Ban import of milk products: Dairy owners

PUNE: Though private dairy owners all over the country will stop purchasing milk from farmers from February 25, this is not likely to affect daily milk supply, as it is largely controlled by co-operative dairies and individual milk suppliers.

Private dairy owners, who export dairy products, have decided to stop procurement of milk from farmers, as they are seeking a ban on imports of cheaper products from countries that offer huge subsidies to farmers. Captain Amitabh Ray (retd), president of the Dairy Industry Export Organisation (DIEO), has communicated the demands in a letter sent to the Central government. However, the agitation will not affect the daily milk supply as it is largely controlled by co-operative dairies and individual milk suppliers.

Speaking to TOI, Vivek Kshirsagar, managing director of the Pune Zilha Sahakari Dudh Utpadak Sangh Maryadit, also known as Katraj Dairy, said, "A small amount of our daily procurement goes to private dairy owners, who are mostly into export of dairy products. If they are going to stop the procurement, co-operative societies like Katraj will certainly have excess milk. In this case, co-operative dairies will find a solution to utilise this excess supply."

In a letter to the Prime Minister, and ministers of commerce and dairy and animal husbandry, the DIEO demanded that duty incentive is provided for exports of milk products under the Vishesh Krishi and Gram Udyog Yojana (VKGUY), with retrospective effect from April 2008. The organisation has also demanded a cash incentive of Rs 15 per kg for export of dairy products under the duty drawback scheme.

"Apart from a ban on the import of dairy products at throwaway prices, we have sought duty incentives under the VKGUY with retrospective effect and additional cash incentives," said Ray. The agitation could create a problem as the manufacturers process about 30 lakh liters of milk every day from nearly three lakh farmers in Tamil Nadu, Andhra Pradesh and Maharashtra.

The VKGUY was launched to promote exports, mainly of agricultural produces, including value-added products. Though milk products were initially granted incentive under this scheme, the government had withdrawn it in April last year before reinstating it in December 2008, Ray said.

Currently, several countries like the US, European nations, New Zealand and Australia offer huge subsidiaries to their exporters, which results into availability of those products at a cheaper rate in India. “It is certainly against the domestic entrepreneurs,” he added.

Pointing out that the procurement of milk is impossible to continue as "Our warehouses are full with dairy products which have become unsaleable," the association has sought fast relief from the government. India exports about 1.5 million tonnes of dairy products annually while the global trade volumes of such items stand at about 37 to 40 million tonnes.

Source: http://timesofindia.indiatimes.com/Pune/

Why diamonds may not be forever

Responding to the global recession, the De Beers diamond cartel has cut back production at its South African mines and reduced the price of its rough diamonds between 15 and 20 per cent.

Even so, industry sources in South Africa estimate that diamond prices could fall another "59-63 per cent." But the real fear of the diamond cartel is not just that retail prices will fall -- it has managed that problembefore -- but that the public will begin to sell its hoard of diamonds, or what is called at De Beers "the overhang."

At the heart of this concern is the reality that, except for those few stones that have been permanently lost, every diamond that has been found and cut into a gem since the beginning of time still exists today. This enormous inventory, which overhangs the market, is literally in -- or on -- the public's hands. Some hundred million women wear diamonds, while millions of others have it as family heirlooms.

De Beers executives estimate that the public holds more than 500 million carats of gem diamonds, over 50 times the number of gem diamonds produced by the cartel in any given year. The moment a significant portion of the public begins selling diamonds, the cartel would be unable to sustain the price of diamonds, or maintain the illusion that they are such a rare stone. Or as the ad slogan claims, "forever."

As Harry Oppenheimer, who headed the cartel for over 25 years pointed out, "wide fluctuations in price, which have, rightly or wrongly, been accepted as normal for most raw materials, would be destructive of public confidence in the case of a pure luxury such as gem diamonds, of which large stocks are held in the form of jewellery by the general public."

The genius of the cartel was creating this "confidence" in the myth that the value of diamonds was eternal. In developing a strategy for De Beers in 1952,advertising agency NW Ayer noted: "Diamonds do not wear out and are not consumed.

New diamonds add to the existing supply in trade channels and in the possession of the public. In our opinion old diamonds are in 'safe hands' only when widely dispersed and held by individuals as cherished possessions valued far above their market price."

In other words, for the diamond illusion to survive, the public must be psychologically inhibited from ever parting with their diamonds. The advertising agency's brief was to make women value diamonds as permanent possessions, not for their actual worth on the market. So it issued subtly designed advertisements to foster a sentimental attachment to diamonds.

Women were induced to think of diamonds as their "best friends."The diamond-holding public, including those who inherited diamonds, had to remain convinced that the gems retained their monetary value. If they attempted to take advantage of changing prices, the retail market would be chaotic.

