Commexes turnover to cross Rs112 lakh crore in FY’ 11

The surge in the turnover is mainly driven by a rise in bullion prices, which pushed the turnover of precious metals on exchanges by nearly 70%

New Delhi: The trading turnover of all commodity exchanges in India is expected to grow by 44.24% in the current fiscal to reach Rs112 lakh crore, reports PTI quoting the market regulator Forward Market Commission (FMC).

"The overall trading turnover of commodity exchanges in the country will be more than Rs 112 lakh crore in the current fiscal," FMC chairman BC Khatua told reporters here today on the sidelines of an event organised by the Associated Chambers of Commerce and Industry (Assocham).

He said during the last fiscal, the commexes in the country had clocked a turnover of Rs77.64 lakh crore.

The trading turnover in commodity exchanges in the country has already crossed Rs88 lakh crore in the current fiscal in the first fortnight of January.

"We still have five fortnight periods left in the current fiscal and I am sure that it would easily cross Rs112 lakh crore," Mr Khatua said.

He, however, expressed concern over the slow growth in the trading turnover of agri-commodities in exchanges.

"We are yet to touch the trading level of 2006-07 fiscal in agri-commodities...This year also, trading in agri commodities are expected to grow by 7% only," Mr Khatua said.

According to information available on the FMC website, the turnover of commodity exchanges in the country during the first nine months of the current fiscal rose by nearly 50% to Rs82.7 lakh crore.

The surge in commex turnover during the current fiscal is mainly driven by a rise in bullion prices, which pushed the turnover of precious metals on exchanges by nearly 70% to Rs37.5 lakh crore as compared to Rs22.1 lakh crore in the corresponding period last fiscal, FMC said.

Besides, the total trade of metals other than bullions on the exchanges during April-December period also rose by 64.4% to Rs19.37 lakh crore.


Govt watching crude prices: Finance minister

Pranab Mukherjee pointed out that India had managed the situation even when crude prices touched a record $147 per barrel in July 2008

New Delhi: Concerned over a spike in crude oil prices in international markets due to turmoil in the Middle East, finance minister Pranab Mukherjee today said the government is monitoring the situation and will manage it, reports PTI.

"Unfortunately, because of developments in the Middle East and its impact on the Arab world... (it) is causing uncertainty about production, about availability. We are watching the situation," Mr Mukherjee told reporters here.

He said the finance ministry is in constant touch with its counterparts in the petroleum ministry on the unfolding situation.

He pointed out that India had managed the situation even when crude prices touched a record $147 per barrel in July 2008.

"... At that time also, we had to manage the situation.

Government will take care of it (now)," Mr Mukherjee said.

The FM's comments come in the wake of massive protests in Egypt by demonstrators demanding the resignation of president Hosni Mubarak.

Similar protests have also erupted against the authoritarian regimes of other Arab nations like Yemen and Jordan. Last month, Tunisian dictator Zine al-Abedine ben Ali was deposed in an uprising that left 200 people dead.

The severe winter conditions in Europe and US had already pushed crude oil prices to a two-year high of over $90 per barrel in January 2011.

Crude oil prices continued to rise in Asian trade today, with Brent crude within a whisker of breaching the $102 per barrel mark as the unrest in Egypt and other parts of the Middle East continued to weigh on the investor mood, analysts said.

West Texas Intermediate (WTI) light sweet crude for March delivery, gained 2 cents to $90.79 per barrel, while Brent North Sea crude for March delivery advanced by 25 cents to $101.99 per barrel, in Asian trade today.

In addition, the turmoil in Egypt pushed up the price of Brent crude price to an intra-day high of $102.08 per barrel yesterday, its highest level since late-September 2008.


Marico, Dabur suspend operations in Egypt; trade disrupted on fears of looting

International consequences and impact on India will be more severe if situation deteriorates; other companies prefer to wait and watch for the situation to unfold

Marico and Dabur have temporarily shut down their units in Egypt and trade between the two countries has been disrupted following the worsening unrest in the Arab nation, according to companies and trade organisations.

It has been reported that at least two other companies-Asian Paints and Emami-which have operations in Egypt, are keeping a close watch on the situation before taking a decision either way. Wipro, Ranbaxy and IFFCO also have wholly-owned companies in the country.  

Meanwhile, the government has said that it has "not received any information so far" of any disruption of India's shipping movements through the Suez Canal, following the Egyptian crisis.

Analysts suggest that if the situation worsens, not only would the trade of goods and services between the two countries be affected, but the consequent impact on businesses across the world could hurt critical inputs like oil that would also impact India.

"Egypt (and the Middle East and the North African region) is an important market for Marico. In view of the current situation, our factories have been temporarily closed as a safety measure," said a spokesperson for Marico Industries. The region accounts for about 7%-8% of the company's revenues which totalled over Rs2,660 crore in 2009-10.

It is difficult to say how long the unrest will go on-so many companies are waiting and watching for the situation to unfold before taking a decision.

Dabur India chief executive officer Sunil Duggal said that the company has suspended its hair oil production plant in Egypt. "We are watching the developments. If the unrest continues for a longer period of time, there might be some impact," said Mr Duggal. Egypt accounts for about 2.5% of Dabur's consolidated turnover, which was about Rs3,400 crore in 2009-10.

Besides these wholly-owned units in Egypt, Tata Motors, Aptech, Iflex and Essar Global have regional offices in that country, according to information available with the Federation of Indian Chambers of Commerce and Industry (FICCI).

Trade between the two countries has also been disrupted with traders fearing looting and arson.

"At this point of time, there is disruption in both export and import trade dispatches from Egypt and these have been kept on hold," said Ajay Sahai, director-general of the Federation of Indian Exports Organisation (FIEO).

There have been reports of looting and arson, which has been a cause for worry. Exports aggregated $1.4 billion and imports totalled $1.7 billion in the last fiscal. With the pickup in demand, exports were expected to grow by 20%-25% in the current fiscal year.

Oil & gas, coking coal, raw cotton, rock phosphate and marble comprise nearly 95% of India's imports from Egypt. The principal export items are frozen meat, cotton yarn and synthetic yarn, rice, diesel, tobacco, electrical machinery, soybean, chemicals, automobiles and components, sugar, pharmaceuticals and tea.

"It is very unfortunate that that business is affected. The problems will definitely impact our bilateral trade," said ASSOCHAM secretary general, D S Rawat.
Maruti Suzuki, India's number one carmaker, exported around 3,000 cars to Egypt. Indian carmakers exported vehicles worth about $85 million in 2009-10, which is about 5% of the country's total car exports. Bike exports totalled about $4 million and truck exports about $1.4 million in this period.

Shipping channels do not appear to have been affected so far. "We have not received any report from either the Shipping Corporation of India (SCI) or the rest of the maritime industry about any disruption so far," said a senior official in the shipping ministry. But there are fears that the crucial Suez Canal link between the Mediterranean Sea and the Red Sea could be affected.


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