India Cotton exports seen down

India's Cotton exports is expected to decline mainly due to an appreciating INR which dented the competitiveness of the Indian fiber in the world market.

India's forward Cotton exports for November-January have plunged over the previous year as traders are waiting for daily arrivals to go up, which may put prices under pressure and bring export parity.

Indian traders have not signed new cotton export contracts in the past one week as domestic prices may take a little longer to decline to get export parity.

Cotton market sentiment has moved up ever since India's top Cotton producing state Gujarat has announced a bonus to cotton farmers above the Minimum Support Price (MSP), which has prevented prices from moving down.

Indian millers consume about 1 lakh cotton bales (each 170 kg) a day. Once cotton arrivals reach 1.5-2 lakh bales a day, prices could come under pressure.

Most millers entered into forwarding contracts at lower than Rs 38,000 a candy, while current prices are ruling at Rs 38,500 a candy (365 kg). Though there is a short-term lull in exports, traders are confident it would gather pace again.

Bangladesh, China, Pakistan, and Vietnam are the major buyers of Indian cotton.

Illegal pepper imports rob the flavour off India’s spices trade

KOCHI, OCTOBER 25: 
Import of arecanut, pepper and other commodities under false declaration of origin into India has of late become rampant, according to trade sources and farmers.

Pepper from Vietnam and areca nuts from Indonesia are landing at different ports in India as Sri Lankan produce, claiming import duty concessions extended to the neighbours and depriving India of its huge revenue.

Recently, 220 tonnes of black pepper and betel nuts worth ₹12 crore were reportedly seized by the Directorate of Revenue Intelligence at Nhava Sheva Port, Mundra Port and godowns in Mumbai and Ahmedabad.

These commodities were sent to India as Sri Lankan produce even though they were of Vietnamese and Indonesian origin.

Arecanuts do not attract any import duty if arriving from Sri Lanka, while black pepper attracts only 8 percent duty. Indonesian betelnuts attract 100 per cent import duty, while 54 percent duty is levied on pepper from Vietnam.

Even when Vietnam pepper is imported via Sri Lanka at a value of $6,000 per tonne for the purpose of levying 8 per cent duty, the Indian government is losing around $2,700 a tonne, the trade alleged.

The trade community here told BusinessLine, citing DRI sources, that consignments of betelnuts and black pepper were first imported to Sri Lanka from Indonesia and Vietnam, respectively, and then re-exported to India by declaring them as being of Sri Lankan origin.

For issuance of a certificate of origin, the Sri Lankan agencies charge $1,000 per tonne on Vietnam pepper, they said, adding, dummy importer-exporter codes in different names were also used. High prices
Increasing demand in India without corresponding growth in production has kept pepper prices at high levels. As against the demand of an estimated 60,000 tonnes, India’s output hovers at around 50,000 tonnes.

The short supply coupled with higher prices have lured Indian importers to follow illegal routes to bring the commodity into the country to reap windfall profits. Vietnam, which had not exported much pepper in 2016 is reported to have shipped out a substantial volume this year and that, according to the Indian trade, has been channelled to Indian markets.

Sri Lanka imported 3,200 tonnes of pepper from Vietnam in January-August 2017 as against 440 tonnes in 2016. Similarly, Nepal, which had imported only 30 tonnes in 2016, reported inflows of 550 tonnes till August this year. As against 114 tonnes in 2016, Myanmar has imported 1,300 tonnes.

Thus, the domestic market is flooded with imported pepper depriving farmers of remunerative prices, Kishor Shamji, an exporter, told BusinessLine.

Traders and growers, he said, have urged the Union government to fix $8,000/tonne as import duty on pepper arriving via Sri Lanka.

Container segment to drive growth at Indian Ports:CARE Ratings

NEW DELHI: Container segment is expected to fuel the next stage of growth at Indian ports. Major Ports in the Country are already ramping up container handling capacity despite sluggish global container and freight movement in the past two years.

A report by Care Ratings has pegged the cargo container handling of ports in the Country to reach 25 million TEUs (Twenty Tonne equivalent units) by 2020-21 from the current 13 million TEUs. Non-Major Ports are set to add higher capacities in this segment.

"We expect the same (global container movement) to recover globally over the next 2-3 years. We also expect a pick-up in containerisation of a wider variety of cargo in India, since handling and transportation become faster and easier," the report stated.

With the Sagarmala programme aiming to increase the depth of Major Ports so as to cut time on trans-shipping of goods, the ports would be able to handle new generation mega vessels over the next two to three years.

