Saturday, August 19, 2017

Steel consumption up 3.7% in July

Kolkata: India's steel consumption in July rose by 3.7 per cent to 6.905 million tonnes (mt) over corresponding month last year and exports in the last month grew by 64 per cent, the Steel Ministry's latest report said on Saturday.

"Overall consumption in July at 6.905 mt was down by 4.2 per cent over June 2017 but was up by 3.7 per cent over July 2016," the report of the ministry's Joint Plant Committee (JPC) said.

India's consumption of total finished steel at 27.911 mt saw a growth of 4.4 per cent in April-July period over same period of last year, under the influence of rising production for sale and imports.

Exports of total finished steel increased by 65.5 per cent to 2.807 mt in April-July 2017 over same period of last year and overall exports at 0.77 mt in July only was up by 19 per cent over the previous month but grew by 64 per cent over year-ago month.

However, import of total finished steel at 2.505 mt in the first four months of the current fiscal grew by 4.7 per cent over same period of last year.

"Overall imports in July 2017 at 0.798 mt was up by 24 per cent over June 2017 and was up by 42.2 per cent over July 2016," the report said.

India was a net importer of total finished steel in July 2017 and maintained its net exporter status in the first four months of the current fiscal.
India Steel Exports Imports 

India’s gem and jewellery exports slip 23.61% in July

In July 2017, India’s gem and jewellery exports dropped 23.61 percent to US$ 2.42 billion, from US$ 3.17 billion in the same month in 2016, reports say. Cut and polished diamonds exported reached a value of US$ 1.645 billion (US$ 1.651 billion in July 2016). Imports of cut and polished diamonds slipped 8.4 percent to US$ 227.9 million while in July 2016 they stood at US$ 248.88 million.
Rough diamond imports valued US$ 1.33 billion following a 6.1 percent dip (US$ 1.41 billion in July 2016). The said imports in July 2017 were 13.7 million carats or a 16 percent increase from 11.8 million carats imported in July ‘16.

Exports of coloured gemstone rose to US$ 12.1 million (US$ 10.38 million in the comparative month of 2016).

Gold jewellery (both studded and plain), exports witnessed almost a 32 percent drop to US$ 411.37 million from US$ 602.04 million in the previous year. Gold medallions and coins exported in July 2017 slipped from US$ 435.9 million in July 2016, to US$ 58.7 million in July this year. Silver jewellery exports also dropped from US$ 336.41 in July 2016 to US$ 185.93 million in July 2017, reports suggest.
India’s gem and jewellery exports

Wednesday, August 16, 2017

India bans exports of gold products above 22 carats

(Reuters) - India has banned the export of gold products with a purity above 22 carats in a move a trade group said was a bid to curb a practice known as "round tripping".

The Directorate General of Foreign Trade issued a notification dated Aug. 14 that stated exports of jewellery or medallions, containing gold of 8 carats and above up to a maximum limit of 22 carats shall only be permitted, without giving a reason.

"Round tripping to Dubai will come down due to the move," an official with India Bullion and Jewellers Association Ltd said. A trader, via round tripping, can import gold products at a lower import tax and re-export the same stock without any value addition.
The ban affects jewellery, including partly processed jewellery, coins and medals.

"Until now, traders only had to pay a lower import tax – or no tax at all – on gold jewellery and gold coins so long as they re-exported the gold," Commerzbank analyst Carsten Fritsch said in a note.

"This may also be an attempt by the authorities to prevent the current account deficit from widening again after Indian gold imports rose sharply in recent months."

India's gold imports in July nearly doubled from last year to $2.1 billion, while the country's trade deficit narrowed to $11.45 billion in July from a month ago, following a slowdown in merchandise imports.
Exports of Gold Products

India is the world's No. 2 consumer of gold behind China, with many saving their money in gold, using it to hedge against inflation and for gifts at special occasions. The country imports about 800 tonnes of gold a year.

Spot gold fell on Wednesday for the third straight day as the dollar edged higher on the back of robust U.S. economic data and an easing in tensions over North Korea.

Tuesday, August 15, 2017

Gold imports jump over two-fold to $13.35 billion in April-July

New Delhi: India’s gold imports more than doubled to $13.35 billion during the April-July period of the current fiscal, according to the data of the commerce ministry.

Gold imports, which has bearing on the country’s current account deficit (CAD), stood at $4.97 billion in April-July 2016-17.

In July this year, imports of the precious metal rose to $2.10 billion from $1.07 billion in the same month of the previous year.

Surge in gold imports in July contributed to the widening of trade deficit to $11.44 billion as against $7.76 billion in July 2016.

The rise in imports assumes significance as India is recording surge in the inbound shipments of the precious metal from South Korea, with which India has implemented a free trade agreement since 2010.

Officials have stated that the government is contemplating steps to check the surge in imports from that country.

Gold imports from South Korea has jumped to $338.6 million during 1 July – 3 August this year. The import in 2016-17 stood at $470.46 million.

Under the free trade pact between India and South Korea, basic customs duty on gold was eliminated.

Further, the 12.5% countervailing duty on gold imports has been subsumed in the Goods and Services Tax (GST). Accordingly, imports now attract only 3% integrated GST.

Under the FTA with South Korea, the government has recently notified rules for investigation of safeguard duties.

Countries impose this duty to discourage imports of a product. India is the world’s second biggest gold consumer after China.

The imports mainly take care of demand by the jewellery industry. At present, gold import attracts 10% duty.

The gems and jewellery industry along with the commerce ministry have time and again urged the finance ministry to consider a cut in the import duty.

India's trade deficit narrows to $11.45 billion in July

NEW DELHI: India's export grew by 3.94 per cent on a yearly basis to USD 22.54 billion in July on account of rise in shipments of petroleum, chemicals and marine products, official data released today showed.

Import too rose by 15.42 per cent to USD 34 billion in July from USD 29.45 billion in the year-ago month due to rise in inward shipments of crude oil and gold.

