WTO Talks & IFPRI + Pakistan Basmati + Indian Farm Policy

[Guest guest]

In This NEWS Bulletin ************************************ 1. Aid-for-trade deals can end WTO stalemate : IFPRI 2. Pakistan developing new aromatic rice hybrids, Indian exports may take a hit 3. Centre drops idea of separate law for perishable exports Indian know-how for Ethiopian agri sector OTHERS - on what Prime Minister and Govt say on Indian farm policy 4. Keep Special Economic Zones (SEZs) out of prime farm land, says commerce minister, Kamal Nath 5. Prime Minister admits FARMERS' SUICIDES, crisis in farming, calls for bridging deficits 6. Focus on farming for rural growth, says prime minister 7. Prime Minister says Right-to-Information (RTI) Act not a substitute for good governance 8. Cooperative banks to get 4.5% subsidy on loans to farmers, assures prime minister 9. Revised

Plan paper calls for doubling farm growth 10. Centre to generate 70 million jobs in 11th Plan 11. Ganga-basin states to get Rs 305 cr (Rs 3050 million) for anti-erosin work 12. Investor confidence rising in commodity futures market, says apex industry body- Assocham 13. Rising gold impurity may push up diamond jewellery export by 5% ------------------------------ WORLD TRADE ORGANIZATION Aid-for-trade deals can end WTO stalemate: IFPRI http://www.financialexpress.com/fe_full_story.php?content_id=143740 ASHOK B SHARMA Posted online: Wednesday, October 18, 2006 at 0000 hours IST NEW DELHI, OCT 17: Concerned over the continuing stalemate in the WTO negotiations, the

inter-governmental body, International Food Policy Research Institute (IFPRI) has suggested that developed countries should commit a development package for the least developed countries(LDCs). According to IFPRI, the LDCs are the main losers getting a meagre benefit of 2% from the present $55-billion global trade. A rational package by the developed countries to the LDCs, therefore, can result in a forward movement in the WTO negotiations. IFPRI is one of the 15 affiliated organisations of the Consultative Group on International Agricultural Research (CGIAR). Speaking to FE, IFPRI director-general Joachim von Braun said, “The OECD countries, global finance institutions and the World Bank should come out with a sizeable package of aid-for-trade to the LDCs for meeting the requirements of structural changes. They should also provide increased market access to the products from LDCs. If these two things happen,

the benefit from trade to the LDCs would increase to 10% from the existing 2%.” Braun said developing countries like India, Brazil and China should also take the initiatives in breaking the present stalemate. Half of the opening up in global trade could be achieved if the developing countries open up to one another, he said. “A free and fair global trade would benefit consumers and producers alike. If there is any adjustment problems for farmers, some adjustment period can be negotiated. Greatest losers in the free and fair trade would be the powerful agri-business corporations in the developed world and, hence, there is lack of willingness to open up agricultural markets in the OECD countries,” he said. Braun also criticised the developed countries’ protection regime in the form of heavy subsidies. He said there was a consensus on phasing out export subsidies, but the

trade-distorting effect of export subsidies was minimum. ---------- Pak developing new aromatic rice hybrids; Indian exports may take a hit http://www.financialexpress.com/fe_full_story.php?content_id=143899 ASHOK B SHARMA Posted online : Thursday, October 19, 2006 at 0000 hours IST NEW DELHI, OCT 18: Pakistan is gearing up to compete with India in exports of basmati and aromatic rices. The neighbouring country is developing a new generation of aromatic rice hybrids by backcrossing its existing basmati lines with Chinese rice material. The proposed rice hybrid, however, would not qualify as basmati rice because one of its parental line would be

non-basmati. But it would be aromatic rice with increased yields and can easily create a niche in the global market for aromatic rice. Basmati rice is peculiar to select regions in India and Pakistan and both the countries compete in this commodity in global trade. “We are backcrossing our existing basmati lines with Chinese rice material to develop new aromatic rice hybrids with a potential to even double the current yields,” MB Cheema, a scientist with Pakistan’s Experimental Seed Production Unit, said. Cheema was in Delhi on the occasion of the IInd International Rice Congress- 2006. Cheema said new lines of rice have been developed with potential annual yields between five to six tonne per hectare but work being at an initial stage and it may take a few more years for tests to be conducted on various parameters, including length, width and breadth of grain, water absorption