Presently, petroleum and its products account for 25-30 percent of the import-export volume of the Country. The Government intends to double the petroleum refining capacity to meet the domestic demand and also augment exports. Current refining capacity stands at 230 million tonnes per annum (mtpa). The increased refining capacity is expected to cater to regional demand especially petroleum exports to Countries like Bhutan, Nepal, Myanmar, Bangladesh and Sri Lanka. Petroleum, oil and lubricant (POL) segment is poised to be the major growth segment for the overall growth of cargo capacity handled by ports.

Capacity utilization of six Major Ports on the Eastern Coast was 56.2 percent in 2016-17, a slide of 3.4 percent compared with FY17. Similarly, Major Ports on the Western Coast reported capacity utilisation of 65.9 percent in last fiscal, a slump of 3.3 percent.

"During 2016-17, Major Ports implemented 100 million tonnes of capacity addition. We expect the capacity utilization to remain stable during the current year. Fall in the import of commodities like coal would be compensated by the increased export of iron ore, zinc and steel", the report noted.

During the past three years, technology improvements such as new container terminal projects at JNPT, Kamrajar Port in Tamil Nadu, new cargo terminals, improving rail connectivity and implementation of RFID (Radio Frequency Identification) system across ports has helped improve the efficiency and handling capacity.

Major Ports continued to witness growth in operating surplus backed by the steady increase in operating margins. The 12 Major Ports posted a combined net surplus of Rs 2820 crore in 2016-17 on the income of Rs 11,894.5 crore from handling 647.6 million tonnes of cargo.

Government plans to set rules for food exports packaging

NEW DELHI: The government is working towards new packaging norms for export of food items to address concerns over food safety and health standards even as some Indian food products face rejection in developed markets.

The ministry of commerce and industry has constituted a standing committee to formulate packaging standards for export of 500 products including fresh fruits and vegetables, spices, tea, and coffee.
The regulations will be in sync with those of developed markets such as the US, Vietnam, the European Union, and Japan, said an official from the ministry.

“A large amount of contamination can happen during transit if the packaging is not done properly,” said the official. “The government is keen to promote exports of fresh and processed food products and is hoping that these regulations will help in increased business for exporters,” the person said on condition of anonymity.
The standing committee is also mandated to help introduce a degree course in packaging as an initiative to increase awareness about the matter. The committee will also engage in research of innovative materials for packaging of different products.
The committee has representation from Indian Institute of Packaging (IIP), Agricultural and Processed Food Products Export Development Authority (APEDA), several research institutes and industry associations such as Tea Board of India and Coffee Board of India. “We have already suggested standards for packaging fresh fruits and vegetables and submitted it to the ministry and are working on packaging for spices and tea,” said NC Saha, director of Indian Institute of Packaging and a member secretary of the standing committee.
The institute is organising three events — International Summit for Packaging Industry, Indiapack Pacprocess exhibition and Pacmachine Awards — to spread awareness about the importance of packaging. The development comes even as some Indian food products continue to be rejected by some western markets.
The US Food and Drug Administration (FDA) has on several occasions refused entry to Indian food items such as spices, basmati rice, fisheries and herbal products.
Russia had also imposed ban on import of rice and peanuts from India on grounds of contamination. Australia had issued an advisory that Indian exporters involved in the exports of processed food products, especially containing milk, have not been following the relevant regulation of imports into Australia, after detection of cases violating the import regulations.

Bangladesh signs gasoil import deal with India

DHAKA (Reuters) - Bangladesh on Sunday signed a long-term sales and purchase agreement with an Indian refiner to import gasoil to meet the country’s energy demand, officials said.

The deal between Bangladesh Petroleum Corp (BPC) and Numaligarh Refinery Limited (NRL) was signed in presence of India’s External Affairs Minister Sushma Swaraj, who arrived in Dhaka on Sunday on a two-day visit to discuss bilateral issues.
Her visit comes as Bangladesh is struggling to cope with an influx of almost 600,000 Rohingya Muslim refugees from Myanmar since Aug. 25 when the U.N. says the Myanmar army began a campaign of “ethnic cleansing” following insurgent attacks.

The deal with NRL, which is majority owned by refiner Bharat Petroleum Corp Ltd (BPCL), is the country’s first long-term agreement with any Indian supplier.

Under the deal, BPC will take up to 250,000 tonnes of gasoil each year from NRL for the first three years of the deal to the BPC’s northern fuel depot via a 131-km (79 mile) pipeline, which will be built by India.

The import volume will be increased in line with demand, a senior BPC official said, adding the deal would come into effect when the pipeline is built.

BPC will pay a premium of $5.50 per barrel over Middle East quotes under the 15-year deal, up from the current premiums of $2.20 a barrel for gasoil cargoes it receives by tanker through the country’s southeastern port of Chittagong, the official said.

gasoil export import

“The premium is cost-effective as there is no added cost as the supply will be delivered to the deport in the northern part,” the BPC official said.