A rise in gold import shot up the country's trade deficit to USD 11.44 billion in the month under review from USD 7.76 billion in July 2016, the data released by the commerce ministry showed.

Gold import increased by 95 per cent to USD 2.10 billion in July against USD 1.07 billion in the same month last year.

Oil import was valued at USD 7.84 billion in July, an increase of 15 per cent over the same month in 2016.

Cumulative export during April-July of 2017-18 rose by 8.91 per cent to USD 94.75 billion while import increased by 28.30 per cent to USD 146.25 billion, leaving a trade deficit of USD 51.5 billion. 

Indian import for Iraqi oil increased in July

BAGHDAD: Oil import from Iraq has risen to 31.5% for India in July from a month ago, shipping data showed, allowing the country to retain the top supplier spot for the fourth consecutive month amid declines from sellers such as Venezuela and Iran.
According to ship tracking data, India took 954,400 barrels per day (bpd) of Iraqi oil in July compared with 725,800 bpd in June.
India’s July imports from Iraq are also nearly 50 percent higher than volumes imported in the same month last year, the data showed.
The spike in Iraqi imports comes amid a slump in Venezuelan crude shipments, which fell 31.1 percent from June to 337,100 bpd in July. Venezuelan crude exports have declined as it struggles to secure the light oil needed to dilute its heavy crude grades for export.

Sunday, August 13, 2017

Food Minister Ram Vilas Paswan seeks curbs on onion export to keep prices in control

Union Food Minister Ram Vilas Paswan said that he has asked Commerce Ministry to withdraw the incentive and impose higher minimum export price (MEP) on onion export to ensure adequate availability in the domestic market, which will help keeping prices in control.

"Commerce Ministry has been requested to withdraw the incentive on export of onion for adequate availability of onion for domestic consumption (It) has been requested for imposition of MEP of USD 450/ MT on onion in order to keep the prices of onion under control," he said in a tweet on Friday.

Poduction of onion this year is about 215 lakh tonnes while it was 209 lakh tonnes last year, said Paswan, while blaming hoarders and middlemen for the hike in the price of onion.

Japan’s shrimp imports continue recovery in H1

TOKYO: Japan’s imports of shrimp continued to recover in the first half of 2017, while Vietnam overtook Indonesia to become the country’s biggest supplier.
According to Japanese customs data provided by International Trade Center (ITC), Japan’s imports of shrimp between January and June amounted to 62,637 metric tons, up 6.2% compared with the corresponding period in 2016.
This follows on from an increase in imports in 2016, after Japan’s shrimp imports declined every year between 2012 and 2015.
Owing to higher shrimp prices, the value of Japan’s shrimp imports increased above the volume increase — up 12.1% year-on-year to JPY 75.8 billion ($691.2 million) during the Jan-June period, according to ITC.
Vietnam surged ahead to become Japan’s largest origin of shrimp imports during the period. From the southeast Asian country Japan imported 15,983t of shrimp, up 30.9% year-on-year. The value of Japan’s imports from Vietnam increased 44.3% y-o-y to JPY 22.0bn.
Japan’s imports from second largest origin Indonesia, however, were down 6.6% y-o-y to 11,473t, while imports from third largest origin India were down 12.8% y-o-y to 10,004t.
From fourth-largest origin Thailand Japan imported 6,266t, up 16.1% y-o-y. From fifth-largest origin Argentina — which in recent years has seen its cold-water shrimp exports surge — Japan imported 5,281t, flat at -0.8% y-o-y.
Japan is an important prize for shrimp-producing countries; it is the world’s third largest importer of shrimp after the US and Spain and second largest by value.
Typically, Japan imports more shrimp in the second half of the year. In H2 of 2016, for instance, Japan imported 90,226t of shrimp, an increase of 53.0% compared to H1 2016.
During the second half of 2016, Japan imported much more shrimp from India than both Vietnam and Indonesia, at 22,460t.
Should Japan’s imports increase by a similar amount over H1 of this year, the country would import around 95,800t from July-December, and 158,500t of shrimp over the full year of 2017.

India’s gold imports to rebound in 2017 on restocking, good monsoon

India's gold imports are likely to jump by a third in 2017 to 750 tonnes on restocking by jewellers and as good monsoon rainfall is expected to boost demand in rural areas during the upcoming festive season, a leading refiner told Reuters.

Higher imports by the world's second biggest consumer will support global prices, which are trading near their highest level in two months, but could widen the country's trade deficit. “Demand and imports are normalising after taking a hit last year. Jewellers are restocking after destocking last year,” said Rajesh Khosla, managing director of MMTC-PAMP India, the country's biggest refinery.

India, whose gold consumption is rivalled only by China's, imported 557.7 tonnes of gold in 2016, the lowest in 13 years, according to the World Gold Council (WGC).

In the first seven months of the 2017, imports more than doubled to 550 tonnes from the same period a year earlier, according to provisional data from consultancy GFMS. But import growth would taper off in coming months as jewellers had restocked earlier than usual this year, fearing higher taxes, Khosla said on the sidelines of the International Gold Convention in Panaji, capital of India's western resort state of Goa.

As part of a new nationwide sales tax regime that kicked in on July 1, the goods and services tax on gold jumped to 3 percent from 1.2 percent previously. “Jewellery demand has improved this year but investment demand is still weak due to a rally in the stock market and the appreciating rupee,” said Prithviraj Kothari, managing director of RiddiSiddhi Bullions.

The rupee has risen nearly 6 percent so far in 2017 and is trading near its highest level in more than two years.

“Monsoon rainfall is normal this year. This will boost rural demand during the festivals,” said a Singapore-based official with a leading gold supplying bank to India.

Two-thirds of India's gold demand comes from rural areas, where jewellery is a traditional store of wealth.

