Bonds, Currencies & Commodities
India needs to export foodgrains without further delay

Favourable monsoons have brightened the possibility of foodgrain export in order to reduce the current account deficit- CAD for India. While prices fluctuate in the international market, export we must

Although some parts of the country did not get adequate rainfall, India experienced a timely arrival of southwest monsoon and, on the whole, got an excess of 8% and this augurs well for the ensuing kharif season. Unfortunately, some areas, such as Uttarkhand experienced unprecedented floods, causing huge loss of life, property and standing crops. It will probably take years for this state to return to normalcy, but this has caused irreparable damage in the minds of people there and the whole country. Other areas, such as Odisha, Bihar and Jharkhand had deficient rainfall, but Uttar Pradesh and West Bengal made up due to excess rainfall.


In 2011, India’s rice output was 92.78 million tonnes, and this year, thanks to this good monsoon, this is estimated to be higher, and guestimates are around 100 million tonnes. Such a bumper output will facilitate the implementation of the Food Security programme without much difficulty, provided transportation and distribution arrangements are made methodically. The government is cautious and wants to ensure that foodgrains are made available in time and distributed throughout the country. However, storage facilities continue to be a problem.


While the new crop arrivals will begin soon, the central foodgrains stocks stood at

58.93 million tonnes (MT), consisting of 38.26 MT of wheat and 20.57 MT of rice, which are estimated to be twice the requirements needed to cover the buffer and strategtic reserves. We must export foodgrains without much delay.


Meanwhile, a few things have been worrying the government, such as the CAD (current account deficit) and rupee depreciation. The corrective steps taken to control gold imports have helped but there is the imperative need to accelerate our exports, both foodgrains and industrial products.


Due to the delays in the decision making process, we could not take advantage of

foodgrains export, starting with wheat, which also faced severe international competition from countries like Russia and Ukraine. Their prices are much lower than our own "floor" price and buyers have been flocking to book from them.


Prices fluctuate in the international market, and export we must. The Cabinet

Committee on Economic Affairs cleared the export of 2 MT of wheat, but it is most unlikely that we will be able to get any better than $230-240 per tonne FOB (freight on board) which is prevailing now. Instead of dilly-dallying, we must make the deal and ship the grains out as soon as possible, considering the fact that Food Corporation of India (FCI) spends about Rs25 crore for handling and storage charges per 1,00,000 tonnes. The conditions in FCI godowns need audit and it will be another story if we were to dwell on the warehousing plans of this organisation.


By this export commitment and actual shipments, we must make way for the old stocks to move out and facilitate the kharif crop to come in. In any case, it is not easy to assess the loss arising out of rotting foodgrains, rodents, pilferage and open storage outside the covered warehouses, due to inadequate space.


From the new crop of about 100 million tonnes of rice, government is expected to procure some 35 million tonnes to meet its Food Security programme. Our agricultural front can play a vital role in helping to reduce the CAD. For instance, in the case of the sugar industry, simply by implementing the 5% mandatory ethanol blending programme, government could save upto $340 million per year in oil imports. Soyameal production, for example, is expected to touch 11.5 MT, out of which export orders for 5,00,000 tonnes have been signed at around $515 per tonne, FOB. Iran and Japan have booked 1,00,000 tonnes each while the rest are for the Middle-East. This will also help in reducing our CAD. In the next few weeks, we would be able to at least get an idea of the export commitments from this sector, thanks to the monsoon.

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)




3 years ago

Dear sir

I have an IEC LICENSE i want to become and export commission agent in India please help me sir

My E-mail:[email protected]

My mobile no : 8341835077

Thanks and Regards

MCX-SX gets one-year renewal of recognition from SEBI
SEBI renews MCX-SX recognition but directs the bourse and its Clearing Corporation to strengthen governance structure in a manner that Jignesh Shah’s team virtually loses management control or core decision-making powers to a team of directors 
In a late night development, the Securities and Exchange Board of India (SEBI) issued a press release granting a one-year renewal of recognition from 16th September to MCX-SX, promoted by Financial Technologies Ltd (FT), despite the massive scam that has erupted in the FT-promoted National Spot Exchange Limited (NSEL). Under the SEBI directive, effective control over key decisions will now vest with a committee of directors. Does this really mean that a professional management will run the bourse? Well, it will depend on who the chosen directors are. There has been a spate of resignations at the entire FT-MCX group, but barring the public interest directors, most have been chosen by Jignesh Shah’s team.
MCX-SX has been asked to set up a committee comprising two Public Interest Directors and three nominees from among its institutional investors within two days from 16th September to oversee the following functions: all financial transactions related to investment, lending, and borrowing of funds and related party transactions as defined in AS 18; appointment of key management personnel, all facility/infrastructure sharing arrangements and all major capital expenditure. The committee will also advise the board on all major policy matters and maintain a record of proceedings. 
The SEBI release says that a similar committee will also be constituted by MCX-SX Clearing Corporation (MCXCCL), which is a subsidiary of MCX-SX to oversee the clearing and settlement functions in addition to the functions listed above. 
The SEBI release says: “In-order to further secure the management of the exchange and clearing corporation, shareholders of MCX-SX and MCX-SX-CCL in AGM/EGM would examine conflict of interest and compliance with SECC Regulations 2012 by the directors and the key management personnel including managing director, and take appropriate action including reconstitution of board, reappointment of any key management personnel and will report to SEBI within 30 days from the date of renewal of recognition. Any non-compliance with the directions of SEBI as given above or which may be given from time to time or any adverse findings by any other regulator may result in withdrawal of recognition of the exchange.”


Ultratech to buy 51% in Jaypee's Gujarat unit for Rs4,000 crore

Jaypee group has been trying to monetise Jaypee Cement's assets in Gujarat since past year

UltraTech Cement, the country's largest cement producer said it would buy 51% stake in Jaypee Cement Corp's unit in Gujarat for about Rs4,000 crore.


Jaypee Cement's Gujarat facility has a capacity of 5 million tonnes per annum (mtpa).


Jaypee Cement wanted to sell its assets in Gujarat for raising some funds and had been mulling various options, including offloading to a private equity firm. The proceeds would be used to meet the capacity expansion and retire debt, among others things, it had said earlier.


Aditya Birla Group, the country's largest cement maker with 54 mtpa capacity, runs cement business through Ultratech Cement and plans to increase its capacity by another 10 mtpa by 2015. The two were engaged in negotiations for a little over a year now.


We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)