An easier tendency was witnessed on the Mumbai bullion market last week. The announcement of an increase in gold import from 5 kg to 10 kg by the Union finance minister adversely affected the sentiment. With the beginning of the new year, overseas advices were discouraging.
However, the increase in gold import by non-resident Indians is likely to ease the supply position to some extent. Price levels are likely to move in tandem with the overseas rates.
However, there would be a drop in the import costs of NRIs. The new gold policy is not going to bring a halt to smuggling activities.
The demand at Mumbai, Delhi and Madras markets were usually taken care of by these imports and hence smuggling and havala racket would only end when such purchases stop.
Besides, the Union government has been taking swift decisions without taking into account its practical impact. This is because most of the Union ministers are uncertain of their future.
Consequently, gold values receded while silver suffered a setback due to sluggish demand and moderate supplies.
Overseas advises were discouraging, resulting in increased supplies of official silver and gold.
Standard mint gold after resuming Rs 5 lower at Rs 5,070, drifted to end at Rs 4,850 per 10 gms. Gold biscuits dropped from Rs 59,300 to Rs 57,850. Silver of .999 fineness opened Rs 30 higher at Rs 6,960.
It touched the high of Rs 7,000 to drop to Rs 6,785 and ended the week at Rs 6,790 per kg.
Oilseeds: A firm tendency in castorseed futures was the main feature of trading last week on the Mumbai oilseeds market. Bull syndicates provided support at lower rates and this resulted in firmness at the weekend. Spot prices were also on the rise on expectation that with the start of the new year fresh export demand for castor oil would commence.
Arrivals of castorseed in Gujarat has been on the rise. In view of an acute paucity of funds and persistently larger inflows, it would be hard for the bulls to rig up prices. The bears had already squared up their short positions. It was noted that in the maturing December contract, no orders had been received so far.
This indicates that most of the trading was only of speculative nature.However, the hedge facility had been fully exploited by speculators. The March delivery commenced last week at Rs 1,166, against the previous close of Rs 1,166. In initial trading activity, it dropped to a low of Rs 1,164.50 on Monday.
At this juncture, fresh support from bulls lifted the price and it touched a high of Rs 1,195 and ended the week at Rs 1,188. However, prices in the spot section ruled higher by Rs 19 at Rs 1,109 per quintal. Castor oil was up from Rs 247 to Rs 251 per 10 kg.
In edible oils, despite the beginning of the month retail demand, groundnut oil was unable to firm up due to heavy arrivals from Saurashtra. Groundnut oil moved narrowly between Rs 341 and Rs 345 over the week. The demand was also very limited.
Grains: Wheat prices remained at their high levels as fresh supplies were limited in the open market. Due to the vacillating policy of the Union and state governments, grain prices are likely to remain at the same rates as quoted now.
Despite it being the beginning of the season, rice prices, too, ruled higher. In coarse grains, prices ruled firm and so was the case with pulses.
Wheat prices are going to waver in the near future because of the government announcement that 10 kg of cereals will be provided to persons living below the poverty line at half the rates, effective January 26.
The Centre has asked state governments to issue special ration cards to implement the same.
The Maharashtra government has agreed to increase the ceilings on wheat from 300 quintals now to 1,000 quinitals for traders. However, it has not issued a notification for implementing the same. The distribution of wheat by grain dealers has also been a non-starter. Consequently, open market wheat supplies have been declining. Prices were quoted to be steady but business was very poor. FCI wheat of inferior quality was offered at Rs 775-800, Ganganagar at Rs 965-975, MP 147 at Rs 1,000-1,050 and Shihori pissi at Rs 1,200-1,600.
The activity in the rice and coarse grains markets was limited and prices ruled steady with new basmati rice quoting at firm levels of Rs 2,600-3,500.
The demand for pulses was also very poor. Prices ruled steady with gram deshi offered at Rs 1,125-1,150, gram dal at Rs 1,375-1,600 and kabuli at Rs 1,650-1,700.
Urad dal ruled quiet at Rs 2,000-2,400, while white peas were quoting at Rs 1,250-1,300. Tur dal was steady at Rs 2,600-2,800 and masoor dal at Rs 2,100-2,400 per quintal.
