New Delhi: The government will decide whether to hike the cap on cotton exports in the current season beyond the existing ceiling of 55 lakh bales on 13th December, reports PTI quoting commerce secretary Rahul Khullar.
A meeting of the secretaries of the ministries of commerce, agriculture and textiles, which was scheduled to be held tomorrow, has been postponed till Monday, as Mr Khullar leaves for Brussels tonight for the India-EU Summit on 10th December.
“Cotton meeting has been postponed till Monday... Then we will take a decision,” he told reporters here.
Current trends, as well as the price situation of the natural fibre, will also be looked into at the review meeting.
The government had earlier accorded permission for the export of 55 lakh bales (170 kg each) of the natural fibre in the current cotton season, which runs from October to September.
Cotton production is expected to total 335 lakh bales in 2010-11, whereas domestic demand is pegged at 266 lakh bales.
Prices of the natural fibre have increased sharply over the past few months. According to industry experts, prices of the natural fibre are ruling at about Rs43,000 at present, compared to around Rs26,000 in the same period last year.
The government has also imposed a cap of 72 crore kg on cotton yarn exports this fiscal to help the domestic textiles industry in view of rising prices in the global market.
According to industry sources, prices of cotton yarn have increased by about 85% in the last nine months.
Total cotton yarn production is estimated at 346 crore kg in 2010-11, while domestic demand is pegged at 265 crore kg.
The textiles industry has been clamouring for restrictions on the export of cotton and cotton yarn, arguing that high prices are making their operations unviable.
India's cotton exports increased to 83 lakh bales during October-September, 2009-10, cotton season, compared to 35 lakh bales in the same period of 2008-09, as per official estimates.
New Delhi: The BM Munjal promoted Hero group will buyout the Japanese partner Honda from the world’s largest two wheeler producing venture, a deal for which would signed this month, reports PTI.
After months of negotiations, the Hero group is believed to have reached an agreement to acquire 26% stake of Honda in the 26-year old joint venture but it is not clear at what price.
“The deal is at the final stages and could be signed within this month,” a source said.
The two sides are in the final stages of working out the valuation.
According to sources in the know of the development, the two partners have agreed that current royalty rate per model paid to Honda will remain unchanged. The royalty paid in 2009-10 on an average was 2.3% to 3% of sales.
Moreover, Honda will continue to provide technology and models to the Hero Group for a transition period, the minimum for which is till 2014 as per their existing joint venture agreement.
The source said that interest of investors and all stakeholders of Hero Honda have been given top priority during the negotiations and it would not be compromised at any cost.
When contacted, a Hero Honda spokesperson declined to comment. On the other hand, Honda said it and the Indian partner “regularly hold discussions about the future of the joint venture. However, at this time, nothing is available to disclose.”
It is understood that the Hero Group is arranging funds on its own to finance the buyout of Honda’s stake.
The Hero group and Honda hold 26% each in Hero Honda that started operations in 1984 to become the world’s largest two-wheeler maker today.
In 2004, the Hero group and Honda had extended their agreement for 10 years, under which the Japanese partner would continue to provide technology to the JV. It was to come up for renewal in 2014.
Of late the market had been rife with speculation that the partnership is headed for a break-up with the partners unhappy with the existing circumstances.
While the Hero group wants the curbs imposed on export and technological development under their JV agreement to be lifted, Honda had wanted more royalty payment from the Indian firm.
Moreover, Honda’s move to enter the Indian two-wheeler market through its 100% subsidiary Honda Motorcycle & Scooter India in 2000 had not gone down well with the Indian partner.
New Delhi: State-owned oil companies may raise petrol prices by Rs1.50-Rs2 per litre early next week, while a Rs2 a litre hike in diesel rates is under the government consideration, reports PTI quoting a senior official.
“Petrol prices will be raised after the current session of Parliament ends on December 13,” the official said here.
A hike a diesel prices also looks imminent as crude oil prices have inched closer to $90 per barrel, widening the gap between domestic retail rates and their imported cost.
Petroleum minister Murli Deora met finance minister Pranab Mukherjee yesterday to discuss convening a meeting of the Empowered Group of Ministers (EGoM) next week to decide on hiking diesel rates.
“In all probability, diesel prices may be hiked by Rs2 per litre,” he said.
Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) had last raised petrol price on 9th November, just before the winter session of Parliament began.
“The last hike of Rs0.32 a litre was lower than the Rs1.1 per litre desired increase to make domestic retail rates at par with international prices,” he said. “The three firms are currently losing about Rs2.40 per litre on petrol.”
When contacted, oil secretary S Sundareshan said the government will not intervene in fixation of petrol prices which had been deregulated in June.
On diesel price hike, he said it will be a “political decision”.
“Oil marketing companies are losing Rs4.71 per litre (in revenues) on diesel sales. If global crude oil prices show no sign of abating, the government will have to take a view,” Mr Sundareshan said.
IOC, BPCL and HPCL currently lose Rs75 crore in revenues on selling diesel below its imported cost.
Freeing diesel prices from government control, as had been decided in June, is not possible at this juncture as it would mean passing on the entire Rs4.71 a litre hike to consumers.
“That will be unreasonable,” he said. “But some price hike will have to be passed on to consumers.”
He did not elaborate on the quantum of hike being considered.
The official said Mr Deora discussed how the Rs65,839-crore revenue loss IOC, BPCL and HPCL are expected to register this fiscal on selling diesel, domestic LPG and kerosene below cost, will be compensated.
So far, the finance ministry has committed to provide only Rs13,000 crore in cash while the oil ministry wants about half of the revenue loss to be met by the government. Another one-third would be provided by upstream firms like ONGC.
State-run IOC, HPCL and BPCL currently sell diesel at Rs4.71 per litre discount to its imported cost. If diesel rates are deregulated that is the amount by which retail prices will go up.
The EGoM had on 25th June freed petrol price and had decided to make diesel prices market-based in due course.
“Unfortunately, crude prices have been consistently going up since June,” Mr Sundareshan said.
International crude oil (raw material for making petrol and diesel) prices were around $72-$74 per barrel in June.
The 26th June decision had resulted in a Rs3.50 a litre hike in petrol prices in Delhi.
At that time, the government decided to raise the diesel price by an ad-hoc Rs2 per litre, even though the difference between the domestic retail price and imported cost of the fuel was almost twice of that.
Since then, diesel rates have not been changed while the price of petrol has changed five times since then.
For this fiscal, the three fuel retailers are projected to lose Rs65,839 crore in revenues on selling fuel below imported cost.
During April-September 2010, IOC, BPCL and HPCL lost a revenue of Rs31,367 crore on selling fuel below cost.
“Of this, Rs10,456 crore have been compensated by the public sector upstream companies through price discounts on crude oil and products. The ministry of finance has confirmed a budgetary support of Rs13,000 crore," Mr Sundareshan said.
The budgetary support was less than the Rs15,683.30 crore the oil ministry had sought to cover for the public sector oil companies' revenue losses in the first half of the current fiscal, he added.
Besides diesel, the oil retailers lose Rs272.19 on the sale of every 14.2-kg LPG cylinder and Rs17.72 per litre of kerosene.