Tea, Guar Seeds and Foodgrains

· Lack of selling and ample buying pushed ICE Futures US cotton to a nine-month high, amid rallying commodities and a falling US dollar. One of the key reasons is late monsoon rains, in the world’s second largest cotton producer, India.  

· Scanty rainfalls were also responsible for a sharp rise in the Indian guar futures. Guar is mostly grown in north-western India, where the rainfall has been particularly poor. Guar acreage in Rajasthan, the country’s top producer, is down 74%. Rajasthan accounts for about 80% of India’s guar acreage.
 
· The silver lining is that the government has raised its 2008-09 food grain output estimates by four million tonnes to a high at 233.88 million tonnes, thanks to a record production of wheat, rice, maize and gram.
 
· India has recorded a 10% drop in tea production between January and May this year, according to Indian Tea Association. Production during the period stood at 215.8 million kg, compared with 240.2 million kg in the same period last year, a decrease of 24.4 million kg. The peak period between June and October would be crucial.
Like this story? Get our top stories by email.

User

Crude Oil

Oil prices, which had started recovering after dropping to a low of $30/barrel, are slipping again. Crude oil is trading below $60/barrel after touching a high of $70 in the recent past. Oil prices seem to have dropped because a rise of the dollar against the euro has limited investors’ need to use commodities as an inflation hedge. The US currency rose to its strongest against the euro since May 21 this year. Another reason for the decline in oil prices was the release of numbers indicating a contraction in manufacturing in the New York region for the 14th month. The poor performance of the equity markets globally was another factor. Data released by the US Government suggests that the fall in the crude prices was triggered by a more than expected increase in distillate and gasoline inventories. Although crude oil inventories have declined, inventories of heating oil and diesel fuel have hit a 25-year high. There was further pressure on prices after news from OPEC suggested that consumption would not reach 31 million barrels per day until 2013 – that was the average of 2008 before the economic crisis led to a cut in oil usage. OPEC expects global demand to touch 84.2 million barrels per day against 85.6 million barrels last year. OPEC is not alone in its bearishness about demand for crude oil in 2009 – the International Energy Agency (IEA) has also predicted a 2.9% decline in 2009 demand. The IEA expects demand for oil to rise as developing economies recover, but it also maintains that demand is unlikely to rise until 2010.

Like this story? Get our top stories by email.

User

OIlmeal, Wheat and Paddy

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.
 

Like this story? Get our top stories by email.

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

online financial advisory
Pathbreakers
Pathbreakers 1 & Pathbreakers 2 contain deep insights, unknown facts and captivating events in the life of 51 top achievers, in their own words.
online financia advisory
The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Online Magazine
Fiercely independent and pro-consumer information on personal finance
financial magazines online
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
financial magazines in india
MAS: Complete Online Financial Advisory
(Includes Moneylife Online Magazine)