The quarter ending in December typically accounts for about a third of India's gold sales since it includes the start of the wedding season and festivals such as Dhanteras and Diwali, when buying gold is considered auspicious.

Exports need to grow at 26.5 % annually for India to grab 5% share of the world trade

Exports need to grow at 26.5 per cent annually for the next five years for India to reach a “respectable’’ 5 per cent share in world trade from the existing 1.7 per cent it has been stuck at since 2011, according to the second part of the Economic Survey for 2016-17.

This could be achieved only through reforms in trade policy by diversifying exports, rationalising tariffs and developing world class export infrastructure, it added.

Making a case for lowering average applied tariffs, the Survey stated that there is scope for reduction by selectively bringing down tariffs across many lines, while retaining higher tariffs for sensitive and important items.

On a bold note, it further proposed that bound tariffs (ceilings) committed to at the World Trade Organisation could be reduced which can help India to take a more pro-active role in multilateral and bilateral negotiations.

India’s negotiating team at the WTO, at present, is focussed on getting a fair deal in the area of agriculture subsidies and protecting sensitive items against import surges and has not shown any interest in negotiating tariff reduction.

Trade policy
Highlighting the importance of the forthcoming review of the country’s Foreign Trade Policy next month, the Survey said that the review exercise is particularly important in the light of recent international developments and special efforts are needed to not only review but accelerate India’s exports.

India’s exports grew 4.7 per cent in 2016-17 after two years of continuous decline.

In a suggestion that the exporters might not treat with enthusiasm, the Survey proposed that some export promotion schemes could be phased out if tariffs are reduced to realised or near realised levels, while others could be streamlined as many duties have been subsumed under GST.

The duty drawback rates (refunds given to exports in lieu of input duties paid) can also be revised downwards and the revenue saved could be used for export marketing efforts.

To increase exports, the Survey made a case for a demand based export basket diversification rather than a mere supply based strategy. It also stressed that world class export infrastructure and logistics, especially port-related, need to be developed on a war-footing.

For greater States’ participation in exports, devolution of funds to States need to be linked with their export effort, it suggested.

Green shoots
On a positive note, the Survey said that some green shoots have started to appear on the trade horizon with world trade growth projected at 3.8 per cent and 3.9 per cent in 2017 and 2018, India’s exports continuing to be in positive territory for the fourth consecutive month in May and in double digits in April-May 2017. All external sector indicators like reserves cover for imports, external debt to GDP ratio, foreign exchange reserve cover for external debt and debt servicing ratio, too, are in the comfort zone.

It, however, cautioned that rising trade deficits on the domestic front and rising protectionist tendencies on the global front are things to watch in the short term.
On currency fluctuation, the Survey pointed out that while the rupee has been one of the most stable currencies among EMEs, the appreciation of the real effective exchange rate (REER) indicates that India’s exports have become slightly less competitive.

Lauding the government’s move to bring FDI in most sectors under automatic approval route, except a small negative list, the Survey said that it resulted in FDI equity inflow of $43.4 billion in 2016-17, which is not only an increase of 8 per cent over the previous year, but also the highest ever equity inflow.

India raises vegetable oil import taxes to protect farmers

NEW DELHI (Reuters) - India, the world's biggest buyer of vegetable oils, has raised import taxes on crude and refined edible oils to protect local oilseed farmers from cheaper imports from top suppliers Malaysia and Indonesia.
The increases were shown in an order uploaded on a government website late on Friday.
New Delhi doubled the import tax on crude palm oils to 15 percent and raised the import tax on refined palm oils to 25 percent, increasing the differential in duty by 10 percentage points to encourage local processing.
The government also raised the import tax on crude soyoil to 17.5 percent from 12.5 percent previously."The decision will help both farmers and the local crushing industry which had to bear the brunt of higher oilseed stocks, lower domestic prices and surging supplies from major producers," said Sandeep Bajoria, chief executive of the Sunvin group, a leading vegetable oil importer. "We welcome the move."
Reuters reported on Tuesday that the government was considering raising import taxes on vegetable oils, the country's third biggest imported commodity after crude and gold.
New Delhi spends about $10 billion a year to import palm oil from Malaysia and Indonesia and relatively smaller quantities of soyoil from Brazil and Argentina.
Large inventories and lower prices have fomented a wave of protests by farmers in the big agrarian states of Maharashtra and Madhya Pradesh, ruled by Prime Minister Narendra Modi's Bharatiya Janata Party.
Nearly two-thirds of India's 1.3 billion people depend on agriculture to scrape a living.
India veg oil imports

Saturday, August 12, 2017

Exports will get 5 per cent of global pie with special efforts: Economic Survey

NEW DELHI: Rationalising tariffs, phasing out some export promotion schemes and having “useful” free trade agreements with some major countries will help India gain a “respectable share” in world exports, the second volume of the Economic Survey released on Friday said.

India's rising trade deficit and protectionist tendencies on the global front are areas to watch for in the short term, it said as India’s share in global exports has stagnated at 1.7 % from 2011 to 2016 with intermittent drops to 1.6%.

Citing rising protectionism, trade restrictive measures and risk of a backlash against movement of persons adding to a situation that is of growing concern, the survey said special efforts are needed to take India’s exports to a respectable share of at least 5% in world exports from 1.7% in 2016, which is very low compared to China’s 13.2%.

Streamlining export promotion schemes as many duties have been subsumed under GST, demand-based export basket diversification rather than a mere supply-based strategy and developing world-class export infrastructure and logistics on a war footing, are some recommendations of chief economic advisor Arvind Subramanian-authored survey.

It also said the focus should be on increasing FDI-linked and value-added exports, particularly high-tech exports as in China and some Asean countries.
Referring to the rise of anti-globalisation sentiment in recent years, the survey said such tendencies have surfaced with developments in the US during and after elections and the Brexit referendum.
People are viewing trade, immigration and multilateral engagements with some amount of scepticism and becoming wary of benefits of globalisation, it said. On trade curbs, the survey said there has been a rise in recent years of such steps including several types of non-tariff barriers.

