Oil demand, prices to remain on upswings

According to the forecasts by the International Energy Agency, Global demand for oil would remain strong this year, led by China and other Asian countries. The agency also estimated that Organization of Petroleum Exporting Countries (OPEC) producers had so far cut production by about half of the 1-million barrels a day agreed on from January to sustain prices. The agency commented that oil prices had remained extremely volatile for last year, this year though the growth is expected to be lower, but will still be led by China and non-OECD Asia. It is assumed that 10 OPEC members had agreed to cut production by 1million barrels a day from January to bring real output closer to the target of 27-million barrels. On the price related data, news agency Bloomberg confirms that Crude oil for February delivery fell as much as 89 cents, or 1.9 percent, to $46.66 a barrel in after-hours electronic trading on the New York Mercantile Exchange on 19^th Jan.This decline is believed to be the biggest since Jan. 5. The contract traded at $46.92 a barrel at 9:28 a.m. Singapore time.

Precious metals up on fresh domestic buying

Over the weeks in early 2005, precious metals have been moving in a narrow range with small or no activity altogether in international as well as the international spectrum. Wednesday on 19^th January, gold futures in Comex division of NYMEX rose to its highest level for the week but ended again on a narrow footage as mixed U.S. economic data provided a modest lift to the dollar. According to the news agencies, U.S. consumer prices fell 0.1 percent in December, led by weaker gasoline and heating oil prices. But first-time claims for state unemployment benefits plunged 48,000 to 319,000 last week and the nation's housing starts rebounded in December, rising at the fastest monthly rate in more than seven years. Gold for February contract at Comex shed 20 cents to close at $423.30. Earlier, it reached a high of $427.20.

In the domestic spot market at Mumbai, the metals have witnessed fresh buying support from stockists leading gold and silver for significant gains. Gold for 995 purity closed at Rs6,125 for 10gms than its earlier close of Rs6,110, a Rs15 high. White metal Silver for 999 fineness too jumped at Rs 10,440 after a firm start at Rs 10,420 for the day. Silver was up Rs45 from its previous closing at Rs10,395 for 1kg.

Oiloseeds major Bunge may buy majority in Ruchi

Oilseeds major Bunge has plans of acquiring majority stakes in Ruchi group, entering into a joint venture and this way it will become the biggest Oilseeds Company in India. Bunge is famous for its ‘Dalda’ brand in the oil market, whereas the Ruchi group owns several large port-based refineries, oilseed crushing plants, vanaspati units, and liquid storage tanks at port, apart from brands like Nutrela and Soyumm. Another news in the edible oil industry is that the US foods major Cargill has already established a similar JV with Pune-based Parakh Foods to acquire more refining capacities and a retail distribution network for its brands. The discussions were just a part between the members on 74^th IASC World Congress, 2005 being held in Mumbai and about to finish on Thrursday. The International Association of Seed Crushers meeting has highlighted many insights to the oilseeds industry and also made prospects for the Indian companies to join the global bandwagon and leaders of the industry. As per the news agencies reports, a company spokesperson commented, "We have a long standing relationship with Bunge. They are our largest suppliers of crude edible oils and one of the largest buyers of soyabean meal. We are also in talks with Bunge for a long-term supply chain management of our crude oil requirements. Bunge is a strategic business associate for us". Again the news confirm that Ruchi, the 2500cr group, has been grappling with a high debt burden, selling its plants to Bunge would reduce liabilities and allow the company to consolidate its widely diversified activities in the sector. Ruchi has refineries in Mangalore, Chennai, Indore, and Kandla, with a new one coming up at Patalganga. Ruchi Soya’s subsidiaries include Ruchi Health Foods, Ruchi Worldwide, and Aneja Solvex, apart from a joint venture Promise Exports, in which it holds 70% stake, with Ruchi Pvt Ltd holding the rest. On the other hand, Bunge is an integrated global agribusiness and food company operating in the farm-to-consumer food chain with worldwide distribution capabilities. It is the world’s leading oilseed processing company, the largest producer and supplier of fertilisers to farmers in South America and the world’s leading seller of bottled vegetable oils to consumers. Bunge acquired Prestige Foods in the year 2004, including an oilseed-processing unit with an integrated vegetable oil refinery and packaging facility, resources add.

Commodity Exchanges not under SEBI umbrella now

It is since long for the discussion on bringing the commodity exchanges under the SEBI umbrella, but according to recent developments regarding this, the ministry is confirming that it is too early for such a decision and the market is in its niche stage and not expecting any move like this. The industry participants also feel that it is It is not just a question of similar kinds of financial instruments and trading. Commodity markets have yet to be linked to farmers, which are the main end-customers. They have also to be linked to the processing industries. This developmental aspect will be lost if futures exchanges are handed over to the finance ministry right now. According to news resources, The ministry of consumer affairs has nixed the finance ministry proposal to converge the regulation of financial and commodity markets under one authority, like SEBI. Instead consumer affairs minister Hon. Shri Sharad Pawar is now proposing an independent coordinating body that would link and strengthen all the elements in the trading chain, including the commodity markets, the FMC, farmers, and the food-processing sector. Agriculture minister, Shri Sharad Pawar is looking into the direction to increase farmer participation in the commodity market and developing a similar model of APMC. And also, reports are that the consumer affairs ministry has decided to strengthen the FMC by creating extra 40 posts, to be filled through officers on deputation.

Sugar prices still soar, imports unlikely says Pawar

Sugar pieces are still not slowing down even after the hike in free sale quota released by the government and widespread speculation mixed with the traders strike impact rule the market. The prices are up by Rs5-5.50 from previous year and the wholesalers are still expecting some more movements in near future. On Wednesday, Union food minister Sharad Pawar withdrew his threat to traders that the Centre could consider cutting import duty on white sugar. The government is still keeping its options open on waiving the export obligation for raw sugar imports under the advance license scheme if sugar prices did not remain stable, as per the ministry.

Early this year, the Centre had released additional 4 lakh tonnes of sugar to boost market availability to a record 44.5 lakh tonnes and bring down prices for the quarter up to March ’05. As per the market movement, possibility of importing white sugar has been reduced from the fact that along with the 120 lakh sugar production this season, plus a good size carryover stock (of 85 lakh tonnes) ensured that there was no need to actually ease white sugar imports, Pawar said.

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