Five-Month High on Import Demand: Sugar and Cocoa also rises

Sugar extended gains, climbing to a five-month high, on speculation that countries including Indonesia, Russia and Pakistan will import more sweetener as adverse weather curbs production. Cocoa also rose.

Sugar importers in Indonesia, Southeast Asia’s largest buyer, may miss a target due to heavy rains, the government said Aug. 19. Russia’s production may be 20 percent smaller than forecast because of drought, and Pakistan said it may start buying the sweetener by December to make up for crop losses due to flooding.

“Supply conditions remain tight,” said Bruno Zaneti, a risk-management consultant at FCStone Group in Campinas, Brazil. “Also, funds are actively buying.”

Raw sugar for October delivery rose 0.12 cent, or 0.6 percent, to settle at 20.07 cents a pound at 2 p.m. on ICE Futures U.S. in New York. Earlier, it touched 20.14 cents, the highest price for a most-active contract since March 10.

Refined-sugar futures for October delivery gained $2.40, or 0.4 percent, to $577.80 a metric ton on NYSE Liffe in London. The gain was the eighth straight, the longest rally since June 16.

“We have very low stocks of sugar around the world, and we have a number of weather problems that are threatening to affect production,” said Jonathan Kingsman, the managing director of Kingsman SA, a researcher and broker in Lausanne, Switzerland.

Hedge-fund managers and other large speculators increased their net-long positions in sugar futures in New York by 6.6 percent in the week ended Aug. 17 from a week earlier, according to U.S. Commodity Futures Trading Commission data.

Cocoa futures for December delivery rose $7, or 0.2 percent, to close at $2,834 a metric ton at 12:03 p.m. in New York.

In London, cocoa futures for September delivery gained 29 pounds, or 1.4 percent, to 2,090 pounds ($3,247) a ton, rising for the first time in seven sessions.
Source: http://bit.ly/9NJdDu

Cotton Exports Without Licenses in India

the world's second-largest cotton supplier, will allow cotton exports without mandatory licenses from the next marketing year starting Oct. 1, a government order said Tuesday, likely boosting the country's shipment and prices. But the contracts for cotton exports will have to be registered with the Textile Commissioner before shipments are made, the government order said.
The government currently controls cotton exports by granting licenses for individual shipments and gets an export tax of INR2,500 per metric ton. "Exporters are going to be active, which means the market is going to be strong. Prices will firm further up in the local market," said A. Ramani, joint secretary of the South India Cotton Association.
Cotton prices in India surged 12% in August to hit a record INR33,000 ($709.7) per 356 kilograms Tuesday, extending a rally from last month when the government allowed exports of around one million bales of 170 kg each that had been stuck because of a ban, said two senior industry officials. Ramani said the unrestricted export policy will boost the supplies to China and Pakistan, which has been hit by floods. China is the largest importer of Indian cotton by volume, accounting for more than 70% of shipments, followed by Pakistan, Bangladesh and Thailand.
India in May 2010 lifted the month-long ban on cotton exports, but put in place stringent export rules by introducing a licensing system as the government wanted to strike a balance between adequate cotton supplies to local mills and fair returns to farmers. According to official data, traders shipped 7.38 million bales from Oct. 1 to July 31, boosted by a recovery in global demand. Before the ban was briefly imposed in April, exporters had contracted to ship 8.52 million bales.
In the last marketing year that ended Sept. 30, the country's cotton exports fell 60% from a year earlier to 3.5 million bales amid the global economic downturn. Ramani said Indian cotton, despite running high in the physical market, is still cheaper than any other globally competitive variety and buyers will definitely turn to India to source their requirement.
Source: http://bit.ly/a8b2iR

United States Stands to Gain Wheat Forfeited by Russia

The United States stands to gain a good share of the wheat export market that Russia is forfeiting due to the Russian government's decision to halt grain exports until the end of the year, according to John Anderson, an economist with the American Farm Bureau Federation.

The Agriculture Department yesterday released its August World Agricultural Supply and Demand Estimates or WASDE report. In the report, USDA projected a huge drop in Russian wheat exports for the 2010-2011 marketing year: 3 million metric tons, compared to 18.5 million metric tons, in the 2009-2010 marketing year. Russia decided to exit the grain export market this year because of a serious drought that is reducing crop prospects.