Even during the Great Depression of the 1930s, there was only a limited overhang, since the mass-marketing of diamonds had begunageneration before the crash. De Beers, shut its mines and borrowed to buy up someindependent mines, andwas able to weather the crisis.

Today, however, with many generations of the diamonds it mass-marketed overhanging the market, and most of global diamond production in independent hands, it no longer is in a position to balancesupply and demand.

Adding to this situation, diamond cutters, manufacturers and dealers, have, as of 10 days ago,an estimated $40 to $50 billion worth of diamonds in mines in the pipeline that will intensify the downward spiral when the gems reach the market later this year. If falling prices shatter the carefully nurtured illusion that the value of diamonds is eternal, and the public begins selling even part of its hoard, De Beer's nightmare scenario would come true: The overhang would flood the market.

Source: http://www.dnaindia.com/

Japan’s Oil Imports Fall on Sagging Industrial Output

Feb. 25 (Bloomberg) -- Japan’s oil imports fell in January for a third month as sluggish industrial output and consumer spending slashed fuel demand.

Japan, the world’s third-biggest crude oil consumer, shipped in 18.69 million kiloliters, or about 3.79 million barrels a day, last month, down 8 percent from a year earlier, a finance ministry preliminary trade report released in Tokyo today shows. Imports of liquefied natural gas dropped 0.8 percent in January to 5.9 million metric tons.

Global oil demand is set to decline a second year in 2009 because of the worsening economic outlook, the International Energy Agency forecast last month. The stronger yen and global recession are sapping demand for exports, causing manufacturers led by Toyota Motor Corp. to cut production.

Japan’s consumption of petroleum products, including automotive, industrial and heating fuel, is projected to fall 4.7 percent in the year starting April, according to the Institute of Energy Economics Japan, a government-run think tank.

Crude and fuel oil requirements by the 10 regional utilities led by Tokyo Electric Power Co. plunged in January by 55 percent and 48 percent from a year earlier, according to data last week from the Federation of Electric Power Companies.

Coal imports dropped 8.7 percent last month to 16.13 million tons, the finance ministry report shows. Utilities burned 6.4 percent less coal for power generation, while their LNG requirements slipped 5.2 percent.

Source: http://www.bloomberg.com/

Toyota, Honda Slash Global Production as Recession Cuts Demand

Feb. 25 (Bloomberg) -- Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co., Japan’s three-largest carmakers, cut global production last month as the recession and a credit crunch damped demand for new automobiles.

Toyota’s output fell 43 percent to 413,285 vehicles in January. Honda’s production dropped 33 percent to 226,551 vehicles, the most since at least 1999, and Nissan’s slid 54 percent to 145,286 units, the companies said separately today.

Japanese carmakers are slashing output and profit forecasts as the slowing economy and rising unemployment in their largest markets deters consumers from buying new vehicles. Toyota’s domestic output is being cut in half this quarter, compared with a year earlier, as exports plunge and it heads for its first operating loss in 71 years.

Japan’s exports plunged 46 percent in January, resulting in a record trade deficit, the Finance Ministry said today. Vehicle sales in Japan fell the most in 35 years last month. Industrywide auto sales in the U.S. may hit a 27-year low of 10.5 million units this year, according to a forecast from General Motors Corp.

Toyota, which tripled its loss forecast earlier this month, said Japan production fell 40 percent to 209,224 and U.S. production fell 65 percent to 38,245 units.

Honda is widening production cuts in North America by 29,000 vehicles to 1.26 million units for the year ending in March, down from an initial goal of 1.47 million. Japan production is also being cut to 1.15 million units, compared with an original plan for 1.31 million.

Nissan’s latest forecast estimates domestic production will drop 16 percent to 1.06 million vehicles in this fiscal year. Last month the Nissan said its U.S. plants will build vehicles only four days a week indefinitely.

Mazda Motor Corp., Japan’s second-largest car exporter, said global production fell 63 percent to 45,548 units in January.

Fuji Heavy Industries Ltd., the maker of Subaru-brand cars, said global production fell 32 percent to 31,654 vehicles in January. Suzuki Motor Corp., Japan’s second-largest minicar maker, said global production fell 20 percent to 177,085 units.

Source: http://www.bloomberg.com/apps/

Japan's exports plunge 46 percent in January, AS

TOKYO (AP) Japan's exports tumbled 46 percent in January, the fourth straight month of declines, as the global economic slowdown continued to sap demand for its automobiles and electronics. The Finance Ministry said Japan's trade deficit was 952.6 billion yen ($9.92 billion), its highest deficit ever according to local media reports.

January marked the fourth straight month the country was in the red, yet another troubling sign for the country's largely export-driven economy. Japan is mired deep in a recession and its manufacturers have been slashing production and cutting jobs.