The survey did contain some cheer for the export sector, saying that green shoots have started to appear on the trade horizon with world trade growth projected at 3.8% and 3.9% in 2017 and 2018, respectively, and India’s trade growth also picking up.
“With the green shoots slowly becoming visible in merchandise trade, and robust capital flows, the external position appears robust, reflected inter alia in rising reserves and a strengthening exchange rate," the Economic Survey said.
Reflecting the slowly improving world economic situation, India’s exports turned positive at 12.3% in FY17 after an interval of two years.

Reflecting the slowly improving world economic situation, India’s exports turned positive at 12.3% in FY17 after an interval of two years.
In FY17, services exports recorded growth of 5.7% with a pickup in some major sectors such as transportation, business services and financial services along with good growth in travel. However, as per the survey, software services exports, accounting for around 45.2% of total services, declined marginally by 0.7%.

India Steel Exports Double

India’s steel exports doubled to 8.2 million tons and imports slashed by about one-third in 2016-17 on account of a slew of steps to safeguard domestic steel sector from onslaught of cheap imports especially from China, the Economic Survey said Friday, PTI reported.

The rise in exports of steel may also wipe away the excess capacity built up in the steel sector. “These steps (to safeguard industry) taken by the government have borne fruit. During 2016-17 imports of steel have declined, while exports of steel have doubled,” the mid- term survey said.

Alloy imports dipped by 36.6% to 7.4 MT in 2016- 17 as against 11.7 MT in the previous fiscal while exports doubled to 8.2 MT last fiscal over 4.1 MT in the corresponding year. “It is interesting to note that Indian exports of steel have been growing amidst a stable exchange rate of the rupee.

The rise in exports of steel may also wipe away the excess capacity built up in the steel sector,” the survey said.

Thursday, August 10, 2017

Rupee appreciation may take imports from China to over $61 billion

New Delhi: The rupee has appreciated significantly against the dollar and the Chinese Renminbi since February and if the trend continues, imports from China may cross USD 61.30 billion, a level attained during last fiscal, says a report.
The domestic currency has firmed up by close to 5.5 percent against the dollar since February on the back of a significant portfolio capital inflows of about USD 27.5 billion.
Moreover, the Indian currency has appreciated by 3.7 percent against the Chinese Renminbi since February, resulting in surge in cheaper imports from China.
According to SBI's research report Ecowrap, appreciation of the rupee against the Renminbi has enabled Indian importers to purchase larger quantity of goods at lower prices and if the firming trend continues, it will make goods from China even cheaper.
"If this trend of rupee appreciation continues, thereby making goods from China cheaper, our imports from China could very well exceed the level of USD 61.30 billion attained in 2016-17," the report noted adding that it can adversely impact the production of domestic industries.
The report further said with trade deficit with China constituting 48 percent of the overall trade deficit in 2016 -17, this is indeed a matter of serious concern for policy makers.
India runs a trade deficit with China which has increased significantly over the years. Trade deficit has risen to USD 51.1 billion in 2016-17 compared to USD 19.26 billion in 2009 -10.
Exports to China are more or less at the same level while imports have doubled during the same period.
"This calls for some policies which support and encourage domestic industries so that they can grow, generate income and employment and reduce dependence on such frivolous imports thereby making the dream of 'Make in India' successful," the report noted.
India majorly imports electronic goods, engineering goods and chemicals from China.
"While rupee appreciation does have positive consequences in terms of lower imported inflation, in times of lower oil prices, we could perhaps live with a little bit of rupee depreciation !," the report said.

India to unveil new biofuel policy to cut oil, gas, coal imports

India’s top three state-owned oil companies have pledged a combined $2 billion to carry out research to develop biofuel technologies and the government has pledged to guarantee a return on their investments.
India will soon announce a new policy to promote biofuels as part of efforts by the world’s third-largest emitter of greenhouse gases to cut imports of fossil fuels like oil, gas and coal, a government minister said on Thursday.
The government aims to develop a biofuel economy worth 1 trillion rupees ($15.6 billion) in the next two years, oil minister Dharmendra Pradhan told a conference on renewable energy on Thursday.
India’s top three state-owned oil companies have pledged a combined $2 billion to carry out research to develop biofuel technologies and the government has pledged to guarantee a return on their investments, Pradhan said.
“The roadmap to lower crude oil imports is connected to biofuel,” Pradhan said. India, the world’s third-biggest oil consumer, aims to cut its crude imports by 10% by 2022.
New Delhi also plans to lower its carbon footprint by raising the use of natural gas in its energy mix to 15% in the next three to four years, up from 6.5% currently.The government has already asked state oil companies to set up ethanol plants at 12 locations over the coming year.
Energy consumption in India is expected to grow as the government aims for economic growth of 8-9 percent this fiscal year through March 2018, against around 7% in 2016/17.
Indian Oil Corp, the country’s top refiner, plans to enhance the capacity of its biofuel refineries to 100 tonnes a day from about 12 tonnes a day in the next two years, chairman Sanjiv Singh told reporters at the conference.
IOC runs three biofuel plants with an investment of about 30 billion rupees and is looking to increase the number of such plants, Singh said.
India needs private investment in the sector and once the cost of production comes down, the country could see some private sector participation, Singh said.
Separately, transport minister Nitin Gadkari said Prime Minister Narendra Modi’s cabinet could soon consider allowing the use of alternative fuel methanol in shipping.

Gold imports more than doubled in July ahead of GST implementation

Gold imports by India are said to have risen in July on arrival of some delayed shipments booked ahead of the implementation of a new national goods and services tax on the first of last month, according to a person familiar with the information.
Inbound purchases rose to 53.4 metric tons last month from 22 tons a year earlier, said the person, who didn’t wish to be identified because the data isn’t public. Sequentially, imports of the metal fell from 72 tons in June. Total imports during January to July jumped more than 2 1/2 times to 625.5 tons, according to data compiled by Bloomberg. Finance Ministry spokesman DS Malik declined to comment on the data.

