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Confirming the solidifying of the economic outlook for India over the next few months, Conference Board Leading Economic Index (LEI) for India has increased 0.7 per cent in May as seven of the eight components contributing positively, the US-based body said."Financial indicators and exports contributed to May's large increase in the Leading Economic Index for India," said Jing Sima, Economist at The Conference Board."Sentiment and consumption have also rebounded sharply on the back of a positive outcome from the May general election."The acceleration in the six-month growth rate of the LEI suggests a pick up in the pace of economic expansion in the coming months," he said."May's movement in the LEI confirms a solidifying of the economic outlook for India over the next few months," said Bart van Ark, Chief Economist at The Conference Board."The newly elected government will have an opportunity to benefit from improved confidence, although rising food and energy prices remain challenging to a sustained economic recovery," he added.The Conference Board Coincident Economic Index (CEI) for India, which measures current economic activity, increased 0.7 in May to 203.1 (2004 = 100), following a 1.1 per cent increase in April and a 0.7 per cent increase in March.Two of the four components contributed positively to the index in May, a media release said.LEI for India aggregates eight economic indicators that measure economic activity in the country.This includes interest rate spread, Stock Prices, real effective exchange rate index, 36 countries; real money supply, merchandise exports, cargo handled; and PMI.Launched in September 2013, the Conference Board Leading Economic Index for India, conceptualised back to April 1990, has successfully signalled turning points in the economic cycles of India.The Conference Board also produces LEIs for Australia, Brazil, China, the Euro Area, France, Germany, Japan, Korea, Mexico, Spain, the United Kingdom, and the United States.(PTI)
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India-born plant scientist Sanjaya Rajaram has been named the winner of the $250,000 World Food Prize for his breakthrough achievement in increasing global wheat production by more than 200 million tonnes following the Green Revolution.Rajaram's contributions in successfully cross-breeding winter and spring wheat varieties, which were distinct gene pools and had been isolated from one another for hundreds of years, led to him developing plants that have higher yields and a broad genetic base.More than 480 high-yielding wheat varieties bred by Rajaram have been released in 51 countries on six continents and have been widely adopted by small- and large-scale farmers alike."Rajaram's work serves as an inspiration to us all to do more, whether in the private or public sector," said US Secretary of State John Kerry at an event where he delivered the keynote address."When you do the math, when our planet needs to support two billion more people in the next three decades, it's not hard to figure out: This is the time for a second green revolution," Kerry said.Rajaram followed Nobel Peace Prize Laureate Norman E Borlaug at the International Maize and Wheat Improvement Center, CIMMYT, leading its Wheat Programme from 1976 to 2001.World Food Prize Foundation President and the former US Ambassador to Cambodia Kenneth M Quinn said the 2014 World Food Prize Laureate is an individual who worked closely with Dr Borlaug in Mexico and who then carried forward and extended his work, breaking new ground with his own achievements."We are grateful for the hundreds of new species of wheat Dr Rajaram developed, which deliver 200 million more tonnes of grain to global markets each year and feed millions across the world," Kerry added.He also talked about Feed the Future, a presidential global hunger and food security initiative, through which the US is establishing a foundation for lasting progress against global hunger."Feed the Future supports a research agenda to harness scientific innovation and technology in agriculture," he said.The World Food Prize was established in 1986 by Borlaug in order to focus the world's attention on hunger and on those whose work has significantly helped efforts to end it.(PTI)
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India has blamed the World trade Organisation (WTO) for creating a deadlock in the ratification of trade facilitation agreement (TFA) by engaging in a mere academic debate on the subject of food security while pushing hard to build a consensus on the TFA. “It is regrettable indeed that today the WTO is unable to agree even to fast track negotiations on an issue of such importance to millions of subsistence farmers across the developing world, while the rich world can continue to subsidise their farmers unabatedly”, she said. In a statement made in the Lok Sabha today (5 August), Commerce Minister Nirmala Sitharaman said that a permanent solution on food security was a must for India. Explaining the reason why India opposed the TFA, she said that the country “took the stand that till there is an assurance of commitment to find a permanent solution on public stockholding