Exports to the U.S. fell by over half, as car shipments were down 81 percent. Japan's trade surplus with the U.S. fell to 132.8 billion yen ($1.38 billion).

Previously, exports to smaller Asian economies had propped up Japan's trade surplus, but this is no longer the case, as exports to Asia were also down 47 percent. Japan's trade deficit with China, meanwhile, shot up 61 percent to 562.7 billion yen ($5.86 billion), as the fall of exports continued to outpace that for imports, marking the fifth straight month for a higher deficit.

Source: http://in.news.yahoo.com/

Japan's exports plunge 46 percent in January, AS

TOKYO (AP) Japan's exports tumbled 46 percent in January, the fourth straight month of declines, as the global economic slowdown continued to sap demand for its automobiles and electronics. The Finance Ministry said Japan's trade deficit was 952.6 billion yen ($9.92 billion), its highest deficit ever according to local media reports.

January marked the fourth straight month the country was in the red, yet another troubling sign for the country's largely export-driven economy. Japan is mired deep in a recession and its manufacturers have been slashing production and cutting jobs.

Exports to the U.S. fell by over half, as car shipments were down 81 percent. Japan's trade surplus with the U.S. fell to 132.8 billion yen ($1.38 billion).

Previously, exports to smaller Asian economies had propped up Japan's trade surplus, but this is no longer the case, as exports to Asia were also down 47 percent. Japan's trade deficit with China, meanwhile, shot up 61 percent to 562.7 billion yen ($5.86 billion), as the fall of exports continued to outpace that for imports, marking the fifth straight month for a higher deficit.

Source: http://in.news.yahoo.com/

Consumers can’t be fooled twice

Washington, Feb 24: A high price tag, a label, or an ingredient can trick us into believing that the mediocre product we have bought is of high-quality, but one such mistake is enough for consumers to avoid being fooled by such tactics in the future, according to researchers.

In a new study, researchers have focussed on consumer responses to "biasing cues"—features that consumers assume are related to the quality of the item.

"Often consumers'' beliefs about the relationship between an attribute and product quality are correct," wrote authors Wouter Vanhouche (University of Central Florida, Orlando) and Stijn van Osselaer (Rotterdam School of Management, Erasmus University).

They added: "For example, higher-priced products are often better quality products. However, in many other cases, those beliefs are incorrect. For example, many low-priced products are actually quite good and many high-priced products are actually quite bad. Some attributes are even just irrelevant to product quality or are completely meaningless. For example, putting silk in shampoo does not do anything for hair but consumers may nevertheless expect it to."

Earlier, researchers demonstrated that biasing cues could successfully deceive consumers into buying items.

But in the new study, the researchers wanted to find out whether the same consumers would be deceived a second time.

By using laboratory experiments involving orange juice, polo shirts, and paper towels, it was found that biased quality expectations did not carry over to a second purchase.

In fact, participants learnt from those initial judgment mistakes.

"We found that consumers'' quality judgments were actually made more accurate by the presence of such attributes. The presence of a high price on a low-quality orange juice or a Florida (vs. New Jersey) bottling location on a low-quality juice did not make the consumers more positive about the product one week after trying the product, but helped them to remember that the high-priced or the Florida-bottled juice was bad," said the authors.

Thus, marketers should keep in mind that consumers are not so easily duped.

"Marketers should think twice about trying to mislead consumers by putting high prices on low-quality products or by touting attributes that seem to signal quality but in reality are meaningless. Marketers using such attributes may succeed at getting consumers to try their products, but the misleading actions are likely to backfire at the time of repeat purchase," wrote the authors.

The study has been published in the Journal of Consumer Research.

Source: http://www.zeenews.com/lifestyle/

India sugar output may fall below trade f'cast - min

India's sugar output this year may contract more than trade estimates and the country may import up to 2 million tonnes of raw sugar, the farm minister said on Tuesday.

Trade officials have estimated sugar production in India, the world's largest producer of the sweetener after Brazil, would fall by a third to 18 million tonnes in the year to September 2009, due to lower cane output and falling yields.

"Latest figures seem to be somewhat about 16.5 (million tonnes) and carry stock, last year's, is about 10 (million tonnes)," the farm minister, Sharad Pawar, told reporters.

This month, the government eased the rules for raw sugar imports, which traders have said may amount to 1.5-2.0 million tonnes.

"Looks like about 1 million must have come or been processed, and another either half a million or 1 million there is an immediate possibility to come," Pawar said, citing estimates of the sugar trade and port officials.

Benchmark sugar prices in New York have risen on expectations of imports by India, the largest consumer of the sweetener.

Domestic prices too have risen, with those in the western state of Maharastra, the top producing region, rising to about 21-22 rupees a kilogram from closer to 16 rupees six months ago.

"We have released more than normal, but still the prices are going up. So let us see what happens," Pawar said.