ratio and cooked grain elongation ratio, he said. He said the Pakistan basmati hybrids at present give annual yields of around three to four tonne per hectare and added that the present breeding efforts were aimed at developing long and extra-long grain rice. Efforts were on since over a decade, he said. Long grain rice is between 6.7 millimeters and 7.4 millimeters, he said and added that grains above 7.4 millimeters are long-grain. In Pakistan, around 2.6 million hectares of land is covered by rice. In 2000, tall long grain Basmati-2000 was approved for cultivation in Pakistan’s Punjab province. Cheema said so far Pakistan has developed several new lines of basmati, some of which are undergoing research trails. Cheema said in Pakistan’s Punjab province, nearly 96% of rice output is basmati. Rice is one of the major farm commodities produced in

Pak and more than half of the output is exported. According to the USDA estimates, the Pakistan's milled rice output in the 2006-07 marketing year is estimated at 5.6 million tonne of which around 2.9 million tonne may be exported. Pakistan is expected to be among the top five exporters of rice by volume in 2006-07. ------ Centre drops idea of separate law for perishable goods exports http://www.financialexpress.com/fe_full_story.php?content_id=143976 Posted online: Friday, October 20, 2006 at 0000 hours IST NEW DELHI, OCT 19: The government has dropped the idea of bringing in a separate legislation to speed up the clearance process for export of perishable farm goods, and instead

decided to amend the existing Agricultural and Processed food products Export Development Authority (APEDA) Act for the purpose. “At present, more than 17 clearances are needed before a consignment of goods leaves Indian shores for overseas market. The amendment of the APEDA Act would bring in a single window clearance system for all the approvals,” agriculture secretary Radha Singh said on Thursday. The amendment would be soon taken to the Cabinet for approval, and could be introduced in the winter session of Parliament, official sources said They said, earlier, a separate legislation for the purpose was drafted but after inter-ministerial consultations, the advise of the agriculture ministry prevailed and it was decided to amend the existing APEDA Act. “It is much easier to amend an existing Act than bring in a new one,” the sources said, adding

the amendment would only take care of sanitary, phytosanitary and security clearances for exports of these commodities. However, the approvals of customs and other agencies would still be required. Officials said the speeding up of clearances was essential to reduce the time for exporting such commodities. In fact, in many cases, clearances for perishable goods were slower than those accorded to non-perishable items, they said. —PTI - Indian know-how for Ethiopian agri sector http://www.financialexpress.com/fe_full_story.php?content_id=143780 ASHOK B SHARMA ECONOMY BUREAU Posted online : Wednesday, October 18,

2006 at 0000 hours IST NEW DELHI, OCT 17: A proposal to send a four-member team of Indian experts to study salinity and for giving technical advise for increasing agricultural production in Ethiopia is under consideration of the government. The department of agricultural research and eduction has prepared a concept paper and forwarded it to the ministry of external affairs. This was communicated to Abera Deresa, state minister of agriculture and rural development of Ethiopia who called on minister of state for agriculture Kanti Lal Bhuria here on Monday. Deresa is currently in India as the leader of an eight member Ethiopian team to discuss potential co-operation between India and Ethiopia in agricultural sector. Bhuria expressed the India’s willingness to cooperate in the survey of research potential and

training personnel in fishing method and processing technology in various fisheries institutes. Cooperation could be extended to dairy development also. India has a surplus in agriculture trade with Ethiopia. The agricultural export to Ethiopia in 2005 amounted to $5.79 million against import of $2.34 million against our import from that country for about $ 2.34 million. The major items of India’s export to Ethiopia included paper/wood products/rice and dairy products and the major items of import were pulses and spices.----- ‘Keep SEZs out of prime farm land’ : Kamal Nath http://www.financialexpress.com/fe_full_story.php?content_id=143985 ASHOK B