While traders and dealers stocked up on gold inventories ahead of the levy of the national goods and services tax on fears of a higher duty, demand is expected to slow in the second half of 2017 as buyers take time to transition to the new regime, the World Gold Council said last week. Consumption is estimated to remain below a five-average of 850 tons and be in the range of 650 tons to 750 tons this year, it said.

“Such an increase in imports is not sustainable because the demand from the consumer side in the market is very slow and interest from the investment side has also dried up on low returns,” said Bachhraj Bamalwa, a director with the All India Gems & Jewellery Trade Federation, referring to the July jump.

Shipments from South Korea climbed in the month as importers took advantage of the lower goods and services tax rate and a free-trade agreement between the two nations, the person said. Imports from most other countries are taxed at 10 per cent versus zero for those from South Korea.

While this is the first time there has been a surge in imports from South Korea, importers have previously made use of free-trade treaties with countries such as Thailand and Indonesia in order to escape paying the import duty, said Bamalwa. This makes a strong case for the import tax to be lowered across the board, he said
Gold imports by India

Export of soybean meal increases by 235%

Export of soybean meal and its other value added products during July 2017 has been pegged at 0.98 lakh tons compared to 0.29 lakh tons in July 2016 showing an increase of 235 per cent over the same period of last year, according to a release issued by Soybean Processors Association of India (SOPA) on Tuesday.
On a financial year basis, the export during April’2017 to July’2017 is 4.69 lakh tons as compared to 1.19 lakh tons in the same period of previous year showing an increase of 292 per cent.
The release added that during current oil year, (October 2016 – September 2017), total exports during October 2016 to July 2017 is 16.46 lakh tons as against 3.48 lakh tons during the same period last year, showing an increase of 372.72 per cent.

Export of soybean meal

Gems & jewellery Q1 exports rise 4%

NEW DELHI: Gems and jewellery exports grew by about 4 per cent to USD 9.17 billion during the first quarter of the current fiscal, driven largely by demand in major markets like the US.

In the April-June quarter of last financial year, the sector's exports aggregated to USD 8.84 billion, according to the data from Gems and Jewellery Export Promotion Council (GJEPC).
The labour intensive sector contributes about 14 per cent to the country's overall exports.

The rise in shipments was mainly supported by exports of silver jewellery, and gold medallions and coins.
Silver jewellery exports increased to USD 1.71 billion during April-June 2017-18, from USD 958.65 million a year ago.

Similarly, shipments of gold medallions and coins registered a growth of about 42 per cent to USD 1.51 billion during the period under review.

Gold jewellery shipments recorded a meagre growth of 1.78 per cent during the first three months of the current financial year.
Exports of cut and polished diamonds, coloured gem stones and rough diamonds also reported positive growth.  
Gems and jewellery export
India's main export destinations include Europe, Japan, China and the US. According to the GJEPC data, imports of rough diamonds rose by 17 per cent to USD 5.4 billion in April-June 2017.
Imports of gold bars, however, dipped by about 57.43 per cent to USD 569.12 million.

Tuesday, August 8, 2017

Traders want import cap on moong, urad

Lentils traders in India have demanded that New Delhi extend to moong and urad the import restrictions that now apply to tur, seeking to ensure sufficiently remunerative prices for the two varieties of pulses.

Some traders believe that prices of urad and moong, already ruling much below the state-set levels, will further come under pressure if overseas supplies are allowed to continue.

The Commerce Ministry issued a notification on August 5, making changes in the import policy of tur (pigeon pea) by putting restriction of 2 lakh tonne in imports during a financial year.
The restrictions will apply until 2018. Although the trade still awaits clarification on transit cargo in the high seas and bound for Indian shores, it is also of the opinion that the move would protect local farmers.

"We welcome the decision of the government to restrict tur imports. This will help the farmers by supporting domestic prices," said Bimal Kothari, vice president, Indian Pulses and Grains Association (IPGA).

Almost all the tur that is produced in the world makes its way to India, which is the biggest consumer of tur dal. According to trade estimates, tur production in Africa is expected to be 6 lakh tonnes in 2017, while that in Myanmar about 2.5 lakh tonnes to 3 lakh tonnes.

Tur prices in Africa have plunged from $1,100 tonne in the previous year to about $335tonne at present. Traders have now demanded extension of import restrictions to other pulses and even to allow exports.

Moong and  Urad  Pulses exports imports

"However, the government should act well in time and extend the import restrictions to moong and urad, the harvest of which is just round the corner. As per official data, India is likely to harvest a bumper crop of both urad and moong," said Kothari.

The market rate of urad is about Rs 40/kg against MSP of Rs 54/kg, while market rate of moong is Rs 45/kg to Rs 50/kg against MSP of Rs 55.75/kg.

Despite government procurement, tur prices are still ruling at Rs 43/kg, much below the MSP of Rs 54.50/kg. Traders and millers have demanded timely action by the government for procurement operations of urad and moong. Chana is the only dal the prices of which are now above government support prices.

China's July exports, imports weaker than expected, cloud global outlook

BEIJING: China's exports and imports grew more slowly more than expected in July, raising concerns over whether global demand is starting to cool even as major Western central banks consider scaling back their massive stimulus programmes.

China and Europe have been driving an increasing share of global growth this year as political conflict stymies stimulus policies being pushed by U.S. President Donald Trump.
China's exports and imports

But China's export growth slowed to 7.2 percent in July from a year earlier, the weakest pace since February and cooling from an 11.3 percent rise in June, official data showed on Tuesday. Analysts had expected a 10.9 percent gain.

Imports rose 11.0 percent, the slowest growth since December and down from a 17.2 percent rise in the previous month. That also missed expectations of 16.6 percent growth.