and on all other Bali deliverables, including those for the Least Developed Countries (LDCs), it would be difficult to join the consensus on the Protocol of Amendment for the Trade Facilitation Agreement. According to the minister, India found that in contrast to their efforts on TFA in the WTO, some developed countries have been reluctant to engage on other issues like food security. “Seeing the resistance to taking forward the other decisions, the apprehension of developing countries was that once the process of bringing the Trade Facilitation Agreement into force was completed, other issues would be ignored, including the important issue of a permanent solution on subsidies on account of public stockholding for food security purposes”. The minister also pointed out that “without a permanent solution, public stockholding programmes in India and other developing countries will be hampered by the present ceiling on domestic support which is pegged at 10 per cent of the value of production and is wrongly considered as trade-distorting subsidy to farmers under existing WTO rules”. The TFA is aimed at greater transparency and simplification of customs procedures, use of electronic payments and risk management techniques and faster clearances at ports. Sitharaman said that India has already taken several similar measures such as the 'Indian Customs Single Window Project' announced in the Budget 2014-15 to facilitate trade, under which importers and exporters will be able to lodge documents at a single point, reducing interface with governmental agencies, dwell time and the cost of doing business. The Bali Ministerial Declaration was adopted on 7 December 2013 on conclusion of the Ninth Ministerial Conference of the WTO in Bali. Ministerial Decisions were adopted on ten issues relating to the Doha Development Agenda which is the agenda for the unfinished Doha Round of trade negotiations, underway in the WTO since 2001. Amongst these Ministerial Decisions, two are of particular significance — the Ministerial Decision for an Agreement on Trade Facilitation and the Ministerial Decision on Public Stockholding for Food Security Purposes. The Protocol of the Trade Facilitation Agreement (TFA) was to be adopted by 31 July 2014 by the WTO. After this the Agreement would automatically come into force from 31 July 2015 if ratified by two-thirds of the members of the WTO.
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India plans to clear some pending oil payments to Iran through the United Arab Emirates central bank, three sources with knowledge of the matter said, under an interim nuclear deal that has allowed Tehran access to $4.2 billion in blocked funds globally.The mechanism reflects a U.S. insistence that the transfers can be closely tracked. Payments would reward Tehran for cooperating in nuclear talks that, if successful, would return Iran to the international fold after decades of isolation.Despite some signs of improving relations between Washington and Tehran, a full deal over Iran's nuclear activity remains elusive.Iran and six world powers re-launched talks on Tuesday to try to salvage a deal on Tehran's nuclear activity by a July 20 deadline.Iran's earlier request to repatriate $1.65 billion in Omani Rials through Bank Muscat proved not to be workable. It was not known why that channel was not utilized.Under the proposed new arrangement, the Reserve Bank of India would buy the dollars from authorised currency dealers, instead of the Indian oil buyers tapping the currency market, the sources said. The UAE central bank would then remit the funds to Iran in dirhams, the sources said.The UAE central bank and the U.S. Treasury department's Office of Foreign Assets Control did not immediately respond to requests for comment. No comment was available from the RBI.The sanctions slapped on Iran in 2012 closed banking channels for the transfer of oil payments to the OPEC member country, choking off its revenues, crippling the economy and ultimately bringing it to the negotiating table.TransparencyThe Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury has informed India that Iran would like to receive $1.65 billion in three equal installments through the UAE central bank, the sources said."It is indeed a complex mechanism but it has been devised to bring in transparency in the money transfer to Iran," said one of the sources, all of which declined to be identified as they were not authorised to speak to media.In a first step, India's petroleum ministry would instruct oil refiners to remit funds in rupees to the account of an Iranian bank with India's state-run UCO Bank.UCO would then transfer the sum to the RBI for crediting to a new rupee account held by the UAE central bank.Once this step is completed, the UAE central bank would make a payment in dhirams to the Iranian central bank. On receipt of payment confirmation, the RBI would credit the UAE account with an equivalent sum in dollars.The RBI would then settle its dollar purchases with the funds on the UAE rupee account.Indian refiners Essar Oil, Mangalore Refinery and Petrochemicals Ltd, Hindustan Petroleum Corp and HPCL-Mittal Energy Ltd. together owe about $4 billion to National Iranian Oil Co, an MRPL