SHARMA ECONOMY BUREAU Posted online: Friday, October 20, 2006 at 0000 hours IST NEW DELHI, OCT 19: Commerce and industry minister Kamal Nath said prime farm land should not be acquired for any industrial activity, including the special economic zones. The state governments which acquire land for SEZs should certify that they have not acquired any prime agricultural land. The SEZs should be set up on wastelands, he suggested. Delivering his valedictory address on Thursday at the conclusion of the Second Agriculture Summit, organised by the agriculture ministry and Ficci, Nath said, “Agriculture in India is not only for trade and commerce, but a concern of livelihood of 650 million farmers. As the developed countries didn’t recognised this reality, I had to stage a walkout at the recent WTO talks in Geneva.” He said agriculture revolution was ushered in the country through bullock

carts and not through tractors. The farming systems differ from region to region, so also the problems of farmers. “It is not possible to discuss all issues pertaining to farmers in a seminar like this,” he said. Nath also observed, “India is in the global map because of its large population size, and the developed countries consider it a lucrative market for pushing their products.” He said post-harvest technology was beyond the reach of the farmers. Efforts should be made to increase farmers’ purchasing power. The agriculture sector, which comprises 650 million people, contributed only 23% to the national GDP. This imbalance needs to be rectified, he said. Farmers who attended the summit complained about exploitation by traders and corporates. The summit, however, made several proposals for facilitating greater corporate involvement in the sector. Food processing industries minister Subodh Kant Sahai pleaded for more liberalised law for facilitating greater corporate involvement. --------------------------- PM says crisis in farming calls for bridging deficits, admits FARMERS' SUICIDES http://www.financialexpress.com/fe_full_story.php?content_id=143852 ASHOK B SHARMA ECONOMY BUREAU Posted online : Thursday, October 19, 2006 at 0000 hours IST NEW DELHI, OCT 18: Admitting an agrarian crisis in the country, Prime Minister Manmohan Singh on Wednesday called for bridging four deficits in the farm sector and a paradigm shift in farm policy. Identifying the deficits he said, “These are

public investment and credit deficit, infrastructure deficit, market economy deficit and knowledge deficit... Taken together, they are responsible for the development deficit in the agrarian and rural economy.” Inaugurating the second agriculture summit organised jointly by the agriculture ministry and the Federation of Indian Chambers of Commerce & Industry (FICCI) in here, the Prime Minister said, “We cannot deny the fact that there is a crisis in agriculture in many regions of the country. The problems may be attributable to a wide range of causes.” Singh said it was also a fact that many other sectors of agriculture were seeing a major transformation and farmers were reaping the benefits of technology, irrigation, better infrastructure, improved marketing facilities and advanced risk management technologies. He called for pulling out the subsistence farmers from their marginal existence and propelling

advanced farmers on global platform. Reiterating his commitment to remove the four identified deficit, he said the government has done something in this direction, while more is needed to be done. On restructuring of the credit structure for the flow of easy and cheap loan to the farm sector, he quipped, “Do we need to create new institutional structures such as self-help groups, micro-finance to provide improved and reliable access to credit? Or do we need to bring in moneylenders under some form of legislation?” Singh said he had sought suggestions for improving long-term capital investment in agriculture, but no such proposals have been put forth by experts. He said the government has set up an expert group to study farmers’ indebtedness and suggest remedies. A National Rainfed Area Authority will be set up for knowledge-based intervention in agriculture. Singh urged for qualitative improvement in farm research and extension services, greater investment in irrigation, raising real incomes of farmers and ending the urban-rural divide. He hoped the flagship programmes, Bharat Nirman and Backward Regions Grant Fund, would improve rural infrastructure and irrigation.------ ‘Focus on farming for rural growth’ http://www.financialexpress.com/fe_full_story.php?content_id=143632 ASHOK B SHARMA ECONOMY BUREAU Posted online : Tuesday, October 17, 2006 at 0000 hours IST NEW DELHI, OCT 16: With a view to expediate the ambitious Bharat Niram programme, Prime Minister Manmohan Singh

urged the district authorities to focus on rural infrastructure and the economy of agriculture. This would be the sustainable basis for removing distress in rural areas, he said. Inaugurating a national conference of district rural development agencies (DRDAs) in Capital on Monday, the Prime Minister admitted agriculture, which is facing a crisis currently, sustains 70% of the rural population. The government schemes can provide either social safety or inputs to better output, he said, adding “till we focus on the larger goal of improving the economy of agriculture itself, we cannot alleviate rural distress on a sustainable basis.” Singh said, while improvement in rural infrastructure, employment generation and asset creation through wage employment programme and investment in agriculture were all important, the final goal was to improve the conditions in which agriculture was practised. He urged the district