That left the country with a trade surplus of $46.74 billion for the month, the highest since January, compared with forecasts for $46.08 billion and above June's $42.77 billion. The July trade figures are preliminary, with revised data due on July 23.

Asian stock markets went flat after the disappointing China data, which came a day after ratings agency Fitch upgraded its outlook for the world economy for this year and next, citing recoveries in China and other emerging markets.

"Despite an uptick at the end of the second quarter, (China's) trade growth now appears to be on a downward trend. In particular, the sharp decline in import growth since the start of the year suggests that domestic demand is softening," Capital Economics said in a note.

Improving global demand has boosted exports for China and other trade-reliant Asian economies in recent months after several lean years of declining shipments, but investors have been more focused on its strong appetite for imports, particularly for industrial commodities such as iron ore and coal, which have sparked a global price rally.

China's trade surplus with the United States, its largest export market, rose 5.9 percent in the first seven months of this year to $142.75 billion compared to the year-ago period, even as China's overall trade surplus has declined this year.

China's surplus with the U.S. was $25.2 billion in July, nearly unchanged from June's $25.4 billion, which was the highest since October 2015.

U.S. President Donald Trump is close to a decision on how to respond to what he considers China's unfair trade practices, as Washington prepares to launch an inquiry into Beijing's intellectual property and trade practices.

But America's appetite for Chinese goods appears to have only increased over the years.

The surplus with the U.S. accounted for over 60 percent of China's total surplus in the first half, compared to just 44 percent in the year-ago period, according to China customs data.

China has said that trade between China and the United States benefits both sides and that Beijing is willing to work with Washington to improve their trade relationship.

The United State and China failed last month to agree on major new steps to reduce the U.S. trade deficit with China, casting doubt over Trump's economic and security relations with Beijing.

Tensions between Washington and Beijing have escalated in recent months as Trump has pressed China to cut steel production to ease global oversupply and rein in North Korea's missile programme.

Trump tweeted in late July after the latest North Korea missile test that he was "very disappointed" in China and that Beijing profits from U.S. trade but had done "nothing" for the United States with regards to North Korea, something he would not allow to continue.

A China's vice commerce minister said last week that China's foreign trade faces a mostly positive environment in the second half of the year, but instability and uncertainties still exist.

Monday, August 7, 2017

Exporters expect further rise in rupee, cover positions

Indian exporters are rushing to buy effective hedges for their dollar receivables, anticipating that the Mint Street's policy stance on credit costs and robust economic growth prospects would enhance overseas fund flows and help strengthen the rupee .

The forward premium -a measure of the expected movement for the local currency in its pairing against the dollar -declined about 14 paise in the past two days to Rs 2.81 for the one-year maturity contract after the central bank reduced the benchmark policy rate by a quarter-percentage point Wednesday.

Forward premium is the spread or gap between the prevailing exchange rate and the higher level used in forward currency exchange deals.
"Exporters are selling in a big way after the RBI's interest rate cut," said Anindya Banerjee, analyst at Kotak Securities. "With the latest rupee rise, their gains from the forwards premium are now capped as they realise lesser value on their existing contracts." "Many exporters are rushing to book fresh forwards contracts to cover their future receivables," he said.

The rupee Thursday hit a fresh two-year high, closing at 63.68 a dollar, a tad stronger than a day earlier. During the day, it reached as high as 63.56. A stronger rupee coupled with falling forwards premium yield lower value realisation for exporters who book forwards contracts.

Similarly, a weaker rupee coupled with rising premium is good news for companies with offshore re ceivables.For instance, an exporter who booked one-year contract two days ago would have taken the exchange rate at about 67.06 (spot exchange rate plus premium) compared with 66.50 now. This means, an ex porter locking in forwards now have to fork out more dollars.

"Looking at the huge overseas inflows, exporters need to cover at least three-fourths of their confirmed receivables," said KN Dey, managing partner, United Financial Consultants, a Mumbai-based forex firm. "The rupee looks to be on a rising path. A further appreciation may hur t India's export competitiveness.

Whenever the interest rate differential between the US and India narrows, the (rupee-dollar) forwards pre mium dips."

Forward transactions in the forex market are either at a premium or a discount to the rupee's spot rate. Typically, the maturity dates of forward transactions are in the range of one month to a year. 

Malaysian export growth hits six-month low at 10%

KUALA LUMPUR: Malaysia runs into its slowest export growth in six months, 10% YoY in June, lower than last month’s 32.5%, according to a report.
The report said net exports climbed by 34.7% to 24.1 billion in Q2. This shows the country has sustained current account surplus and positive net export GDP contribution.
Export volumes rose 2.3% YoY, whilst import volumes declined 2.3%. Both export and import prices rose, but slower by 7.5% and 6.1% respectively.
Overall exports got support from growth of manufactured items at 7.4%, mining at 7.3%, and agriculture at 7.7%.
Sectors that grew include electrical electronics at 15.1%, chemicals at 4.5%, palm oil at 16%, liquefied natural gas at 97.3%.
Other sectors that grew were crude rubber, rubber products, transport equipment, and machinery and appliances.
There were declines in shipments for crude petroleum at 1%, refined petroleum products at 9.5%, manufactured metal at 13.3%, and optical and scientific equipment at 3.1%.
Exports by country also grew. Malaysian exports to China grew by 27.3%, Japan by 24.3%, India by 21.3%, and South Korea by 33.8%.
Exports to ASEAN countries grew by 1.9%, thanks to shipments to Singapore at 9.1%, Thailand at 2.5%, and the Philippines at 18.5%.

Rupee's rise can scupper manufacturing, export push, warns DBS

MUMBAI: Singaporean lender DBS today said it "suspects" that there has been a change in the stance by the authorities to let the rupee appreciate more, but warned that it can hurt manufacturing and exports.
The competitiveness-related worries can be mitigated by other factors, it added.