"This is a jaw dropping reduction in exports for Russia," Dr Anderson said. "And because the United States is expecting a good wheat crop with good stock levels, our farmers stand to take up a big share of wheat exports that would have gone to Russia." Read more

Supreme Court: Secondary Packing is not Part of Excise

In a breather to the assessees, the Supreme Court has ruled that the cost of secondary packing for the purpose of convenience of customers and transportation of goods cannot be included in the value of the goods for assessment of excise duty.
The court partly allowed the appeal of the assessee , National Leather Cloth Manufacturing. It was engaged in the manufacture of coated fabrics. The price of goods declared by the assessee in the price list, as required under Rule 173C of the Central Excise Rules, 1944 was approved by the Revenue from time to time.
However, in the two revised price lists, of November 12, 1980, the assessee indicated that prices declared by it contained certain post manufacturing expenses, which had to be excluded while computing the value of the fabric for the purpose of assessment to excise duty.
The claim was rejected by the Adjudicating Authority on January 7, 1981. Thereafter, the assessee, made a claim of consolidated refund , amounting to 40,18,805.60 for the period from November 13, 1977 to November 12, 1980, representing differential excess duty paid by it on various elements of post manufacturing expenses.
One of the deductions so claimed was on account of cost of material used for packing the final product. The Central Excise department did not responded to such claim. Then, the assessee, moved the Bombay High Court seeking direction for refund along with interest. The adjudicating authority on April 12, 1984, rejected the claim for excluding the cost of polythene bags, printed as well as plain, and hessian cloth used for packing the fabrics.
According to department, packing of coated fabrics in polythene bags for delivery to the customers located in Bombay as also packing of such rolls in hessian cloth and stitching them into one bundle for dispatch to up-country customers was in the normal course of trade and, therefore, there was nothing special about such packing so as to exclude its cost from the value of the fabric.
Then assessee amended the petition to challenge the rejection order of the authority. The high court, however, dismissed the petition and affirmed the order of the department. The high court in its order had said, the denial of deduction on account of secondary packaging from the assessable value as post manufacturing expenses was justified. It is not the case of the assessee that the secondary packing was of a durable nature and returned by the buyer to the assessee.
Source: http://bit.ly/chxblS

United States Trade Deficit Unexpectedly Rises

The U.S. trade deficit unexpectedly widened in June with exports posting the largest drop in more than a year, the Commerce Department reported Wednesday.
The trade deficit rose to 49.9 billion dollars in June, an increase of 18.8 percent from May. That was the highest level since October 2008 when the deficit stood at 59.4 billion dollars. Economists had expected a decline in the trade gap due to lower global oil prices.
Imports rose 3 percent in June to 200.3 billion dollars, while exports dropped 1.3 percent to 150.5 billion dollars, the largest decline since April 2009.
The gain in imports reflected growing U.S. demand for foreign goods and services as the economic recovery unfolds, while the decline in exports indicated that demand from overseas markets may provide less support for the U.S. economy than previously anticipated.
June's export data may bring a blow to the Obama administration's export enhancement strategy, something heavily touted by the president as a useful weapon to prop up the economy.
Obama launched the National Export Initiative during his State of the Union address in January as part of a broad economic plan to stimulate economic and job growth, with a goal of doubling exports over five years.
Source: http://news.xinhuanet.com/english2010/world/2010-08/11/c_13440659.htm

China's Export Value Hits Record US$145.52 bln in July

China, the world's largest exporter, saw its export value jump 38.1% year on year to record US$137.4 billion in July this year, according to statistics released by the General Administration of Customs.

Last month, China's imports grew 22.7% year on year to US$116.79 billion, bringing the country's foreign trade value to record US$262.31 billion in the month.

In the first seven months of this year, the country's value of imports and exports jumped 40.9% year on year to US$1.62 trillion. China exported US$850.49 billion worth of goods, up 35.6% year on year, while the import value increased 47.2% to US$766.56 billion. Trade surplus decreased 21.2% to US$83.93 billion during the period, according to the statistics.

In the first seven months, the value of exports and imports in ordinary trade increased 44.3% year on year to US$812.11 billion, including US$390.12 billion in export value and US$421.99 billion in import value.

Total bilateral trade value between the EU and China rose 36.6% year on year to US$263.16 billion, and trade value between the U.S. and China was US$207.23 billion. Japan is the third-biggest trade partner of China with total trade value of US$161.71 billion.

Guangdong Province ranked first with US$413.93 billion in terms of total trade value in the period, followed by Jiangsu Province, Shanghai and Beijing with US$255.8 billion, US$204.32 billion and US$169.52 billion, respectively.

Source: http://www.chinaknowledge.com/Newswires/News_Detail.aspx?type=1&cat=INS&NewsID=36117

Bulgaria's Export to China Up by 240% in January-May 2010

Bulgaria’s export for China grew by the staggering 238% in the first five months of 2010 year-on-year.

According to data released recently by the Bulgarian National Statistical Institute, in January-May 2009, the Bulgarian export to the People’s Republic of China amounted to BGN 50.3 M, whereas in the same period of 2010 it is already BGN 170 M.

Bulgaria exports to China some hi-tech equipment items as well as copper ores and concentrates, copper alloys, lead, wines, yogurt leavening agent, cigarettes.

In the first five months of 2010, Bulgaria’s import from China declined by 18.2%. Its January-May 2009 export amounted to BGN 420 M, while it went down to BGN 343 M for the same period in 2010.

Thus, Bulgaria still has a huge trade deficit in its trade with the People’s Republic – BGN 173 M in January-May 2010. There is, however, a notable improvement from the deficit of BGN 369 M registered in the same period of 2009.