officials to dovetail the programmes under the Bharat Nirman scheme with timebound approach for improving farm incomes.He observed that many states were still lagging behind in achieving the target in rural roads and housing. He said, “as for rural roads — there are seven states — Uttar Pradesh, Bihar, Jharkhand, Orissa, Madhya Pradesh, Rajasthan and Chhattisgarh, which together account for over 90% of the prevailing backlog”. In rural housing, against an overall shortage of about 148 lakh (14.8 million), it was possible to provide 60 lakh (6 million) houses and the government has committed that all uncovered habitations would be covered under the rural water supply by 2009, the Prime Minister said. Singh called for investment in rural sanitation for improving public health. He suggested that the rural sanitation programme could work in synergy with community health agency 'Asha', placed in every village

to create awareness about hygiene. Turning to the ambitious National Rural Employment Guarantee Scheme, Singh said, though nearly 88 lakh (8.8 million) people were working in over 2.42 lakh (242,000) development projects, the programme has not been uniform across the states. The Prime Minister said over 1.58 lakh (158,000) jobs were created in the area of water conservation, and this was a huge opportunity opened up by the National Employment Guarantee Act (NREGA).- PM says RTI not a substitute for good governance http://www.financialexpress.com/fe_full_story.php?content_id=143559 ASHOK B SHARMAECONOMY BUREAU

Posted online : Monday, October 16, 2006 at 0000 hours IST NEW DELHI, OCT 15: Prime Minister Manmohan Singh said the Right to Information (RTI) Act has set the future for democratic governance, nothwithstanding the differences on the finer points in the law. He also said this legislation was not a substitute for good gevernance, but was intended “to support and aid the process of good governance”. Delivering his valedictory address at the conclusion of the national convention on one year of RTI, the Prime Minister said : “Whatever may be the differences on the finer points of the Act, we must all be aware of the course that we are setting for the future of democratic governance.” He said that there would always be various opinions about the interpretation and implementation of some provisions of the Act. “This is true of any legislation - particularly those that usher

in far reaching changes. In a democratic society, sometimes, it takes time for new ideas to take firm root. This is part of the learning curve any legislation has to undergo.....We need to balance the need for information with limited time, material and human resources available with public authorities. Vexatious demands should not be allowed to deprive genuine information seekers of their legitimate claims on limited public resources, he said. RTI activists were, however, complaining against the government's proposed moved to keep file notings from out of the perview of the Act. Yesterday, the Rajya Sabha member, PC Alexander said that this move would damage the spirit of the Act. The prime minister claimed that the RTI Act, taken together with the 73rd and 74th Amendments to the Constitution for ushering in local village and urban governments and the National Rural Employment Gaurantee Act

would fill Mahatma Gandhi's dream of Purna Swaraj. However, the prime minister admitted that a great deal more needed to be done. He urged the public authorities to ensure compterisation of records within a reasonable time, subject to availability of resources. Networking through panchayats, community service centres and knowledge centres down to villages was necessary to ensure people's participation in the development process, he said. He called for "genuine public interest and cautioned to guard against misue of the Act by middlemen as was the case in some countries. ------- Co-op banks to get 4.5% subsidy on loans to farmers http://www.financialexpress.com/fe_full_story.php?content_id=144100 ASHOK B SHARMA ECONOMY BUREAU Posted online: Saturday, October 21, 2006 at 0000 hours IST NEW DELHI, OCT 20: Farmers will soon get cheap loans from co-operative banks. Prime Minister Manmohan Singh assured a delegation of co-operative leaders that the Centre would provide 4.5% interest subsidy on loans directly extended to farmers by them. The delegation of co-operative leaders and Congressmen including the treasurer of All India Congress Committee (AICC), Motilal Vora, AICC general secretary Digvijay Singh, political secretary to the Congress president, Ahmed Patel, and National Co-operative Union of India president, SS Sisodia, met the Prime Minister on Friday evening. They informed him the need to help co-operative banks for extending cheaper credit to farmers.