"As the rupee strengthens, one question is whether the authorities' stance towards the currency has changed. We suspect it has," the note, which comes amid a 6.8 per cent rise in the rupee this year, said.
It said that both domestic and global factors are resulting in the rupee rise, but pointed out the differences in the official response this time around.

In the past, a strong appreciation in the rupee used to result in a "talk-down" to contain the gains, which is absent now, with officials saying this reflects the economy's improving prospects and positive reforms.

"Gains are being perceived as a sign of strength rather than a challenge to competitiveness," it said, adding that chief economic advisor Arvind Subramanian is in a minority, which has been flagging risks of currency appreciation.

"A competitive currency would have added to the country's allure as a manufacturing destination. This is particularly crucial under the 'Make in India' umbrella," the report added.

The RBI, the note said, has been "more tolerant" of the rupee strength and has focused its interventions to minimise volatility, rather than defending a particular level. The rupee strength on real/nominal effective exchange basis is not seen as a constraining factor, it said.

Flagging the risks of the appreciation, it said a strong currency is a "threat" and it may hurt manufacturing and exports. "Service exports are more vulnerable, given the limited scope of imports-dependency. A strong rupee is negative for exports and poses a threat to IT exports, eating into profit margins."

The note said generally, the impact on exports shows with a lag of three to four quarters. In what can be a positive, it said, the import content of exports grew to 25 per cent in 2010-11 from under 10 per cent in the 1990s.

However, sectors like gems & jewellery with low import dependency and higher labour intensity are more sensitive to rupee movements.
It said there are positives from a stronger currency, like it being positive for inflation, citing RBI estimate that says a 5 per cent rupee rise leads to a 0.10-0.15 per cent decline in the headline inflation.

Imports will also be cheaper, which is a positive for consumers' purchasing power. On the factors that can mitigate, it said strength in global demand matters and additionally, commodity prices have also helped this year. "Factors that improve productivity and thus lower costs of manufacturing/ exports are also important - labour costs, logistical constraints, quality considerations, ease of doing business, tax systems and the regulatory environment," it said, adding work is happening on all these.

Giving its outlook, the note said the appreciation may

continue on the back of a weak dollar and domestic positives. It also warned that an inflows-driven rally in the currency also runs the risk of reversal should the risk sentiment weaken unexpectedly.

It can be noted that in 2013, the rupee was one of the worst performing currencies in the world following the 'taper tantrums' by the US Fed which led to massive outflows from the country and the rupee falling to a life-time low of Rs 68.85 to a dollar in August that year.

Sunday, August 6, 2017

Centre caps import of arhar to arrest falling prices

NEW DELHI: The government on Saturday put a cap on the import of arhar dal at 2 lakh tonnes during this fiscal in its bid to ensure that domestic price of the key lentil does not crash further. Farmers organisations have been demanding this since there is record production of arhar during this year. They have demanded the need to increase the import duty on edible oils, which government is likely to notify soon.In an order issued on Saturday evening, directorate general of foreign trade (DGFT) said the import of pigeon peas (arhar) has been "restricted". It said, "Import shall be subject to an annual (fiscal year) quota of 2 lakh metric tonne as per procedure to be notified. The restriction will not apply to government's import commitments under any bilateral/ regional agreement/ MoU."

India's arhar production increased 80% to 4.6 million tonnes in 2016-17.
The issue of private imports still happening came up at a recently inter-ministerial meeting under the chairmanship of finance minister. Road transport minister Nitin Gadkari had pointed out how import of arhar was happening even as Indian farmers are going for distress sale, though top officials had said that the import by private players was minuscule.
Even MPs from opposition parties had pointed to the ongoing import of arhar during the discussion on agrarian crisis in Rajya Sabha.
Pulses traders are expecting DGFT to come out with the procedure to implement the 2 lakh tonne import capping order on Monday. One of the major player said they expect some relief for the quantity of arhar which is in transit and for which the private parties have already entered into agreement.
India  exports pulses 

"What government should do is allow traders to export the pulses from our country. At present, traders who are into the business of importing are allowed to export as well," said Kamlesh Patel, director of Sainath International, a major trading firm in this sector.
While the restriction will help growers of pulses, who had pushed the cultivation this year, it is set to put pressure on countries like Myanmar, Tanzania, Mozambique and Malawi, which largely depend on India. India has been the biggest producer, consumer and importer of pulses, particularly arhar in the globe.

Friday, August 4, 2017

Column: China's coal imports soar as India's stumble

LAUNCESTON, Australia (Reuters) - China's imports of coal from the seaborne market surged again in July, providing a stark contrast to a fourth consecutive monthly decline for India.

It's possible that the market should be paying more attention to China's growing imports rather than India's downturn.

The different dynamics in the world's two largest importers of the polluting fuel are largely a reflection of juxtaposing domestic policies.

China is restricting domestic coal output and shutting inefficient mines, which, coupled with a decline in hydropower output, has boosted demand for imports.

India, which gave back the title of the world's top coal importer to China last year, has a stated policy of reducing coal imports to zero and is boosting domestic production and efficiency of distribution toward that end.

China's seaborne imports were 20.8 million tonnes in July, up sharply from 17.9 million in June, according to vessel-tracking and port data monitored by Thomson Reuters Supply Chain and Commodity Forecasts.

The July data may be slightly revised in coming days as cargoes that arrived in the last few days of the month are factored in, but this won't change the underlying message that China's imports are strong.

July will be the third month this year where seaborne imports have exceeded 20 million tonnes, taking the year-to-date total to 135.2 million tonnes, up 12 percent from the first seven months of 2016.

Looking at the breakdown of suppliers, and top exporter Australia has fared better than regional rival Indonesia, most likely because it is the major global shipper of coking coal used to make steel, while Indonesia concentrates on lower grade thermal coal.

China's imports from Australia were 8 million tonnes in July, taking the year-to-date total to 51.26 million, a gain of 15.3 percent over the same period in 2016.

