Oilmeal exports declined 57% in the first quarter of FY2009-10 on poor overseas demand. The total export of soybean oil fell 74%. Export of rice bran extract slumped to 38,448 tonnes from 81,418 tonnes and castor extract fell to 40,290 tonnes from 46,610 tonnes.  

A huge surplus stock of wheat, which was built up after two years of ban on exports and a good harvest, is leading the government to allow wheat exports of 900,000 tonnes by the State-run firms and 650,000 tonnes of wheat products by private firms. However, traders’ interest was muted as their demand for export subsidy has been rejected by the government making exports only to Bangladesh viable.

Delay in the arrival of monsoon has affected the sowing of paddy which is down by 25% as in the first week of July over the same period last year. The data released by the government shows that only about 38.14 lakh hectares has been sown compared to 51.80 lakh last year. The last glimmer of hope for paddy is now the forecast by the Meteorological Department which predicts good rains in the coming week.
 

• India will receive 93% of the normal rainfall this year. This is lower than the previous forecast of 96% by the India Meteorological Department.  

• The Central Government has increased the minimum support price of sugarcane by Rs26 per quintal to Rs107.76 per quintal for the current season from Rs81.18 per quintal last year. India’s sugar output is estimated to fall to 14.8 million tonnes in 2008-09 lower than the 26.5 million tonnes a year ago.  

• US Department of Agriculture (USDA) has said that the availability of wheat in the global market will be limited in 2009-10, although the global wheat stock is projected to be higher. Worldwide, 182 million tonnes of wheat are held in stock – 8.3% higher than the previous year’s stock. But non-availability of this stock in the world market will create a shortage of wheat.

• India’s basmati rice export is expected to cross two million metric tonnes in the current marketing year, ending September 30. Riding on the huge demand from Iran and the inclusion of PUSA-1121 in the premium basmati rice category, exports have surged.

By all accounts, the price of gold should have gone up by now. All governments around the world have pumped in trillions of dollars to stabilise their economies which everybody suspects would lead to inflation and higher prices for gold. Besides, geopolitical factors are not all that favourable around the world from Iran to Pakistan to North Korea.  
But, contrary to an expected sharp rally in gold prices, the yellow metal has actually dropped 2% since February 2009 and is currently trading around $940. Everybody is hoping that it would touch $1,000. But will gold go down before that fooling everybody? If it breaks $900, gold can go all the way down to $800 in the short term. Gold has a history of being extremely volatile.
Why is gold not going up, despite and array of top investors forecasting that it would? This is simply because gold is seen as a hedge against inflation but there is no sign of inflation anywhere. The world’s largest economies are in a deflationary environment. Consumer price index (CPI) has dropped 1.3% in the last year through May – the largest fall in the past 59 years. Therefore, the $1,000 mark will remain insurmountable for a while.