The economic impact of the drought will be more severe in emerging markets. With the global economy slowing, the bad harvests could not have come at a worse time. India has had trouble taming its inflation and now it will get worse
The world’s food supply is in danger. Droughts around the world have slashed harvest forecasts. This time the problem is especially severe in the United States. Two consecutive La Niñas, cooler than average water temperatures in the eastern equatorial Pacific, have pushed the polar jet stream to the north opening up a large sections of the agricultural rich Midwestern US to temperatures in excess of 37°C and little rain. It has been the warmest 12-month period in the continental US since record keeping began in 1895. The effect on crops has been a disaster.
It is the worst drought in 55 years. As of late July nearly two-thirds of the US is experiencing some precipitation deficit. As of this week, the American Agriculture Department (USDA) declared 1,369 counties in 31 states as disasters. The designation is important because it allows the local farmers to qualify for aid. This is the largest number in the history of the program. The USDA also reported that 45% of US corn fields were in ‘poor’ or “very poor” condition up from 38% a week before. While 35% of the soyabean crop was in ‘poor’ or “very poor” condition, up from 30% a week ago.
Of course, the markets have reacted. The price of corn has hit a record high at $339 per metric tonne, 6% above its previous high in March 2011. Soyabean is not far behind. It is now selling at $662 per metric tonne, 20% above its all-time high reached in June 2008.
But the drought is not just a problem for the US. American corn represents 52% of the global exports in that commodity and 43% of the exports for soyabean. And the weather is not just bad in the US. Droughts and sometimes floods have also hit the Chernozem, the black earth belt that includes parts of Serbia, Bulgaria, Romania, Ukraine and Russia all the way into western Siberia. In Kazakhstan the world’s sixth largest export, the crop will be only 48% of last year’s record harvest. The price of wheat has risen 35% from May and is now selling for $356 a metric tonne. While this is still 18% below the record price of $439 reached in February 2008, it is certainly not really good news.
SEBI said it decided to extend ASBA facility in order to facilitate a system for making online applications for public issue of debt securities
Mumbai: Market regulator Securities and Exchange Board of India (SEBI) has allowed online subscription of bonds, a move that will reduce timeline for completion of the process, reports PTI.
"...in order to facilitate a system for making online applications for public issue of debt securities and to reduce the timelines of the issue process for public issue of debt securities, it has been decided to extend ASBA facility to public issues of debt securities," SEBI said in a notification.
As per the existing regulation, Application Supported by Blocked Amount (ASBA) is allowed in case of initial public offer of shares.
It has also provided option for subscribing to debt securities through an online internet interface with a facility to make online payment, it said.
Bond issuer should provide, through a recognized stock exchange which offers such facility, an online interface enabling direct application by investors to the public issue, it said.
The regulator has directed exchanges to put in place necessary systems and infrastructure for implementation of this notification.
Besides, it has also directed depositories, merchant bankers and registrars to create awareness among issuers and investors about the various modes available for making applications.
SEBI is looking into the possibility of brokers being used as front entities by some foreign investors, HNIs financiers and even company promoters