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سپتامبر 16, 2022

Cloud over output from UP, Govt likely to restrict sugar exports

After banning exports of wheat and broken rice, the Narendra Modi government is set to take a call next on sugar.
Mills, in all likelihood, will be allowed to export up to 50 lakh tonnes (lt) of the sweetener in the new sugar year from October. Any decision on further quantities would be taken in January-February after a review of domestic production and price trends.
On May 24, the Modi government had moved sugar exports from the “free” to “restricted” category. It also capped total exports for the 2021-22 sugar year at 100 lt, which was raised to 112 lt with effect from August 1.

“They (government) are concerned about output, particularly in Uttar Pradesh where the monsoon rainfall has been nearly 43 per cent deficient and there are also reports of the cane crop being affected by red rot (a fungal disease),” a source told The Indian Express.
The current 2021-22 sugar year has seen both production and exports from India touch record levels of 360 lt and 112 lt respectively. However, closing stocks, estimated at 60 lt on September 30, would be a five-year low.
“That’s still equivalent to two-and-a-half months’ consumption (projected at 275 lt for the whole year). Also, lower production in UP is likely to be offset by increases in Maharashtra, Karnataka and Tamil Nadu, where rains have been good and reservoirs are full. But they don’t want to take any chances, especially after the latest consumer food price inflation number of 7.62 per cent for August,” the source said.

Prakash Naiknavare, managing director of the National Federation of Cooperative Sugar Factories, said that permitting exports in tranches makes sense, as it will enable mills to enter into contracts before they start production for the new year (crushing operations usually take off post-Diwali).
“The government has already sounded us out that mills can sign export contracts up to 15 per cent of their production (projected at 330-360 lt in 2022-23). We have conveyed this to our members so that they can plan accordingly,” he added.

A strategy to regulate exports after reviewing the domestic availability position is likely in 2022-23 as well.
“The notification allowing an initial quantity of 50 lt is expected in the next few days. A second tranche of 30-35 lt may follow by February, when a reasonable estimate of production can also be made,” the source said.

ExplainedAfter rice and wheatRice, wheat and sugar were three “surplus” agro-commodities. But a whittling down of the surpluses has reignited inflation concerns — and prompted the government to impose restrictions.

Mills are keen to start exports early for two reasons. The first is that the world’s biggest exporter Brazil’s sugar season is from April to November. It gives a window of exports for Indian mills, which crush from late-October to early-May.
The second is prices. White sugar for December delivery is currently quoting at about $538 per tonne. Indian sugar, being less white/refined, would fetch a $50 quality discount or $488 (Rs 39,000) per tonne.
Deducting Rs 3,500 costs (towards bagging, transport from factory to port, stevedoring, and handling) translates into an ex-mill price of Rs 35,500 per tonne. That’s more than the roughly Rs 34,000 that Maharashtra mills are realising from domestic sale of ‘S-grade’ (small-sized granules) sugar.
Indian mills have also been exporting raw sugar, which fetches a 4 per cent “polarisation” premium (for being more amenable to refining into whites) in the world market.

December raw sugar prices are now 17.97 cents per pound, corresponding into 18.69 cents or $412 (Rs 33,000) per tonne from. The expenses are also about Rs 500 per tonne lower, since raw sugar is shipped out in bulk break vessels, as against containers in the case of whites.
India’s sugar exports, which were a mere 0.46 lt in 2016-17 and 6.32 lt in 2017-18, soared to 38 lt, 59.40 lt and 71.90 lt in the subsequent three sugar years, before the all-time-high of 112 lt achieved in 2021-22.
Drought in Brazil in 2021 and in Thailand the year before – and this year’s heat wave in the European Union – have created export opportunities for Indian mills. But whether they can fully seize it now, given inflation worries back home, remains to be seen.
The Modi government, on May 13, banned wheat exports. On September 8, it prohibited exports of broken rice, besides slapping a 20 per cent duty on shipments of other non-parboiled non-basmati varieties.

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آگوست 26, 2022

Surrendering a policy: When should you do it — and should you at all?

As the pandemic hit lives, the economy, and livelihoods, 2021-22 witnessed a sharp spike in insurance policies being surrendered ahead of their maturity. Data show that more than 2.3 crore life insurance policies were surrendered during the year — more than three times the number of policies (69.78 lakh) surrendered in 2020-21.