The Prime Minister had recently urged the co-operative banks not to charge more than 7% interest to farmers. The co-operative leaders said they should also be entitled to subvention on the lines rendered to commercial banks. They demanded provision of 4.5% subvention on loans directly extended by co-operative banks. Considering that Nabard refinance for co-operative loans was being given at 2.5%, the subvention of 4.5% would enable them to extent credit with 7% interest, they said. Party Time? • Govt to provide 4.5% interest subsidy on loans directly extended to farmers by co-operative banks• The PM recently urged co-operative banks not to charge more than 7% interest to farmers• Co-operative leaders said without the subvention of 4.5%, cooperative banks can’t lend at 7% The delegation also requested Singh to consider relaxation of the

stipulation, which said Nabard refinance would be available only if the co-operative banks extend direct loans against 7% interest. The leaders, in this context, told the Prime Minister that without the subvention of 4.5% on direct loans, co-operative banks would not be in a position to lend at 7%. The conditionalities were adversely affecting all small farmers getting loans of less than Rs 100,000 provided largely by the co-operative banks, they said. The delegation also urged Singh to expedite the process of recapitalisation of the district central co-operative banks and state co-operative banks as per the recommendations of the Vaidyanathan panel report. They also told the prime minister that the share of the co-operative banks in banking business was decreasing over the past four years due to the RBI policy of not permitting existing co-operative banks to open new branches and setting up new co-operative

banks. They called for an immediate review of the RBI policy. They also demanded restoration of the benefits under section 80 (P) (2) of the Income Tax Act.--------- Revised Plan paper calls for doubling farm growth http://www.financialexpress.com/fe_full_story.php?content_id=143847 ASHOK B SHARMA ECONOMY BUREAU Posted online : Thursday, October 19, 2006 at 0000 hours IST NEW DELHI, OCT 18: The revised approach paper to the 11th Plan period has called for facing the challenge of doubling the farm growth rate to 4% from the existing 2%, recognising demographic realities, particularly the increasing role of women. It

said, “This is not an easy task since actual growth of agricultural GDP, including forestry and fishing, is likely to be below 2% for the 10th Plan period”. Despite the above stated constraints, the revised document has taken up as one of the major challenge to reverse the deceleration in farm growth rate from 3.2% observed between 1980 and 1996-97 to a trend average of around 2% subsequently. However, the constraint mentioned in the earlier approach paper relating to “no significant breakthrough in farm productivity in sight” is missing in the ‘Objectives and Challenges’ part of the revised document. The revised document pleaded the need for increasing farm incomes as this sector still employs nearly 60% of the labour force. A measure of self-sufficiency is also critical for ensuring food security, it said. It called for for ushering in a second Green Revolution to jack up farm

growth rate to 4%. According to the revised document, deceleration in farm growth rate is the root cause of the problem of rural distress that has surfaced in many parts of the country and as reflected in farmers’ suicides. Low farm incomes are due to inadequate productivity growth, often combined with low prices of produces. Lack of credit at reasonable rates has pushed the farmers into a debt trap. Uncertainties seem to have increased regarding prices and quality of farm inputs, variable weather and pests coupled with lack of proper extension services and risk insurance cover. The paper said the crisis is not purely distributional one arising out of special problems of small and marginal farmers, and landless labour. Farm growth deceleration affected farms of all sizes. Hence, corrective step is needed to focus not only on small and marginal farmers (who deserves special

attention), but also middle and larger farmers. However, the alternative suggestion of boosting farm growth by increasing the overall GDP to over 8% and investing in rural non-farm economy as mentioned in the earlier document is missing in the revised one.-------------------------------- Centre to generate 70 m jobs in 11th Plan http://www.financialexpress.com/fe_full_story.php?content_id=143849 ASHOK B SHARMA ECONOMY BUREAU Posted online : Thursday, October 19, 2006 at 0000 hours IST NEW DELHI, OCT 18: The government aims to create 70 million new jobs, reduce educated unemployment to below 5% and reduce poverty ratio by 10-percentage points during

the 11th Plan to place the economy on a growth trajectory of 9-10%. Listing out some of the monitorable socio-economic targets for the next Plan, Planning Commission deputy chairman Montek Singh Ahluwalia said the literacy rate of person above seven years would be increased to 85%. Gender gap in literacy would be lowered to 10-percentage points. He was addressing the media after the meeting of the full Planning Commission on Wednesday. Through programmes like the National Employment Guarantee Scheme, the government will work towards increasing the real wage rate of unskilled workers by 20%. Most of the targets set for the next Plan period are almost double than those of the 10th Plan. Infant mortality rate will be reduced to 28 and maternal mortality rate to 1 per 1,000 live births. Clean drinking water for all by

