Oil rises above $109, Iran in focus

(Reuters) - Oil rose above $109 a barrel on Friday as rising tension over major oil exporter Iran and a report showing the U.S. economy created more jobs countered concern about the euro zone debt crisis.

The EU and U.S. tightened their sanctions against Iran on Thursday in response to mounting concern over Tehran's nuclear work, increasing concern over a possible disruption to oil flows from the second-largest OPEC producer.

"The Iranian situation is one of those things that could have a really bullish potential impact," said Tony Machacek, energy broker at Jefferies Bache in London.

"At the moment, it's a supportive factor and one of the issues that makes you think the market won't come off too far from here even if there is more economic doom and gloom all of a sudden."

Brent crude rose 45 cents to $109.44 a barrel by 1349 GMT, down from an intra-day peak of $110.41. U.S. crude climbed 40 cents to $100.60.

For the week, Brent is heading for a more than 2 percent gain. U.S. crude is poised for a rise of over 3 percent, its first weekly gain in three.

In a further sign the U.S. economic recovery was gaining momentum, employment growth picked up speed in November and the jobless rate dropped to a 2-1/2 year low of 8.6 percent.

Nonfarm payrolls increased 120,000 last month, the Labor Department said on Friday, in line with economists' expectations for a gain of 122,000.

On Thursday, the Institute for Supply Management said U.S. manufacturing activity rose to its highest in five months, following earlier data on consumer spending and private-sector job creation that were also positive.

"Data out of the U.S. has been strong and that has helped support oil prices. The market wants to move higher, but is reluctant to, unless it sees a clear resolution to the euro zone crisis," said Victor Say, analyst at Informa Global Markets in Singapore.

In Europe, whose sovereign debt problems have weighed on oil prices for months, the European Central Bank signalled on Thursday it stood ready to act more aggressively to fight the region's crisis if political leaders agree next week on much tighter budget controls.

With sanctions against Iran being tightened, the prospect of disruption to its oil supplies remained in focus, possibly as a pre-emptive move by Iran.

"The political process (to impose sanctions) will take time, but if Iran sees a loss of income as inevitable, there is a greater risk that it takes what limited political and economic capital it has to the negotiating table by invoking a pre-emptive export ban," analysts at JP Morgan said in a report.

While such a move was likely to trigger the release of strategic reserves, the initial market shock could boost prices by $20 to $30 a barrel, the report said.

Royal Dutch Shell said on Friday it would cease operations in Syria, a much smaller oil producer than Iran, to heed new European Union sanctions against Damascus.

(Additional reporting by Francis Kan in Singapore; Editing by William Hardy)

curtsey : http://in.reuters.com 

India fertilizer prices surge 65% in June-Nov 2011

NEW DELHI : Due to high global prices and weakening of rupee, the imports of the fertilizers have turned to be costlier. The price of di-ammonium phosphate (DAP) shot up 65% to Rs 18, 500 per ton from Rs 11,000 in June 2011.

The rupee has weakened18% January to November period 2011. The rupee was around Rs 52 against the Dollar on Thursday 24th November.

The Indian Farmers Fertilisers Cooperative Ltd (IFFCO) is negotiating with global fertilizer players for discounts and the some of them have agreed for 5% discounts, reported The Business Line.

According to the IFFCO, there are no plans to hike the Maximum Retail Price (MRP) of the commodity till March 2011.
Earlier, in 2010, the government had de-controlled the price of the non-urea fertilizers by introducing the Nutrient Based Subsidy (NBS).

The DAP and NPK (Nitrogen, phoshorus, potash) are the major fertilizer used in India.

India's sugar consumption to exceed production by 2020

NEW DELHI  : By, 2020-21, Sugar consumption in India is forecast to rise 31.3 million tons, while the production is estimated to be around 26.4 million tons, according to Narendra Murkumbi, Indian Sugar Mills Association (ISMA).

During 2010-11, India's production stood at 24.4 million tons and consumption was 21.7 million tons.

According to ISMA, the increased usage brought about by the lifestyle changes due to the present surplus sugar production, reoported The Wall Street Journal.

The gross domestic product growth and lifestyle changes is said to increase demand for Sugar and processed foods.
Limited availability of irrigated lands and the increased contruction activities on the farm lands by the major construction firms etc is also pulling down the production capacity of the country.

India is the world's biggest sugar consumer, with its 1.2 billon people.

On NCDEX, the sugar for December contract traded down 0.63% to Rs 3010 on 30th November at 11:00 IST.

In FDI fiasco, who cares for consumers and producers?

The debates on FDI in Indian retail space have involved one and all except two of its biggest beneficiaries – Producers and Consumers.

Producers – who gives you the product to sell and consumers who buys them. The entire focus is now on the fringe but very important people in between these two major super powers. And the so called super power has no option but to see this entire drama being unfolded.

Let’s take fast moving consumer goods which include perishable items like dairy, vegetables, fruits and other processed foods and leave clothes, toys, televisions, mobiles and other fancy items out of this debate.

According to some studies, current size of organised retail in India stands at around $28 billion, nearly 7 per cent of the total retail market. This retail market as a whole is estimated to grow to $1.2 trillion by 2020, of which 21 per cent will be organized.