It is ironical that at a time when one is in desperate need of his/ her money, while surrendering a traditional policy (endowment or money back), policyholders in the majority of cases end up with a surrender value that is even lower than the premiums paid.
In case of unit-linked plans, it may result in lower returns on the capital investment. It is, therefore, very important to understand the pitfalls of surrendering, and to evaluate all options before you decide to do so.
What should you look for before surrendering your policy?
The first thing that one needs to check is the surrender value. “Often, people don’t check the surrender value, and assume that the current value of the policy is what they will get if they surrender. It is only later that they realise that what they have received is much less than the current value. So one must check the surrender value before taking the decision,” said Surya Bhatia, founder, AM Unicorn Professional.
Advisers say that policyholders must also evaluate the reason for surrendering the policy, and the various options they can explore with insurance companies. Individuals must look at the reason for surrender — whether they need the money or they think they can’t make future premium payments — and accordingly make their decision.
If one is looking to surrender the policy because they believe they can’t pay future premiums, the policyholder must reconsider.

“After you finish with the minimum period of paying premiums, you have the option to either surrender or stop paying further premiums. Very often this is referred to as paid-up status, where you stop paying the premium and the benefits of your policy reduce proportionately in line with the reduced payment period, Vishal Dhawan, founder, Plan Ahead Wealth Advisors, said.
“So,” he said, “if someone needs to control future cash flows, the individual must explore the paid-up option. Many a time, paid-up options are not looked at by people, and they think that they can either continue or surrender.”
If one is in need of money, one can consider taking a loan against the policy, if the requirement is for a temporary period.
In cases where one is looking to surrender the policy to avoid risk of asset class (volatility in equity markets) in case of Ulips, one has the option to move the money from equity underlying fund to something that is debt-oriented.
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What are the impacts of surrendering a policy?
There are several pitfalls, including losing the insurance cover linked to the policy.
The biggest impact that premature surrendering has is on the return you get out of the policy, as surrender value is much less than what you can get on maturity.
There is no standard answer as to what a surrender value can be — it depends upon the kind of policy (traditional or unit linked), years of premium paid, and term of the policy.
Financial experts say that in case of money-back, endowment, and whole life plans, individuals suffer big losses on account of surrendering the policy and can lose around 50 per cent of the premium paid.
In case of Ulips, since they can’t be surrendered till the fifth year and can only be done at the end of the sixth year, experts say that there is not much loss. However, it does impact the return for the investors because of early termination of the policy.
Another impact is on the aspect of taxation. “People often miss the fact that while the policy is tax-free at maturity, if you surrender ahead of maturity, you miss out on that as it attracts tax at the marginal tax rate applicable to the individual policyholder,” Bhatia said.
Should you surrender your policy at all?
As the drawbacks of surrendering are many, financial advisers suggest that it should be one of the last options. It is advisable that when in need of money, investors should carefully look at their entire investment corpus — mutual funds, insurance policy, fixed deposits, bonds, etc. — and after understanding the implications of giving up each of them, they should figure out which one should go first, and which should be taken up last.
“When you explore all the options and take a measured approach, you will end up taking a better decision, Dhawan said. He added that “while one can still do it with investment policies, it is crucial that one doesn’t do it with term policies”.
Bhatia said that surrendering a policy should be the last resort. “Explore other options. Only in the case of Ulip plans, if the policy is not working according to the plan, you may look to surrender — but that too to reinvest in a better performing policy or other financial instrument,” he said.

آگوست 22, 2022

No renewals or new patrons: Zomato takes Pro off menu

Food tech platform Zomato is recalibrating its loyalty programs, and has closed new sign ups and renewals for its flagship program Zomato Pro, The Indian Express has learnt. The company had already shut down the more premium iteration Zomato Pro Plus earlier, and revised the terms of its co-branded credit card with RBL Bank.
The Gurgaon-based company launched Zomato Pro in 2020 and Zomato Pro Plus in 2021. The Zomato Pro program replaced the Zomato Gold membership offering. Pro members get discounts while ordering food online from or dining out at partner restaurants.
In a message to users trying to renew their expired Pro membership, Zomato says: “Thank you for being a part of the Zomato Pro program. The membership is unavailable for renewal as we are working on a new and better experience for you. We request you to check the Zomato app to stay updated on the latest offerings.”
Confirming the development in response to queries sent by The Indian Express, a Zomato spokesperson said: “While Zomato Pro and Pro Plus have been loved tremendously by our customers and merchants, we want it to be even more beneficial, especially for the most engaged customers and merchant partners.”