executive said last month.In the first two installments, Mangalore Refinery and Petrochemicals would pay about $238 million, Essar Oil $232 million, Indian Oil Corp $57 million, Hindustan Petroleum about $8 and HPCL Mittal about $15 million."The respective payments by the four refiners will be same for the first two installments. Numbers for the third installment are yet to be worked out," said one of the sources.India has been settling 45 percent of Iranian oil payments by transferring rupees into Iran's account with UCO Bank, while the refiners hold the remainder. Tehran is using the funds in UCO Bank to import goods from India.India, which imports a total of 4 million barrels per day of oil, has been steadily reducing its dependence on Iran, whose share in its overall oil imports has fallen by two-thirds over the last five years to 5.7 percent in 2013-14.(Reuters)
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The rupee strengthened to 60 per dollar on Thursday (19 June), its highest in almost a week, after the U.S. Federal Reserve signalled that interest rates will stay low for a while yet.At 0336 GMT, the rupee trading at 60.0150/0300, after having hit 60.00, a level last seen on June 16. It had closed at 60.39/40 against the dollar on Wednesday.However, traders expect the gains to be limited during the session as concerns persisted that an insurgency in Iraq could disrupt oil exports from the second-largest OPEC producer.(Reuters)
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The rupee on Wenesday (18 June) fell 36 paise to end at an over seven-week low of 60.39 against the US dollar as growing unrest in Iraq pushed up crude and caution prevailed in the currency markets ahead of the outcome of US Fed meeting.A sharp fall in local equities amid slow down in capital inflows too had a negative impact on the rupee, say dealers.Global crude oil prices rose further and the benchmark crude oil for July delivery added 41 cents to USD 106.77 on New York Mercantile Exchange as militants, early morning today, attacked Iraq's largest oil refinery. As a result, importers, mainly oil refiners, went on a dollar buying spree.At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced lower at 60.28 and moved erratically in a wide range of 60.06 and 60.54 before settling at 60.39, a net fall of 36 paise or 0.60 per cent. Today's closing level was the weakest for the rupee since 60.42 on April 29.The benchmark S&P BSE Sensex reacted sharply downwards by 274.94 points, or 1.08 per cent today. FIIs picked up shares worth Rs 48.02 crore yesterday, as per provisional data.Pramit Brahmbhatt, Veracity Group CEO, said: "Today rupee lost more than half a per cent during the day taking cues from local equities which closed weak on profit booking."Also, tension in Iraq raised worries among investors.Trading range for spot rupee is expected to be 60 to 60.80."The US dollar held firm against major rivals before an update on the US economy later tonight from the Federal Reserve following its two-day policy meeting where it is widely expected to cut monthly stimulus further by USD 10 billion. "A militant attack on one of the oil refineries in Iraq led to concerns regarding crude supply disruptions. India being one of the largest oil importers is especially vulnerable to such shocks. Immediate impact was seen in stocks and rupee," said Abhishek Goenka, Founder & CEO, India Forex Advisors.Meanwhile, the premium for forward dollar closed steady to weak on stray receipts by exporters.The benchmark six-month premium payable in November eased to 222.5-224.5 paise from 224-226 paise previously.However, far-forward contracts maturing in May, 2015 closed at its overnight level of 460-462 paise.The Reserve Bank of India fixed the reference rate for dollar at 60.1240 and for the euro at 81.4310.The rupee fell back sharply against the pound to 102.33 from yesterday's close of 101.19 and turned negative to end at 81.93 per euro from 81.45. It declined to 59.09 per 100 Japanese yen from 58.85.(Agencies)
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Dollar Tree has agreed to buy rival discount chain Family Dollar Stores for $8.5 billion to fend off growing competition from Wal-Mart Stores and fellow discounter, Dollar General. Dollar stores have struggled in a weak US economy as Wal-Mart and other large retail chains chase penny-pinching consumers by offering more items priced at $1 or less. The deal will give Dollar Tree more than 13,000 stores across the US and Canada, vaulting the company ahead of Dollar General to become North America’s biggest discount retailer, with more than $18 billion in annual sales.Homing InOnline real estate website Zillow has bought rival Trulia in a $3.5 billion stock deal that merges the two main firms in the sector. “Consumers love using Zillow and Trulia to find vital information about homes and connect with the best local real estate professionals,” Zillow chief executive Spencer Rascoff said. “This is a tremendous opportunity to combine our resources and achieve even more impressive innovation that will benefit consumers and the real estate industry.” The combined company will maintain both the Zillow and Trulia consumer brands, and provide listings