 "Iraq crisis not to affect oil supply, says govt")
A day after stock market jitters over tension in Iraq, Finance Secretary Arvind Mayaram said India’s long-term oil supply was fairly well established and disruption was unlikely.
Brent crude oil prices hit a nine-month high of about $115 per barrel on Friday after militants closed in on Baghdad. Iraq has the world’s fifth largest proven reserves and pumps an average 3.5 million barrels of oil per day.
In reaction, the Sensex and Nifty fell 1.5 per cent each, while the rupee declined by 0.87 per cent from Thursday’s close to 59.77 for a dollar.
The finance secretary told reporters on the sidelines of a seminar on commodity futures that the government was watchful of the Iraq situation, which should blow over.
On a sub-normal monsoon, Mayaram said the met department had predicted less rain than normal, but it was not alarming. “We have strong grain reserves," he added.
The state-run Food Corporation of India held stocks of 41.6 million tonnes of wheat and 11.4 million tonnes of rice in June, much more than needed. On June 9, the met department predicted monsoon rain at 93 per cent of the long-term average. The monsoon is expected to be deficient in northwestern parts of the country, but the area is well irrigated.
On retail price inflation, which fell to a three-month low of 8.28 per cent in May, Mayaram said it was trending down and would fall further in response to measures the government was taking.
Mayaram said there was a need to develop the commodity futures market to provide price stability. “The country has gone through almost entrenched inflation for two to three years. Much of it is driven by food prices. It is important that we develop this market,” he said. Besides, there was a need to boost the food processing industry and develop an export market for farm produce, he added.
On concerns over falling volumes in commodity exchanges due to the commodity transaction tax, Mayaram said market participants should focus on addressing weaknesses of the market rather than the tax. On the pending amendment to the Forward Contract Regulation Act, he said, “Very soon we should have a new statute in place that will provide greater regulatory authority to the Forward Markets Commission."
Brent crude oil prices hit a nine-month high of about $115 per barrel on Friday after militants closed in on Baghdad. Iraq has the world’s fifth largest proven reserves and pumps an average 3.5 million barrels of oil per day.
In reaction, the Sensex and Nifty fell 1.5 per cent each, while the rupee declined by 0.87 per cent from Thursday’s close to 59.77 for a dollar.
The finance secretary told reporters on the sidelines of a seminar on commodity futures that the government was watchful of the Iraq situation, which should blow over.
On a sub-normal monsoon, Mayaram said the met department had predicted less rain than normal, but it was not alarming. “We have strong grain reserves," he added.
The state-run Food Corporation of India held stocks of 41.6 million tonnes of wheat and 11.4 million tonnes of rice in June, much more than needed. On June 9, the met department predicted monsoon rain at 93 per cent of the long-term average. The monsoon is expected to be deficient in northwestern parts of the country, but the area is well irrigated.
On retail price inflation, which fell to a three-month low of 8.28 per cent in May, Mayaram said it was trending down and would fall further in response to measures the government was taking.
Mayaram said there was a need to develop the commodity futures market to provide price stability. “The country has gone through almost entrenched inflation for two to three years. Much of it is driven by food prices. It is important that we develop this market,” he said. Besides, there was a need to boost the food processing industry and develop an export market for farm produce, he added.
On concerns over falling volumes in commodity exchanges due to the commodity transaction tax, Mayaram said market participants should focus on addressing weaknesses of the market rather than the tax. On the pending amendment to the Forward Contract Regulation Act, he said, “Very soon we should have a new statute in place that will provide greater regulatory authority to the Forward Markets Commission."