MCX to follow FMC guideline from July 15

NEWS CAPSULES

MCX has extended the date for implementation of Pro-Account guidelines issued by Forward Markets Commission to July 15 from July 1, the exchange said in a circular.

In May, FMC had banned commodity exchange members from trading on their proprietary accounts from more than one place, and from more than two terminals, to avoid the systemic risk that could arise out of the misuse of trading in proprietary account from more than one location.

FMC has sought the compliance of the exchanges on this issue by May 31 to enable implementation of the guidelines from July 1. MCX has taken FMC's approval to extend the date to July 15, an official said.

Crude oil basket eases to $70.56/bbl

The country's crude oil basket on Tuesday eased to $70.56 a barrel, a day after it hit an all-time high of $71.33 a barrel, data form petroleum and natural gas ministry said on Wednesday.

The country's crude basket had earlier hit a high of $71.13 on May 2. With global crude prices inching towards the $75 a barrel mark, alarm bells have started ringing for Indian consumers.

Government has allowed oil marketing firms to raise prices of petrol, diesel and kerosene if international crude prices top $75 a barrel. However, details on price determination are yet to be worked out.

The country's crude basket averaged $70.95 a barrel in July so far compared with $66.95 in June and $67.29 in May.

The basket comprises Oman-Dubai sour grade of crude and Brent dated sweet crude in a 58:42 ratio.Brent crude closed at $72.61 a barrel, while the Dubai and Oman benchmarks were at $68.56 and $69.60, respectively, the data said.

Coffee prices to rise globally

World coffee prices should increase toward the end of 2006 thanks to prospects for tight supply next year, though this year's copious crop from top coffee grower Brazil may weigh on prices in the near term, a Reuters poll showed on Wednesday.

The New York Board of Trade's benchmark arabica futures contract was projected to climb 16 percent to $1.20 per lb by the end of the year, according to the median estimate in a poll of nine analysts and traders.

The arabica, the variety used in premium coffees, opened Wednesday at $1.0350 per lb, near the bottom half of this year's trading range from 95.85 cents to $1.3175 per lb "" basis the September delivery.

In London, the benchmark robusta contract was seen rising to $1,400 per tonne by the end of the year from an estimated $1,345 per tonne by the end of third quarter 2006.

So far this year, robusta, typically used for soluble coffee, has been trading from $1,115 to $1,353 per tonne - basis September. Respondent forecasts for robusta by the end of 2006 ran from $1,200 to $1,68 and ranged from 82.5 cents to $1.45 for arabica.

Both markets have been buoyant over the past week following several weeks of heavy selling by speculators and funds.

With global supply and demand near a balance, coffee roasters appear to be buying on a scale-down basis while producers await higher prices to sell, respondents said.

That scenario has given the speculators and funds the upper hand in the market, making it difficult for analysts and industry to anticipate price direction.

"They (funds) are the only ones playing the market with any volume at all," said James Cordier, president of Liberty Trading Group, a Florida-based commodities brokerage.

"All they are trying to do is push the market in the direction most easily traveled "" irregardless of what their fundamental analysis might be," he said.

The median estimate from the poll put 2006/07 world supply of robusta and arabica coffee at 122.5 million 60-kg bags, paving the way for a surplus of 4 million bags based on median demand of 118.5 million bags.

Bio-diesel producers urge import duty cut

Bio-diesel producers on Tuesday urged the government to reduce import duty on palm oil and increase the selling price of bio-diesel to make the industry competitive.

They also asked the government to allow the industry to sell bio-diesel outside petrol pumps. India will have an installed capacity of producing about 200,000 tonne of bio-diesel per day within the next two years.

The raw material for the commodity is, however, hard to obtain, Bio-diesel Producers Association of India President Raju Manaksinghka told reporters.

He said though government has started promoting cultivation of jatropha, main feedstock for bio-diesel manufacture, its plants will take at least 4-5 years to mature. In the meantime, the industry will have to depend on imported palm oil and its fatty acids.

He said the association has also urged government to increase the selling price of bio-diesel, currently sold at 25 rupees per litre.Association member, Dinesh Jain said the flashpoint of bio-diesel is 130 degrees Centigrade compared with 50 degrees for petrol.

May fertiliser output at 2.08 million tonne

Indian fertiliser companies' output in May stood at 2.08 million tonne, 4.1 per cent below the targeted 2.17 million, a government release said on Tuesday.

Total availability of fertilisers during the month was, however, satisfactory, it said. Urea production in May is estimated at 1.71 million tonne compared with the target of 1.74 million tonne, while di-ammonium phosphate output is pegged at 371,000 tonne compared with the targeted 431,000 tonne.

The release said urea output in May could have been much higher but for the unscheduled shutdown at Indian Farmers' Fertiliser Cooperative's Kalol and Phulpur units and low production at Madras Fertiliser's Chennai, Babrala and Shahjahanpur units due to equipment breakdown.