Profit-booking drags sugar futures

Sugar prices ruled steady on Tuesday on routine demand while profit booking pulled down prices by Rs 5-7 a quintal on the domestic futures market.

Due to continuous rain in the city and middle month time, local demand remained need-based that kept prices in physical markets steady with minor changes. Moral was calm, said traders.

Sources said that in the Vashi wholesale market, S-grade improved by Rs 10 while M-grade lost by Rs 5 at higher end.

Naka and mill tender rates were steady, while in futures market, profit booking pulled down prices after rising Rs 38 in the last two days. Physical lifting remained lower than arrivals.

In the Vashi market, arrivals were 64-65 truckloads (each 100 bags) and local despatches 58-60 loads.

On Monday, 15-16 mills offered tenders and sold about 38,000-40,000 bags to local traders at Rs 2,950-3,010 (Rs 2,950-3,010) for S-grade and Rs 3,020-3,120 (Rs 3,020-3,120) for M-grade.

On the National Commodities and Derivatives Exchange, sugar July contracts declined by Rs 5 to Rs 3,106 (Rs 3,111), August slipped by Rs 6 to Rs 3,158 (Rs 3,164) and September by Rs 7 to Rs 3,198 (Rs 3,205) till noon.

The Bombay Sugar Merchants Association’s spot rates were: S-grade Rs 3,080-3,141 (Rs 3,069- 3,131) and M-grade Rs 3,172-3,331 (Rs 3,172-3,336). Naka delivery rates were: S-grade Rs 3,020 -3,080 (Rs 3,020-3,080) and M-grade Rs 3,140-3,220 (Rs 3,140-3,220).

Coal block owner must sell power on long-term contract

The Government has made it mandatory for power companies which have been allocated coal blocks to sell electricity through long-term contracts with distribution utilities; otherwise, they stand to lose their mining permission.

Power plants that are likely to get commissioned shortly or in the next 18 months should get into long-term power purchase agreements (PPA) with the discoms, at least six months before commissioning the plant.

The norm is applicable to companies allocated coal blocks in the previous years. Official sources said that the Power Ministry had asked the Coal Ministry to include this clause in the coal allocation letters.

This decision, taken after deliberations between Secretaries in the Ministries of Coal, Power and Law, is meant to ensure that the benefit of cheaper domestic coal is passed on to consumers, as observed by the Comptroller and Auditor-General of India (CAG) in its last audit report.

The CAG, in its report on allocation of coal blocks and augmenting production, high- lighted that there was a “need for a strict regulatory and monitoring mechanism to ensure that the benefit of cheap coal is passed on to the customer”.

Govt may sell 10 mt wheat from Central pool

The Government proposes to offload about 10 million tonnes (mt) of wheat from the Central pool stocks in Punjab to domestic bulk buyers and exporters. This open market sale could help the Government control rising domestic prices on the lower-than-expected crop.

The Food Ministry has moved a proposal that may come up before the Cabinet Committee on Economic Affairs soon. Of the 10 mt, about 8.5 mt would be earmarked for domestic bulk buyers under the open market sale scheme (OMSS) at a likely price of around Rs 15,000 a tonne, official sources said.

Private exporters will also be allowed to access this OMSS wheat for shipments. “We are planning to do away with the ban on exports for wheat sold under the OMSS,” the official said.

The proposed move comes after the Government received a poor response to its recent offer of five million tonnes for exports through private players, as the price fixed was considered higher than global prices.

Offloading pattern

The Government also plans to offer about one million tonnes to smaller domestic consumers, four lakh tonnes to State Governments and another one lakh tonne to co-operatives.

Besides , it proposes to release 5 mt for the public distribution system (PDS) sales to poor families. The financial burden of PDS sales is expected to be around Rs 9,471 crore.

Also, the Government plans to export another 2 million tonnes through State-owned trading entities such as PEC, MMTC and STC. So far, these entities have contracted about 4.2 million tonnes for exports and have shipped out about 3.9 million tonnes. The average realisation of these entities has stood at $316 a tonne.


Even as the Government proposes to offload wheat from Punjab, the millers have urged that they be allowed to lift the stocks from any depot of their choice. “We have written to the Food Minister in this regard and expect to meet him soon,” said Adi Narayan Gupta, President of Roller Flour Millers Federation of India. Such a move is expected to provide the millers quick access to stocks across the country.

Wheat prices have risen by about Rs 150 a quintal in recent months on lower-than-expected crop and farmers holding back their produce in anticipation of better prices in the year ahead. The Government agencies have so far procured about 25.08 mt of wheat, about 32 per cent lower than corresponding last year, as the procurement season has almost come to an end.

Market rally continues pulling iron ore as well in China

Steel price maintained the uptrend for the second day this week sending encouraging signal to the iron ore prices as well which rallied which broke silence after 12 days improving by3%.

Finished market replenishment of stocks at traders and stockiest end is expected to pick up after the passage of summer. However domestic mills in China are maintaining caution by reducing price for July. A sustained improvement for over week will certainly entice them to improve level in second half.

Strength was evident across the market buoyed by a recovery in steel prices led to a rally in seaborne prices as mills felt the need to replenish stocks. Iron ore stockpile at ports remained at manageable levels of 71 million tonne

Chinese imports causing serious damage to Mexican steel industry

According to industry chamber Canacero, rising imports of steel from China involving unfair trade practices are causing serious damage to Mexico's steel sector.

Canacero in a statement said that China exported 143,219 tonne of steel products to Mexico in the first three months of 2013, up 18.4% from 120,934 tonne in the same period last year.

The chamber said that while the Mexican steel industry does not receive government subsidies, has import tariffs of practically zero and the country has a free trade policy, China is a closed economy which employs subsidies and dumping practices while paradoxically maintaining import duties greater than 15%,

The chamber added that in response to the threat of unfair trade practices, steel producers and the Mexican government have "reinforced" systems of vigilance and control to alert authorities of taxes, fines and other fees which must be paid on steel imports.

Authorities and steel companies are also collaborating to start antidumping investigations into steel imports, primarily from countries with which Mexico has no trade agreements.

The government has already begun three antidumping investigations, including one in June relating to imports of galvanized steel mesh from China.

RINL gets LoI for iron ore block at Bhilwara in Rajasthan

ET reported that the Rajasthan government has allocated a large iron ore block at Bhilwara to RINL in a move that has been approved by the union mines ministry.

RINL plans to initially invest INR 2,500 crore to set up a beneficiation unit and a 2 million tonne pellet plant in Bhilwara for value addition of the ore before using it at the Vizag steel plant.

Mr AP Choudhary CMD of RINL said “The Rajasthan government has issued a letter of allocation to us for an iron ore block at Bhilwara last week. We will start scientific exploration work at the site to make an assessment of the reserves and also bring in the latest technology to beneficiate the ore. We are planning to make an initial investment of INR 2500 crore to develop the block and process the ore.”

He added “The reserve, spread over some 950 hectare, has been initially estimated to contain some 270 million tonne of low grade magnetite ore.”

Source - ET

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