for home and apartment sales and rentals. The boards of both firms approved the deal, expected to close in 2015, according to a joint statement.Dark DeedsGermany’s Deutsche Bank and Switzerland’s UBS said they were caught up in an inquiry by US regulators, who are looking into whether broker-run stock exchanges gave an unfair advantage to high-frequency traders. The investment banks said they were cooperating with inquiries. The two also face class action suits that allege they violated US securities laws, allowing high-speed traders to make a profit at the expense of institutional investors such as pension funds. UBS said in its second-quarter earnings report that it was responding to inquiries from US authorities over the operation of its ‘dark pool’.Food For ThoughtMcDonald’s has suspended sales of chicken nuggets and other items in Hong Kong after it emerged that it had imported products from Shanghai Husi Food, the US-owned Chinese company at the centre of a food safety scare in China. The food scandal broke after a report showed staff at Husi Food using long expired meat and picking up food from the floor. In Japan, McDonald’s said it would halt all imports of chicken products from China and shift that business to Thailand, boosting purchases from McKey Foods Services, a unit of Keystone Foods, and Cargill Thailand.Security UpgradeBlackBerry is buying a privately held German firm, Secusmart, that specialises in voice and data encryption, in a bid to burnish its credentials with highly security-conscious clients like government agencies. The Waterloo, Ontario-based smartphone maker did not disclose the terms of its deal to acquire Secusmart, which specialises in encryption and anti-eavesdropping services for governments, companies and telecommunications service providers. The acquisition is the latest by the smartphone pioneer to build on niche areas in an attempt to reinvent itself under new chief executive John Chen.Bigger FootprintUK’s BSkyB will pay $9 billion to buy Rupert Murdoch’s pay-TV companies in Germany and Italy, taking its hunt for growth into Europe by creating a media powerhouse with 20 million customers. Under the deal, BSkyB will pay Murdoch’s 21st Century Fox for the pay-TV companies using cash, debt, a stake in a TV channel and the placement of shares that represent around 10 per cent of its issued share capital.Speed BreakerGeneral Motors recently announced six recalls covering 717,950 vehicles in the US for varying reasons, although none were related to ignition switch issues. GM has already recalled nearly 15 million vehicles this year for potentially lethal issues with ignition switches. In a separate move, GM wants to put nearly a fifth of its workers at a factory in Brazil on paid leave, a workers union said, amid falling output in Latin America’s largest economy. Calling the move “unnecessary”, the union said 1,000 workers in Sao Paulo state could be laid off.Window Of MistrustMicrosoft appears to be the latest US company to be targeted by China for anti-trust investigations after officials from China’s state administration for industry and commerce paid sudden visits to the software firm’s offices in Beijing, Shanghai, Guangzhou and Chengdu. The Chinese agency declined to comment on the visits. A Microsoft spokesperson said the company was “happy to answer the government’s questions”, but declined to give any further information. A source close to the company said the visits were most likely a preliminary step ahead of an anti-trust investigation.Rebuilding BrandReeling under the pressure of two catastrophic aviation tragedies, Malaysia Airlines is likely to change its name as part of a radical overhaul and restructure routes in a bid to repair its reputation. The Malaysian flag carrier, majority-owned by the government, is also seeking new investors to rebuild its business. Work has already started on a strategic review that will restructure the airline’s routes, according to sources. Tit For TatRussia announced a ban on some fruit imports from the European Union and chicken from the US, even as Brussels considered slapping tighter sanctions on Moscow over the Ukraine crisis. An advisor to the chief of Russia’s food and agricultural inspection service Rosselkhoznadzor said oriental fruit moths had been detected in some European imports. The larvae of the moths feed on the cores and pits of fruit.Stiff PenaltyAn international arbitration court ruled that Russia must pay $50 billion for expropriating the assets of Yukos, the former oil giant whose ex-owner Mikhail Khodorkovsky fell foul of the Kremlin. Finding that Russian authorities had subjected Yukos to politically motivated attacks, the panel made an award to a group of former Yukos shareholders that equates to more than half the entire fund Moscow has set aside to cover budget holes. Russia, whose economy is on the brink of recession, said it would appeal the ruling by the Holland-based panel, which judges private business disputes. This story was published in BW | Businessworld Issue Dated 25-08-2014)
