per cent growth in 2011-12.Along with these, the panel pitched for raising duties in the coming Union Budget, as part of the rollback of stimulus measures.

Gold
Spot Gold prices came under pressure towards the end of the last week after touching a high of $1121 levels in the beginning of the last week. The yellow metal’s gains were capped on the upside as strength in the dollar was witnessed after the US Federal Reserve unexpectedly increased its discount rate by 0.25%. Discount rate is charged to banks for direct loans from the central bank. Increase in the discount rate will encourage financial institutions to rely more on the money markets rather than the central bank for liquidity needs.

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Gold prices also took cues from reports that the International Monetary Fund (IMF) has decided that it would be selling some of its reserves in the open market. Speculation that the supply of the yellow metal may increase has led to increasing concerns amongst the investors. Moreover, there is a speculation that the Federal Reserve may start unwinding its stimulus packages on the back of good economic recovery in the country. Unwinding the stimulus may slow down the growth and the dollar may further gain strength. The US Federal Reserve may increase interest rates on the back of economic recovery in the US and this may increase the demand for the dollar. If the dollar strengthens, gold prices may suffer. A stronger dollar usually exerts pressure on prices of gold. Spot gold have a strong support at 1062/1042 levels and Resistance at 1145/1160 levels.

Base Metals
Base metal prices gained in the last week despite inventories rising to new highs on the London Metal Exchange (LME). Indication of growing demand in the physical market is being reflected in rising premiums. This factor has also underpinned sentiment towards the base metals complex. Prices received upside support despite strength in the dollar and the absence of Chinese markets during the week on account of Lunar New Year holidays. The US Dollar strengthened back after falling below 80 as the Federal Reserve increased the discount rate for banks to 0.75% from 0.50%, indicating improvement in financial market conditions.

Demand for the red metal may increase in the next week as Chinese markets open on Monday after a week long holiday. China is the leading consumer of metals in the world, including copper. Nickel prices gained against a backdrop of a rise in other metals but signs of nascent demand from stainless steel producers have revived hopes that the industry is recovering. LME inventories have declined for five days in a row last week and premiums have also improved. However, Base metal prices could come under pressure as markets still remain susceptible to further volatility in prices. Strength in the dollar could add downside pressure on prices. We expect the dollar to strengthen as investors could shun riskier and higher-yielding investment assets and flock to the safe-haven and low-yielding dollar. MCX Feb Copper shall find a strong support at 313/305 levels and resistance at 342/351 levels for the coming week.

Energy
Crude prices gained last week amidst some positive economic data releases from Japan and US leading to speculation that the demand for crude may increase. However, the strength in the dollar capped the upside movement in crude oil prices. The dollar strengthened as the Federal Reserve announced a hike in discount rate by 0.25%. Data from American Petroleum Institute and the US Energy Department showed that crude inventories have been on a continuous increase. US crude inventories climbed 3.09 million barrels last week, as per data released by the US Energy Department. The increasing inventories in the world’s largest consumer have led to concerns over the demand for crude oil. The Federal Reserve’s intention of unwinding its stimulus packages may hinder growth rate and thus lead to decrease in demand for crude oil. The strength in the dollar coupled with rising inventory may put crude oil prices under pressure. The dollar is expected to remain strong as the US may start unwinding its stimulus packages. The Federal Reserve may increase its benchmark interest rates which may increase the demand for the dollar. MCX Feb Contract shall find a strong support at 3450/3330 levels and resistance at 3720/3810 levels for the coming week.

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