“We are taking feedback and working closely with our customers and restaurant partners to craft a new program. Meanwhile, we are not onboarding new members and merchant partners to Zomato Pro and Zomato Pro Plus. While active members can continue to get their benefits as promised, they will not be able to extend/renew their memberships once their membership tenure expires,” the spokesperson added.
In a separate message to the users of Zomato’s co-branded credit card, RBL Bank and the food tech platform said that September 20 onwards, it was capping the cashback from orders placed on the app using the co-branded credit card to 500 Edition Cash a day (1 Edition Cash is redeemable as Re 1 for subsequent Zomato orders).
Zomato offers 5 per cent cash back on spends done on its app. Under the new conditions, the company has also added spends done on the Blinkit app to the cashback scheme. Zomato recently acquired quick-commerce platform Blinkit, formerly known as Grofers.

ExplainedEye on newer use casesThe decision to pause onboarding of new members as well as to renew the membership of existing ones on Zomato Pro comes amid the company’s strategy of introducing newer use cases, focused more on dining out. These plans are unfolding as Zomato attempts to further narrow its losses.

These recent decisions are in line with Zomato’s new strategy of looking beyond loyalty programs to drive customer frequency. In its earnings call for the April-June quarter earlier this month, Zomato’s chief financial officer Akshant Goyal said, “I think if you have to go from where we are today and meaningfully increase customer frequency, we will have to look beyond these loyalty programs and look at introducing newer use cases, which perhaps leads to a lot of the current offline spend on restaurant food moving on to our platform.”
The company reported a consolidated net loss of Rs 186 crore for the three-month period ended June, compared with Rs 359.70 crore in the March quarter and Rs 360.70 crore in the quarter ended June 30, 2021. This, even as its topline grew to Rs 1,413.90 crore in April-June this year, against Rs 844.40 crore in the same period last year.
The company said food delivery business grew 15 per cent sequentially and saw a break-even in adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) — a measure of its operating margins.
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Zomato’s chief rival in the food tech space Swiggy too runs its loyalty program Swiggy One, which was launched in November last year.
Swiggy operates this program as a common membership for the bouquet of services it provides, including food delivery, quick-commerce and local door-to-door package delivery.
The Swiggy One program offers the app’s users unlimited free deliveries from select restaurants and unlimited free delivery from Instamart on orders greater than Rs 99 in value, in addition to other discounts and no surge fees.

آگوست 19, 2022

5G launch in sight: Telcos issued spectrum assignment letters

In what could significantly reduce timelines of network deployment by telecom operators, the Department of Telecommunications (DoT) has issued the spectrum assignment letters to telcos just 17 days after the auctions for 5G spectrum was concluded. Comparatively, in the previous auctions last year, these letters were issued more than a month after bidding ended.
Communications Minister Ashwini Vaishnaw tweeted on Thursday morning, “5G update: Spectrum assignment letter issued. Requesting TSPs (telecom service providers) to prepare for 5G launch.”
Bharti Airtel said it was provided with an allocation letter for the designated frequency bands it purchased at this year’s 5G spectrum auctions “hours after” it submitted its first tranche of upfront dues towards the airwaves to the DoT, said Bharti Enterprises founder & chairman Sunil Bharti Mittal. Calling it an example of ease of doing business, he said this has never happened in this three decade long experience with the DoT.