Indonesia has supplied more to China, with 56.72 million tonnes in the first seven months, but this is only up 10.3 percent from the same period last year, or about two-thirds of Australia's increase.

While not a major supplier to China, it's worth noting that the United States has shipped 4.03 million tonnes in the January-July period, double the 1.96 million from the same period last year.

Lessons in tourism for India, from Indonesia

PUNE: There is a lot India can do to attract more tourists from Indonesia. Against 3,76,000 Indians travelling to Indonesia in 2016, India could manage to attract only 35,000 tourists from the south east Asian nation to India in the same year, data compiled by the Bureau of Immigration, India, stated.
This huge gap can be filled only if Indian authorities take up a more aggressive approach and start promoting India as a health and education hub to lure more tourists to their land, Saut Siringoringo, counsel general, Consulate General of The Republic of Indonesia, said.
"Indian travellers now rank fifthe among all sources of foreign tourist visitors to Bali," the Indonesian tourism ministry said in a compendium, titled `Indonesia country profile - Trade, Tourism & Investment opportunities'. High ranking officials representing the Indonesian tourism ministry are in India and are travelling to select cities to woo more Indian tourists, which is something Indian authorities should also indulge in.
The Indonesian authorities expect at least half a million Indian tourists travelling to their country this year.
"To achieve this goals, Indonesia will place emphasis on digital promotions, air connectivity and construction of 20,000 home stays in tourism villages across the archipelago," the ministry said.
"Of these 5 lakh potential arrivals, we expect to get at least 60% to come to Bali alone," said IGN Rai Suryawijaya, chairman of Badung tourism promotion board.
More and more Indians prefer going to Bali because it closely resembles India on culture and religious background. So, the officials are now out to promote "top 10 new destinations," dubbing them as "10 new Balis."
Even in terms of bilateral trade, data shows, India needs to do a lot more to bridge the huge trade deficit.
The Indo-Indonesian bilateral trade touched $12.96 billion in 2016, in which India imported about products worth $10.09 billion while managed to exports product worth $2.87 billion.
Here again, Indonesia has a piece of advice for India, when it says - "there is considerable potential for expanding trade in the areas of IT, pharmaceuticals and healthcare sectors, among others".

Wednesday, August 2, 2017

World Cotton output may rise 8% this season

World Cotton production is projected to increase by 8% to 24.9 million tons in 2017/18 season due entirely to an 8% expansion in world Cotton area to 31.7 million hectares, which is below the 20-year average of 32.7 million hectares, the International Cotton Advisory Committee (ICAC) said in its latest report.
The world average yield is forecast at 785 kg/ha.

India is expected to remain the world’s largest producer in 2017/18 with output increasing by 6% to 6.1 million tons. After falling by 6% in 2016/17, China’s production is projected to rebound by 7% to 5.2 million tons.

Production in the United States is expected to rise by 10% to 4.1 million tons as high prices, sufficient soil moisture in dryland areas and beneficial weather during planting encouraged farmers to expand Cotton area by 18% to 4.5 million hectares.
After two seasons of contraction, better expected returns for Cotton encouraged farmers to expand Cotton area in Pakistan by 9% to 2.7 million hectares.

Assuming the average yield rises by 8% to 717 kg/ha, Pakistan’s production is projected to increase by 17% to 2 million tons, which is similar to its 15-year average.

Cotton production in Brazil is forecast to increase by 5% to 1.6 million tons as high returns in 2016/17, resulting partially from a 17% increase in the average yield, are likely to encourage farmers to expand Cotton area.

Global Coffee exports up 5.7% in June

Global Coffee exports rose 5.7% in June 2017 from a year earlier to 10.437 million 60-kg bags from 9.877 million, data from International Coffee Organization (ICO) showed.
Exports in the first 9 months of Coffee year 2016-17 (Oct to Jun) have increased by 5.6% to 92.29 million bags compared to 87.37 million bags in the same period in the last coffee year.

In the twelve months ending June 2017, exports of Arabica totalled 75.76 million bags compared to 71.21 million bags last year; whereas Robusta exports amounted to 45.45 million bags compared to 43.91 million bags.
Coffee exports data

India exported 591000 60kg bags of Coffee in June, down 4.46% as compared to 620000 bags in the same month last year, according to ICO data.

IGST collection from imports rises about 60% in just one month of GST

NEW DELHI: The collection of Integrated Goods and Services Tax from imports crossed Rs 20,000 crore in July — the first month of the roll out of the new indirect tax regime, pointing towards a major jump in revenues. Total customs revenues in July 2017 stood at Rs 26,500 crore as against Rs 16,625 crore collected in July 2016.

Collections have been quite robust," a government official said. However, the official said IGST collections have also received a boost from the fact that there is a component of state GST as well in the tax.

Besides, the government has done away with a number of countervailing duty (CVD) exemptions and not extended them under the GST regime that were available in the previous tax regime, such as that on some electronic products.

The rise in customs revenues on imports should take care of any decline in GST collections because of any production-related disruption after the rollout of the new regime.

Overall GST trends would be available only in August when the final tax collection numbers for July are collated.

There is apprehensions that revenues may take a hit because of sluggish sales across the country in the first month of GST. Central Board of Excise and Customs would carry out a detailed analysis of the initial trends when the final numbers become available.

India rolled out GST, which replaces 17 central and state taxes such as central excise duty, service tax, value added tax and 23 cesses, from July 1.

IGST collections are first revenue trends on the new tax as also indication of the largely smooth rollout. IGST become payable from June 30 midnight on all goods entering the country, barring the exempted ones.

IGST on imports replaces countervailing duty and is levied in lieu of state GST and Central GST, but over and above basic customs duty. IGST is equal to the sum of Central GST and State GST levied on any product in the country. GST has subsumed countervailing duty, which was levied in lieu of central excise duty, and special additional duty on imports.