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The new government led by Narendra Modi on Tuesday (18 June) imposed export restrictions on certain farm commodities and ordered a crackdown on hoarding to control rising food prices, a day after wholesale price inflation hit a five-month high.A jump in prices of potatoes and onions last month drove inflation to 6.01 percent from 5.20 percent in April, contributing to a sell-off in financial markets.Prime Minister Modi, who was elected last month amid widespread anger over rising prices, has made tackling inflation his top priority.Forecasts of weak monsoon rains that irrigate much of India's food production have added to inflation fears, and volatile vegetable prices have risen by double digits.Finance Minister Arun Jaitley, who held a meeting on Tuesday to decide steps to control food inflation, said the government was keeping a close watch on the price movements of 22 commodities and would offload additional rice stocks in the market to prevent a build-up in inflationary expectations.The government also imposed a minimum export price on onions of $300 per tonne from $150 per tonne to discourage overseas shipments and Jaitley said a similar curb would be imposed on exports of potatoes."Even though the increase (in food prices) has only been marginal, we don't want anybody to exploit the situation," he told reporters after the meeting. "And therefore, in anticipation of any further market reaction, a series of steps have been decided and they are being put into place."The weather department predicts below-average rainfall between June-September this year, which could hit summer crops such as rice, corn, soybean and cotton.Summer monsoon rains are vital for 55 percent of India's farmlands that lack irrigation facilities. In 2009, patchy rains led to the worst drought in nearly four decades and drove annual food inflation up to more than 21 percent.India has stockpiles of staples like rice, wheat and sugar that can be released, but the government has limited means to control surges in the cost of fruits and vegetables, which have the largest impact on food inflation.Jaitley asked the states to amend their laws crack down on speculative hoarding in anticipation of a weak monsoon and boost the supply of fruits and vegetables in open markets.New Delhi will also extend a line of credit to state governments to import pulses and edible oil to bridge the shortfall in the domestic market, he said.(Reuters)
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The rupee is trading lower at 60.24/25 versus its previous close of 60.03/04 as the dollar strengthens against most Asian currencies, but further falls in the Indian unit seen unlikely as traders expect dollar sales from exporters during the session.Caution persists due to the Iraq crisis as Brent crude prices remained steady above $113 per barrel as fears of oil supply disruptions from Iraq offset the possibility of increased supply due to a thawing of relations between Iran and the West.Traders expect the Reserve Bank of India to step in to check any spikes in the pair. The rupee hit a near two-month high of 60.55 per dollar on Tuesday but scaled back after traders spotted dollar sales from the central bank through state-run banks.The US dollar held onto modest gains early on Wednesday, having risen broadly after U.S. consumer prices recorded their largest increase in more than a year in May.Caution also prevails ahead of the outcome of the US Federal Reserve's two-day meet that ends later in the day.The partially convertible rupee is seen trading in a range of 60.02 to 60.40 during the session.(Reuters)
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Growth in India's services sector eased in July as new orders slowed, prompting some companies to put hiring plans on ice, a survey showed on Tuesday.The HSBC Services Purchasing Managers' Index (PMI), compiled by Markit, fell to 52.2 in July from June's 17-month high of 54.4.The country's dominant services industry hit a rough patch in 2013 and overall activity shrank for nearly a year but starting to expand again in May. A reading above 50 denotes expansion while below signals a contraction."Growth in the services sector softened in July after a big jump in the previous month. Nevertheless, the sector recorded its third consecutive month of expansion," said Frederic Neumann, co-head of Asian Economic Research at HSBC.China's services firms were in a similar situation. Official PMI data released on Monday (4 August) showed growth slipped to a six-month low in July as new orders rose at their weakest pace in almost a year.While order books were not in as bad a shape among Indian firms, some businesses did defer hiring plans. The employment PMI dipped below the break-even mark to 49.8 from July's 50.1.The services PMI data also showed input costs rose at a slower rate in July and that firms were able to pass on a slightly bigger portion to customers by raising prices."Final prices were marked up at a faster pace to reflect rising costs, underscoring the need for the Reserve Bank of India to remain cautious about inflation risks," said Neumann.The RBI is expected to keep interest rates steady later on Thursday but toughen up its rhetoric on inflation amid fears of a spike in food prices if monsoon rains are below average.(Reuters)
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