2009 ensuring no slip-backs by the end of the 11th Plan period. Ahluwalia said an increase of 2.5-percentage points in budgetary support for the next Plan would not be enough to finance all social sector programmes. Therefore, certain “hard decisions” like restructuring and weeding out non-performing schemes would be undertaken by the Commission to ensure easy flow of funds for performing projects. On the infrastructure front, telephone and electricity connection will be made available to all villages by 2009 and broadband connectivity to all villages by 2012.--- Ganga-basin states to get Rs 305 cr for anti-erosion works http://www.financialexpress.com/fe_full_story.php?content_id=143629 ASHOK B SHARMA ECONOMY BUREAU Posted online : Tuesday, October 17, 2006 at 0000 hours IST NEW DELHI, OCT 16: To mitigate damages caused due to annual flooding in various states,which come within the Ganges catchment area, the government on Monday approved sanction of a revised scheme amounting to Rs 305 crore for anti-erosion works on the river bank. “The cabinet committee on economic affairs (CCEA) gave its approval for the sanction of the revised scheme amounting to Rs 305 crore for taking up anti-erosion work in the Ganga basin states during the 10th Plan Period,” the official spokesperson said. Of the total amount, Rs 216 crore would be used by the various Ganga basin states, including UP,

Uttaranchal, Bihar, Jharkhand, Himachal Pradesh and West Bengal, while Rs 89 crore would be for the Farakka barrage project (FBP), she added. “While the Centre would provide 75% of the outlay in the form of grant, states would bear 25%,while the centre would fund 100% for FBP,” she said. The CCEA, also authorised the secretary, water resources to sanction projects less than Rs 3 crore based on operational consideration in consultation with the joint secretary and financial advisor, ministry of water resources.-------- Assocham: investor confidence in commodities market rising http://www.financialexpress.com/fe_full_story.php?content_id=143776 ASHOK B SHARMA Posted

online : Wednesday, October 18, 2006 at 0000 hours IST NEW DELHI, OCT 17: Commodities market has started gaining confidence of investors, according to a study conducted by the Associated Chambers of Commerce and Industry of India (Assocham). The study shows that 34% of common investors invest between Rs 5 lakh and 10 lakh per annum in commodities market while 13% of them prefers to invest Rs 10 lakh plus per annum. The survey covered 240 market players, engaged in channelising investor surpluses in various savings instruments, in Delhi, Chennai, Ahemdabad, Bangalore, Mumbai, Ludhiana and Kolkata. It points out that 24% of the respondents choose to park in the range of Rs 1 lakh to 5 lakh in commodities market. Whereas 3% respondents opt for investing in futures commodities market at amount less than Rs 1 lakh. The remaining 26% among surveyed didn’t clarify their

preference. At present 120 commodities are being traded in commodities futures market in three national commodities exchanges—Multi Commodity Exchange of India (MCX), National Commodity & Derivatives Exchange (NCDEX), National Multi Commodity Exchange (NMCEX)—and 24 regional exchanges. On an average, the daily business is Rs 15,000 crore in these exchanges which came into being about 8 years ago or so. Gold and silver are the most sought after commodity traded in commodities futures market with 32% of the respondents choosing to invest in them. These provide the most beneficial deal to its players that it offers the highest gains through hedging, thereby reducing risks from the enormous degree of volatility involved in the prices of these two precious metals. Banking On Futures • 120 commodities are being traded in commodities futures market in three exchanges• On an

average, the daily business is Rs 15,000 crore in these exchanges • 32% of respondents have chosen to invest in gold and silver• 15% of respondents chooseto invest in metals• 14% of respondents are investing in agri products • 2% prefer to invest in coffee to earn foreign exchange The survey said that 15% of respondents choose to invest in metals. This is because there is an increase in demand for metals as a consequences of real estate boom in China and India. The economic growth of these two countries are likely to boost automobile sector where metals play a crucial role. There is also a growing demand from developed nations such as US, Canada, Australia where several mines have been shut down on pollution ground. The survey also points out that 14% of the respondents are investing in agri products because there is an uncertainty in the supply and the demand for local and overseas consumption is more.