On Monday India said it would impose stock limits on traders to prevent sugar hoarding and lower prices, and traders say the decision would ease the tight supply in India.

The news knocked Indian sugar futures, which breached a 3 percent circuit breaker on Tuesday, while spot prices in top producing state Maharashtra fell 1.7 percent.

"The stock limit will help cool off firm prices and will also impact the futures prices," Mohan Gurnani, chairman of the Bombay Sugar Merchants Association Ltd, said.

India last imported sugar in 2004/05.

For a graphic on India's sugar production and consumption, click: https://customers.reuters.com/d/graphics/IN_PRD0109.gif

For a graphic on India's sugar imports and exports since 1995/96, click https://customers.reuters.com/d/graphics/IN_SGIMEX0109.gif

Pawar also said his ministry would push to ease a ban on exports of wheat products.

"Value added products is one of the suggestions before us, and we'll take the same, I think," he said. "Our recommendation will be wheat products, and use the opportunity for utilisation of our own domestic capacity plus jobs."

Source: http://in.news.yahoo.com/

SEZ exporters to get tax relief

Finance Minister Pranab Mukherjee today accepted the need to rectify an anomaly in the Income Tax Act that results in lesser tax benefits to exporters in the Special Economic Zones (SEZs).

Section 10AA of the Act provides 100 per cent deduction on export profit of SEZ units for a period of five years, but computes it with reference to the total turnover of the holding company. As a result, companies having units in SEZs as well as outside used to get lesser tax benefits.

A change in Section 10AA would require would require Parliament’s approval as it concerns income tax. Mukherjee said the necessary changes in the Act would be carried out during the full-fledged Budget, expected to be presented by a new government in mid-2009.

The present definition is directly affecting companies like Infosys, Tata Consultancy Services and Wipro, which have software development centres in SEZs as well as outside.

“It has been decided to remove this anomaly through necessary changes in the Act when the regular Budget is presented,” Mukherjee said.

The amended Section 10 (AA) will compute export turnover proportionate to the turnover of the SEZ unit and not the entire company. In fact, an empowered group of ministers headed by Mukherjee had, last year, ruled the same.

Welcoming the fact that the problem was recognised in Parliament, Export Promotion Council on SEZs director general L B Singhal said, “This anomaly should be removed through a clarification by the finance ministry and subsequently through an amendment to the Act. A similar situation was observed in cases of export-oriented units and software technology parks, but it was rectified with a clarification and a subsequent amendment to the Act in 2000.”

While welcoming the move, Nasscom requested the government to create parity with the SEZ scheme for small and medium companies through extension of Section 10A/10B of the Income Tax Act.

Source: http://www.business-standard.com/india/

Nano warning: Dealers cut used car prices by 35%

MUMBAI: Close to the launch of Nano, jittery used car dealers have slashed prices by more than 25-35% in recent weeks. Industry officials say dealers are trying to move prices closer to the Rs 1 lakh-mark to be competitive with Nano.

Prices of mid-sized cars are down by over 25% and by 20% for smaller cars. Dealers are offering the four-to-five-year-old Ford Ikon, Maruti Esteem, Opel Corsa or Fiat Sienna for around Rs 1 lakh.

“When the Nano gets launched, the A and B segment (small) cars will see a further correction. Currently, the price erosion is lesser in the A and B segment used cars,” said Vinay Sanghi, chief (new business development for the after-market sector), Mahindra First Choice Wheels.

In recent months, car manufactures have dropped prices of new cars and also started offering discounts to clear inventories. This is having a direct bearing on used car prices, said a few used car dealers ET spoke to. Dealers feel customers are now looking at used cars more closely.

“Why should a customer buy a Nano base variant without AC for a lakh, when he can get a 4-5 year old mid-sized car with all the features for the same price,” said a used car dealer based in Mumbai. The Nano variant with AC is expected to be priced around Rs 1.4 lakh.

Demand for used cars has been sluggish in the recent months. Poor financing options and dull stock market trends have also kept buyers away, say dealers. Besides PSU and co-operative banks, other finance players have also stopped funding used car purchases.

“Banks have become extremely choosy about customers,” said Ayaz Fazulbhoy, a used car dealer in Mumbai. Interest rates for used cars are as high as 15-16%. Industry sources indicate that organised used car dealers are stuck with inventories and have not been able to liquidate stocks given the pressure on margins. Dealers say the launch of Nano may create some momentum in the used car market.

Tata Motors dealers are expected to start bookings for the Nano this month. Company officials indicate that Tata Motors may be able to stand by its promise of launching Nano at Rs 1 lakh before the end of the financial year. Officials close to the project said there may not be too many takers for the base version of Nano and most consumers may opt for the AC version.

Source: http://economictimes.indiatimes.com/