If you can’t make out what you are going to benefit from these figures, no one else can. Very simply told, the ultimate grain of truth is that the producers are looking for market and demand while the consumers are looking at competent price. Who cares for these big institutionalized studies if this mission is accomplished?

The entire backbone or the lobby behind the opposition to FDI in retail has different dimensions. The Left parties oppose it because they are born to oppose anything and everything that has ‘Foreign’ word in it though their own ideology is itself foreign. Their usual rhetoric of joblessness continues even today. The BJP and other right wing or supporting parties oppose because their mainstay in financial help are fringe but very important traders and middlemen.

The support base that many parties get from Baniyas and business community is enormous. They cannot afford to lose them.

This community will make life hell for procurement as seen during the Milk Revolution. When Amul started procuring milk from villages, these very middlemen created ruckus but it was the will power of farmers in Gujarat that the entire chain was broken. Their economy improved and consumers now can get milk round the clock making the country self sufficient in milk.

In the same way, there are brokers, dalals, transporters, Agricultural Produce Marketing Committee (APMC) besides the bunch of politicians acting on behalf of the strong traders lobby which will make multinationals run for their money.

This loyalty transcends parties as can be seen from Kerala Pradesh Congress Committee (KPCC) Chief Ramesh Chennithala’s opposition to FDI. His mass base consists of traders- or plainly told the all powerful Central Kerala belt - who doesn’t want their monopoly eroded.

So let’s see how FDI in retail will benefit the producers and consumers. To remain in business all retail giants have to reduce their prices and increase their quality and give consumers happy experience of shopping. It is not possible for them to replicate a Kirana store in terms of locations. They can have one or two stores in each cities. Why should you leave your neighbourhood kirana store to go to these retail chains 5 to 7 kms away? It is the shopping experience and quality and quantity. To do this they need to set up operations that involve heavy capital expenditure. However, this is a onetime investment. What they will recur are wages and the biggest challenge is to procure best quality items at the most competitive price.

The procurement will Lead them directly to the producers cutting at least ‘three to four middlemen’ in between. They will start negotiating with producers – which involves farmers, manufacturers etc – for better price. In the end they benefit in procurement price and quality and producers benefit from guaranteed supply and price discovery. The buyers will be happy getting far superior product at the best shopping platform.

So where is the problem? Who is at disadvantage from this entire process? They are the ‘three to four middlemen’ in each process of current system of procurement. They are the political base of almost all the political parties whom none want to antagonize.

The entire crusts of this opposition are these people. Who cares for the super powers?

Gold,silver end lower again for the week

US gold futures took up some pressure in reaction to rising dollar as gold for December delivery slipped 0.6 percent or $10.20 to settle at $1,685.70 per ounce.

NEW YORK: Gold closed lower again this week here as comex gold futures exchange closed earlier than usual Friday, having been shut for Thanksgiving Thursday, as US shoppers hit the stores in search of Black Friday discounts.
US gold futures took up some pressure in reaction to rising dollar as gold for December delivery slipped 0.6 percent or $10.20 to settle at $1,685.70 per ounce.
The respective contract was down 2.3 percent for the week. Silver futures for December delivery fell 2.7 percent or $0.87 to $31.01 per ounce with decline of 4.3 percent for the week.
Copper for the same month delivery fell 0.3 percent or $0.01 to $3.27 per pound resulting in weekly losses of 3.8 percent.
Platinum futures contract for January delivery declined 1.6 percent or $25.50 to $1.533.10 per ounce while for the week the respective contract fell 3.5 percent.
Palladium for December delivery plunged 3.4 percent or $19.75 on Friday to $570.10 per ounce while its fell 5.8 percent for the week.

Copper Heads to Fourth Weekly Drop on Europe Crisis: LME Preview

By Maria Kolesnikova

Nov. 25 (Bloomberg) -- Copper fell, heading for a fourth weekly decline, after Germany ruled out joint euro-area borrowing and an expanded role for the European Central Bank in fighting the region’s debt crisis.
Market News:
-- Asian stocks declined, dragging the region’s benchmark index to a fourth straight weekly loss, while the dollar gained and bond risk increased on concern European leaders are struggling to contain a sovereign-debt crisis. NSN LV7D360YHQ0X <GO>
-- Hungary lost its investment-grade rating at Moody’s Investors Service after 15 years as the Cabinet seeks International Monetary Fund help to boost confidence in the European Union’s most-indebted eastern member. NSN LV6T726TTDS0 <GO>
-- European Central Bank Executive Board member Jose Manuel Gonzalez-Paramo urged euro-area politicians to take bold steps toward fiscal union to end the debt crisis, and said they should not rely on the ECB. NSN LV6SKV6JIJUT <GO>
-- China’s sovereign wealth fund may give “indirect” support to Europe through investments without being the nation’s main route for any aid, said Jesse Wang, the executive vice president of China Investment Corp. NSN LV73006JIJUO <GO>
-- The dollar climbed against most major peers, extending this week’s gains, as investors sought the safest assets on concern economies in the euro area will worsen as leaders struggle to halt the region’s debt crisis. NSN LV7EXF6JIJUO <GO>
-- Oil headed for a second weekly loss in New York as speculation Europe’s debt crisis threatens its economy countered concern that violence in Saudi Arabia may destabilize the world’s biggest crude exporter. NSN LV7B7D6S972B <GO>
Metals News:
-- Copper supply shortages, which have been driven by operational problems and labor strikes in South America and Indonesia, are likely to persist next year, said OZ Minerals Ltd., Australia’s third-biggest producer by market value. NSN LV77TE0YHQ0X <GO>
-- OZ Minerals Ltd. expects long-term copper prices to be around $2.50 a pound. NSN LV70E26K50ZJ <GO>
-- Japan’s output of copper and copper-alloy fabricated products, including sheets and tubes, declined 11.5 percent in October from a year earlier. NSN LV6YKD0UQVI9 <GO>
-- The exploration joint venture between Aluminum Corporation of China Ltd.’s state-owned parent company and Rio Tinto Ltd. will officially begin operations in China. NSN LV7AJ96TTDSQ <GO>
-- China will soon release a plan to develop the nation’s nonferrous metals industry over the five years through 2015, Shanghai Securities News reports today. NSN LV6XAL6JIJUO <GO>
Other Markets:

Last % Change % YTD U.S. Dollar Index 79.227 0.2 0.3 Crude oil $96.33 0.1 5.4 Gold $1,686.23 -0.5 18.7 MSCI World Index 1,098.46 -0.1 -14.2

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METALS-Copper posts 4th weekly fall on global demand fears

* Deepening euro zone debt crisis spurs copper demand fears
    * Aluminium under pressure as financing deals falter
    * Coming up: U.S. new home sales Monday

    By Frank Tang and Susan Thomas
    NEW YORK/LONDON, Nov 25 (Reuters) - Copper fell on Friday on a
dollar rally, as the industrial metal notched a fourth consecutive
week of losses on global demand fears amid a deepening euro zone
sovereign debt crisis.
    Highlighting global recession worries caused by the European debt
contagion, Italy paid a record 6.5 percent to borrow money over six
months, sparking a sell off in global markets. The S&P 500 index
posted its worst weekly performance in two months.
    "European demand for copper is falling off the face of the earth
right now. There are also concerns over China's slowdown. All of
those factors are contributing to the ugly bear channels on copper
charts, with the metal trading below key moving averages," said Frank
McGhee, head precious metals trader of Integrated Brokerage Services
LLC.Three-month copper on the London Metal Exchange ended at
$7,230 a tonne, down from a last bid of $7,265 a tonne on Thursday.
LME copper lost around 4 percent this week and touched a one-month
low of $7,100.25 on Thursday.
    U.S. copper futures for December delivery settled down 90
cents at $3.27 a lb. Volume was 25 percent above its 30-day norm
despite an early U.S. market close in observance of the Thanksgiving
Day holiday.
    Four consecutive weeks of falls in copper have wiped close to 9
percent off the price of copper in the month to date. It is trading
around 24 percent lower on the year.
    Investor anxiety remained high in Europe even though France and
Germany agreed on Thursday to stop arguing over whether the European
Central Bank should do more to rescue markets in the 17-nation
currency bloc.
    Three-month aluminium ended at $1,993 a tonne from a last
bid of $2,018.15. The price has been hovering close to its lowest
since July last year of $1,982.25.
    "Aluminium is demonstrating the worst fundamentals at the
minute," said Natixis analyst Nic Brown. "In the here and now with
what's going on in the financing side, aluminium is more vulnerable
than other metals."
    Traders have said more than 1 million tonnes of global aluminium
stocks are expected to be released from financing deals as credit
tightens.
    Reflecting tight credit conditions, an executive at British-based
trading house Stemcor told Reuters metals trading companies face
increasing funding costs and counterparty risk as the banks' funding
crisis threatens to spread to the industrial sector.
    In other metals, tin closed at $20,700 from $20,350 and
battery material lead ended at $2,004 from $1,992.
    Zinc closed at $1,910 from $1,888. Nickel did not
trade at the close, but bid at $16,950, down from a close of $17,075
on Thursday.
Metal Prices at 1:00 EST (1800 GMT)
 Metal            Last      Change  Pct Move   End 2010   Ytd Pct
                                                            move
 COMEX Cu       327.00       -0.90     -0.27     444.70    -26.47
 LME Alum      1991.00      -32.00     -1.58    2470.00    -19.39
 LME Cu        7230.00      -10.00     -0.14    9600.00    -24.69
 LME Lead      2003.00       11.00     +0.55    2550.00    -21.45
 LME Nickel   16950.00     -125.00     -0.73   24750.00    -31.52
 LME Tin      20700.00      350.00     +1.72   26900.00    -23.05
 LME Zinc      1909.00       21.00     +1.11    2454.00    -22.21
 SHFE Alu     15810.00      -70.00     -0.44   16840.00     -6.12
 SHFE Cu*     53590.00     -850.00     -1.56   71850.00    -25.41
 SHFE Zin     14835.00     -190.00     -1.26   19475.00    -23.83
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07

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