NRL already supplies a small volume to state-owned BPC for the country’s northern region.The refinery, located in the eastern Indian state of Assam, will supply around 22,000 tonnes of gasoil with a sulphur content of 500 parts per million (ppm) between October and December by railroad, BPC officials said.

BPC received its first batch this month under the three-month agreement.

Bangladesh typically ships in around 3.2 million tonnes of diesel and 2.5 million tonnes of fuel oil annually.

Sellers include Kuwait Petroleum Corp, Malaysia’s Petroliam Nasional Berhad, Emirates National Oil Company, Philippines National Oil Co, Vietnam’s Petrolimex, Thailand’s PTT, Indonesia’s Bumi Siak Pusako and Zhenhua Oil.

Palm oil demand strong as top buyers China, India restock inventories

KUALA LUMPUR (Reuters) - Palm oil demand is expected to remain robust for the rest of the month as key consumer countries India and China rebuild low stock levels, bucking a seasonal trend in which shipments of the tropical oil typically taper off at year-end.

A narrow discount to a rival edible oil, however, could limit demand growth moving forward, say traders and analysts, since buyers usually switch to more favored soyoil when its price premium over palm narrows.The price differential or the spread between palm oil on the Bursa Malaysia Derivatives Exchange and Chicago Board of Trade soyoil has been hovering between $80 and $90 a tonne, soyoil’s narrowest premium over palm since February.

“For October we’re looking at a 10 to 13 percent gain in exports, mainly from China and India, though India demand may slow compared to the previous month,” said David Ng, a derivatives specialist at Phillip Futures in Kuala Lumpur.

“The current spread could be a limiting factor for demand (for palm oil), but major destinations are lacking palm this year, so they are restocking their inventories,” Ng said.India, in particular, has been seeing shortages in its domestic vegetable oils supplies, he said.

India and China are the world’s top two buyers of palm oil, and command a substantial share of global demand. Palm oil import demand from China and India, which celebrate the Mid-Autumn and Diwali festivals respectively this month, had already gained in September as buyers stocked up ahead of the events.

Malaysian shipments overall rose in September over August with notable gains in Chinese demand, according to data from the Malaysian Palm Oil Board.

Also, the most recent export data from the Indonesian Palm Oil Association showed a 24 percent monthly gain, with shipments to China and India rising.Port stocks in China in October are at half of their peak levels this year, despite having risen from a yearly low in August.

“Consumer countries had been waiting for prices to decline in the second half of 2017, but prices held steady and did not fall significantly,” said Alan Lim, plantations analyst at MIDF Research.

Lim expects palm’s spread or discount against soyoil to range between $80-100 per tonne until year-end, but “whether the discount can maintain will depend on the weather in Brazil”.

Soybean production in Brazil, the world’s second-largest producer, is likely to be smaller in the 2017/18 season compared to the prior crop year due to less favourable weather.“If soybean output declines and soyoil prices go up, we expect that palm oil demand will increase,” Lim said.

Palm Oil exports imports

China import growth pushes trade surplus to 6-month low

China’s export growth came in lower than forecast in September as an unexpected jump in the value of imports resulted in the country’s smallest trade surplus in half a year. But the latest data also showed the largest nominal trade surplus with the US on record, based on figures dating back to 1993.

The dollar value of outbound shipments rose 8.1 percent year on year in September to $198.3bn, according to the General Administration of Customs, up from a rise of 5.5 percent in August but missing a median forecast of 8.8 percent from economists surveyed by Reuters.

Imports climbed more than expected, however, rising 18.7 percent from a year prior to $169.8bn and outperforming a median forecast predicting growth in inbound shipments would edge up just 0.2 percentage points from August’s pace of 13.3 percent.

Growth in commodities imports remained robust in volume terms, with shipments of iron ore rising 10.6 percent year on year to a record 102.8m tonnes. The uptick in shipments comes despite recent falls in the commodity’s price as authorities demand steel mills curb output to reduce pollution during the winter heating season.

Analysts at ANZ suggested the rise was due to demand from Chinese steel mills for higher-grade iron ore. Looking at the broader picture for trade, they said a “lack of build in stockpiles suggests strong underlying demand, rather than restocking, was the main driver” behind the latest figures.

The jump in import value resulted in China’s trade surplus dipping to $28.5bn, down $13.5bn from August to the lowest level since March and counter to expectations it would fall just $2.5bn.

However China’s trade surplus with the US climbed to $28.5bn in September, up almost $2bn from August and marking the largest on record not adjusted for inflation, according to data from CEIC sourced to China’s customs administration and reaching back to January 1993.