Bonds, Currencies & Commodities
Sugar production in FY13 likely to be at 25 MT: Rabobank

Concerns regarding the prospect of lower cane yields and sugar output in Maharashtra and Karnataka and the approaching peak sugar consumption period have led to retail prices of sugar going up by 15% over the last month says Rabobank, which specialises in agri-business

 
Mumbai: Sugar production for 2012-13 is expected to be at around 25 million tonnes (MT) against 26 MT last year while consumption is forecast at about 23 MT, reports PTI quoting a sugar quarterly review by Rabobank.
 
Monsoon rains have been 12% below normal as of end-August and though most of the cane producing regions are irrigated, dry weather is expected to impact the cane crop as irrigation from existing water reservoirs cannot offset the deficit in rainfall, the bank which specialises in agri business said.
 
Commenting on the domestic market, it said production in Maharashtra and Karnataka is likely to decline though the shortfall would be offset by increase in production in Uttar Pradesh and Tamil Nadu.
 
Maharashtra's sugar production is projected to decline by 15% to 7.6 MT in 2012-13 as against 8.9 MT in 2011-12 due to deficit rainfall and that in Karnataka by 21% to 3 MT.
 
Production in Uttar Pradesh, however, is expected to increase by 12% to 7.8 MT and that in Tamil Nadu by around 11% to about 2.3 MT, Rabobank said.
 
Concerns regarding the prospect of lower cane yields and sugar output in Maharashtra and Karnataka plus the approach of the peak sugar consumption period have led to retail prices of sugar going up by 15% over the last month, it said.
 
Retail sugar prices in Delhi and Mumbai are currently around Rs40 per kg, the highest in 18 months and 25% above year-ago levels, the bank said.
 

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Finance Ministry, bankers agree to resolve funding woes of realtors

CREDAI president Jain said Financial Services Secretary DK Mittal has asked banks to fund under-construction projects on priority basis as well as projects in tier II and III cities

 
Mumbai: Cash-strapped realty players have sounded upbeat after the Finance Ministry and bankers agreed to look into their grievances, primarily related to funding, reports PTI.
 
Financial Services Secretary DK Mittal met bankers and the real estate developers body Confederation of Real Estate Developer's Associations of India (CREDAI) and discussed various issues affecting the sector.
 
"We have seen very serious commitment by the government in creating more housing stock. During the meeting, Mittal asked banks to focus on funding under-construction projects which have been delayed.... a positive sign for developers who are facing liquidity crunch," CREDAI national president Lalit Kumar Jain told reporters after the meeting.
 
Jain said the secretary asked banks to fund under-construction projects on priority basis as well as projects in tier II and III cities.
 
"Many projects were stalled due to lack of funds. This will help in creating more stock, especially in small towns," Jain said, adding issues like approvals and clearances were also discussed at the meeting.
 
"Bankers have also agreed that factors like delay in project approvals, limitation on availability of land for real estate and even the FSI restrictions should be addressed, as they become a major hurdle when it comes to funding. If this issue is addressed, it will help create adequate stock," Jain said.
 
Mittal also asked the real estate apex body CREDAI, to conduct a survey of unsold housing stock so that a decision could be taken on unlocking their value, Jain said.
 
"There has been a general perception that developers are holding on to inventories to push up property prices. But the reality is different. We will appoint a consultant and conduct a survey as directed by the secretary, to find out the actual status of housing stock," he said.
 
"At present there is no method available to get the information on the actual status of the stock. We will do it through a credible agency. We will soon finalise the agency to do the job," Jain said.
 

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Will the stock market extend its run to the 10th day?

With the 9th day ending up positive, Moneylife finds out whether the 10th day will be positive or not

As expected, the positive sentiment emanating from the government’s reaction to clean up its image, albeit hurriedly, resulted in the stock markets ending up positive on the 9th day. Along with this, global factors helped too, with the European Central Bank (ECB) and Federal Reserve promising to be saviours. We had written a piece yesterday: Will the markets end positive for the 9th day? The Reserve Bank of India (RBI) had cut down Cash Reserve Ratio (CRR) by 0.25% to 4.5%, the amount of money Indian banks are mandated to hold with the RBI. However, it had kept rates unchanged, as it fears that a loose money policy may stoke inflation, with already easy money sloshing around globally. Will the stock market streak continue? Will the 10th day be positive as well or will it get jinxed?

We poured over the data and found out that the National Stock Exchange (NSE) Nifty Index has stretched its positive run nine consecutive days 24 times (25 times, if you include today), and found out that the 10th day was positive only 11 times, or 46% probability (again, random chance). The average return of these days was just 1.19%, with the maximum being just 2.80%. The last time the stock market extended its run to nine consecutive days was nearly five years back, on 3 October 2007, leading up to the peak of the global sub-prime crisis. We also found out that if the 10th day did indeed close positive, then the probability of the 11th day being positive was even lower, with only four occurrences out of 11. The average return on these four occurrences was found out to be, again, a paltry 1%.

Unless profit-booking happens to a large extent, with the RBI cutting CRR which will unleash at least Rs17,000 crore into the economic system, it looks like the positive sentiment is here to continue. However, as the numbers suggest, it is still a random outcome of guessing whether the market will close positive or not.
 

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