Bullion prices have nosedived in the midst of the festival season in Mumbai last week. Keenly awaited imported policy announcement have been made and at the same time prices have also crashed abroad, causing heavy downfall here.
Though India is all set to remove the controls on gold, allowing free access, traders are confused about the mode of operation. How will banks import gold and distribute the same in the country?
It is felt that the banks will have to purchase special import licences to import gold. Presently, the sale of gold by recognised agencies had been confined to jewellery exporters other than retail channels.
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Standard mint gold commenced last week at Rs 4,470, on a steady note but in the absence of good festival demand and quiet overseas advices the opening rate became the high of the week. With the steady fall in prices abroad coupled with the announcement of the liberalised import policy it dived to end at a low of Rs 4,390 per 10 gms.
Values are expected to stabilise soon. However, overseas gold dipped to $325 per ounce and hence sellers were predominant fearing a further set-back. Gold 22 carat fluctuated between Rs 4,135 and Rs 4,060.
Gold biscuits lost Rs 900 at Rs 51,600. Ready silver resumed at Rs 15 lower at Rs 7,350 and rose to Rs 7,380, early in the week but dropped to Rs 7,010 to close at Rs 7,040.
Oilseeds weekly: A modest rise in castorseed futures and spot rates provided the main feature of trading on the Mumbai oil seeds market last week.
In edible oils, groundnut oil recovered sharply due to good festival demand as well higher Saurashtra advices.
In castorseeds the prospects are bright both in Gujarat and the South.
Bulls still prefer to have limited long position for the time being and after ascertaining the production facts as well as export demand for castor oil intend to be aggressive.
At present, price fluctuations indicated a pattern in Ahmedabad contract only. The Ahmedabad contract was ruling Rs 22 higher than that in Mumbai but it has now dropped to Rs 17.
Efforts to increase spot prices have been unsuccessful as the export demand for oil has not been upto the mark. The Brazil supplies has attracted overseas buyers more thus deferring buying form India.
In edible oils, with the start of the new crop groundnut it would be difficult to maintain higher levels when supplies would be high. As a reflection of the crop position even traders have offered forward deliveries as low as Rs 300 per 10 kg.
It is unlikely to even touch the level in view of likely downward revision of the oilseeds crop.
Groundnut oil after starting week at Rs 342, Rs 6 lower than the previous level on good demand and higher Saurashtra advices went up to a high of Rs 357 per 10 kg. Palmoleine was offered between Rs 268 and Rs 264 over the week. Malaysian palm oil prices have been ruling higher in view of currency devaluation.
Castorseed December commenced last week Rs 2 higher at Rs 1,164.50 and on Monday receded to the low of Rs 1,160.50. On higher Ahmedabad and spot advices and bear covering the contract touched a high of Rs 1,172 to be finally placed at Rs 1,168.50.
Ready castorseed Madras small rose to Rs 1,195 to end at Rs 1,190. Commercial castor oil ruled at Rs 268.
Grains weekly: An easier trend prevailed in coarse grains. The start new crop jowar, bajra and maize provided the main feature of trading on the Mumbai grains market last week.
Prices ruled steady for cereals but in pulses, after recent very low bottom prices some recovery had been noticed in seasonal demand in urad and peas. The activity was at a low ebb.
Punjab moist inferior wheat ruled steady at Rs 580 to 600, Ganganagar At Rs 700 to 725 and M P -147 at Rs 675-700 per quintal. Shihori Pissi ruled at Rs 800-1,200, according to quality. With the lean months ahead, the sentiment was better.
Expectation of increase in wheat prices by the Food Corporation of India also restrained sellers to offer lower rates.
Activity in rice was limited. New crop arrivals would start after Diwali at various centres of Maharashtra, Gujarat and North India.
However, even with the start of new crop marketing, the demand for old rice remained fetching higher prices. Consequently, sellers were not interested in disposing of old rice at lower levels.
SL0 old ruled at Rs 900 to 1,000 and new at Rs 875 to 900. Gujarat -17 ruled steady at Rs 1,600 to 1,700, Kolam at Rs 1,700 to 2,100 and Basmati at Rs 3,800 to 4,300.
In coarse grains, new crop jowar H-5, H-9 and Dhiri line had started arriving resulting in distinct fall in prices.
H-5 ruled at Rs 400 to 450 and H-9 at Rs 500 to 525. However, Sholapur old ruled unchanged at Rs 600 to 800.
New crop bajra from Uttar Pradesh had arrived but due to inferior varieties it was disposed off at lower rate of Rs 450 best bold U P was not available. Gujarat bajra fetched Rs 450 to 500 and Maharashtra Rs 500 to 600.
With the new crop arrivals, maize for cattle feed ruled weak at Rs 400 to 450 and Gawran at Rs 575 to 600.
Among pulses, gram deshi was steady at Rs 1,425-1,450, gram dal at Rs 1,750 to 1,900. Kabli gram was easy at Rs 1,400 to 1,600 due to good imported supplies.
Urad was better at Rs 925 to 1,000 and urad dal at Rs 1,550 to 1,700 due to good festival demand.
Peas green was demand higher at Rs 1,350 to 1,375 and white at Rs 1,100. Tur was demanded higher at Rs 850 to 1,000.
In view of steep rise recently, now prices had been on the recovery path on demand.