Therefore, traders are more than willing to invest in agri products and earn an assured higher profit. There exists an attractive and paying demand from overseas markets. According to the survey, 2% prefer to invest in coffee to earn foreign currencies. The consumption of coffee in India is less, however, it has a demand in overseas market which when sold earns them a good amount of foreign exchange. 28% people responded in the negative to any commodities traded by them in the market. Gold and silver are the most sought after commodity traded in commodities futures market with 32% of the respondents choosing to invest in them. These provide the most beneficial deal to its players that it offers the highest gains through hedging, thereby reducing risks from the enormous degree of volitility involved in the prices of these two precious metals. --- Rising gold impurity may push up

diamond jewellery export 5% by fiscal-end: study http://www.financialexpress.com/fe_full_story.php?content_id=143779 ASHOK B SHARMA ECONOMY BUREAU Posted online : Wednesday, October 18, 2006 at 0000 hours IST NEW DELHI, OCT 17: Rising impurity levels of domestic gold jewellery will jack up the exports of diamond jewellery and cut & polished diamonds by 5% in the current fiscal. Buyers particulary from the EU and the US are now switching over to diamond jewellery, according to the Associated Chambers of Commerce and Industry in India (Assocham). The impurity level of domestic gold jewellery is in the range of 13%-44%. An analysis of the chamber has been pointed out that

export of cut and polished diamond came down to Rs 24,121.24 crore between April and September against Rs 27,249.49 crore in April-September 2005, thus showing a decline of 11.48%. The export may increase by 5% to Rs 25,327 crore by the fiscal-end as the buyers from the EU, the US, the Middle East and others have started preferring Indian diamond jewellery to gold jewellery in view of its impurity levels which are rising. Secondly the imports of rough diamonds have come down by 1.5 to 2%, beginning October. As a result, their imports will rise comparatively lower rate to help Indian jewellers make higher value addition for diamond jewellery which will be sold off for higher gains. India imported rough diamonds worth Rs 19,960.08 crore in April-September 2005 which declined by 7.5% during April-September 2006 at Rs 18,532.88 crore. Commenting on analysis, Assocham president Anil

K. Agarwal said that 40% of our domestic diamond jewellery and cut and polished diamonds would be exported from two important hubs of Surat and Maharashtra. The demand for diamond jewellery as well as cut and polished diamond will rise by minimum 5% in the current fiscal as their buyers have been showing larger appetite for Indian diamond jewellery which is the best value addition done item. India’s gems and jewellery exports stood at Rs 36,763.03 crore in April-September 2006 as against Rs 37,079.86 crore in the corresponding period last year. The chamber’s analysis is based on the data supplied to it by Gujarat Chamber of Commerce and Bombay Chamber of Commerce and Industry besides Indian Merchant’s Chamber of Commerce, Mumbai which are the leading hub in which the highest amount of value addition is done on diamond jewellery. According to Assocham, one of the major reasons why

India has not made a significant impact in jewellery exports market is the existence of government restrictions on the domestic jewellery industry in the pre-economic liberalisation era. If gold jewellery exports were to be encouraged, it would be necessary to allow bulk imports of gold which would have to be converted to jewellery and then exported. Bulk imports of gold are now feasible and do not pose the kind of risk that existed before 1991. The prospects for increase in exports of gold jwellery and diamond studded gold jewellery have increased considerably. The gold bars form one of the important components of India’s imports of gems and jewellery. The import percentage of gold bars in 2005 stood at 7.4, while the figure in 2006 up to July is 6.6. -------------

Find out what India is talking about on - Answers India Send FREE SMS to your friend's mobile from Messenger Version 8. Get it NOW