“No fuss, no follow up, no running around the corridors and no tall claims. This is ease of doing business at work in its full glory. In my over 30 years of first-hand experience with the DoT, this is a first. Business as it should be…” Mittal said in a statement.
On Wednesday, the DoT received Rs 17,876 crore as upfront dues from four entities that bought spectrum in the auctions that ended earlier this month. Bharti Airtel paid the highest amount of Rs 8,312.4 crore, followed by Rs 7,864.7 crore from Reliance Jio, Rs 1,679.98 crore from Vodafone Idea and Rs 18.94 crore from Adani Group arm Adani Data Networks.
As per DoT’s rules for receiving payments from the spectrum auctions, companies have the option to pay dues in 20 equated annual instalments.
However, they are also free to pay the entire amount or part of it upfront, with the minimum duration for upfront payment being two years.
On August 5, the Department had issued demand notices to all the four companies to pay up their spectrum payments in 10 days, with Wednesday being the final day.
Analysts tracking the field said that before this year, spectrum assignment was typically a months’ long process. For instance, in last year’s auctions, which ended on March 2, telecom operators had submitted their first upfront dues by March 18. But the spectrum assignment happened on April 16, almost a month later after the payments were made. In 2021, the amount of spectrum sold was worth Rs 77,814.80 crore, almost half of what was sold this year.
“Allocation of spectrum post auctions is an administrative and bureaucratic task, and it shows that the government was well prepared in this year’s auctions. Even the earlier decisions that have been taken regarding this, including issuing the Notice Inviting Applications (NIA) for the auctions that was released right after the Cabinet cleared the country’s biggest ever spectrum auctions so far, shows that everything was already in place. It points towards the government making a conscious effort to cut bureaucratic slack. Sunil Mittal is right to highlight this change,” telecom analyst Mahesh Uppal said.
Bharti’s Mittal said that the government also has assigned the company E-band spectrum “as promised”. The E-band spectrum, which is radio waves in the 70-80 GHz band, are pegged to play a major role in helping the telcos with backhaul, which will help smoothen data on their network. Last month, the DoT had agreed to provisionally allot E-band airwaves exclusively to mobile operators via the administrative route in circles where they hold 5G spectrum.
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Airtel and Jio have unveiled their 5G rollout plans, with the former saying that it will start rolling out the service this month itself and, by 2024, is expecting to cover large parts of the country, including in rural areas. Airtel has also prepared detailed network roll-out plans for 5,000 towns in India. Jio, meanwhile, has completed 5G coverage planning in 1,000 cities.
India’s biggest ever spectrum auction for 5G airwaves had ended on August 1 with bids upwards of Rs 1.5 lakh crore coming in after seven days of bidding spread over 40 rounds, belying initial expectations that the auction process would be wrapped up in under three days.
Jio emerged as the largest spender in the 5G spectrum auction, acquiring almost half of all the airwaves sold for more than Rs 88,000 crore, and was also the only one to have acquired spectrum in the premium 700 MHz band. Airtel, shelled out Rs 43,084 crore to acquire a total of 19.8 GHz of spectrum in the 900 MHz, 1,800 MHz, 2,100 MHz, 3,300 MHz and 26 GHz bands. Vi spent Rs 18,799 crore and bid for certain medium and high frequency bands. Adani Data Networks acquired spectrum only in the 26 GHz band and spent Rs 212 crore.

جولای 19, 2022

Rupee falls 7 paise to all-time low of 80.05 against US dollar in early trade

At the interbank foreign exchange, the rupee opened at 80 against the American dollar, then lost ground to quote at 80.05, registering a fall of 7 paise from the last close.

A man counts Indian currency notes inside a shop in Mumbai, India, August 13, 2018. (REUTERS/File Photo)The rupee depreciated 7 paise to an all-time low of 80.05 against the US dollar in early trade on Tuesday tracking the strength of the American currency and firm crude oil prices.

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At the interbank foreign exchange, the rupee opened at 80 against the American dollar, then lost ground to quote at 80.05, registering a fall of 7 paise from the last close.
In initial trade, the local unit also touched 79.90 against the American currency.

On Monday, the rupee for the first time declined to the low level of 80 against the US dollar in intra-day spot trading before ending the session 16 paise lower at 79.98 amid a surge in crude oil prices and unrelenting foreign fund outflows.
The rupee opened on a weaker note on Tuesday morning weighed down by outflows and high oil prices, Sriram Iyer, Senior Research Analyst at Reliance Securities said, adding that lack of intervention from the Reserve Bank of India (RBI) could also weigh on sentiments.
According to Iyer, the range for the USD/INR pair for Tuesday’s session is 79.75-80.12.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.12 per cent higher at 107.49.
Global oil benchmark Brent crude futures fell 0.35 per cent to USD 105.90 per barrel.
On the domestic equity market front, the 30-share Sensex was trading 86.4 points or 0.16 per cent lower at 54,434.75, while the broader NSE Nifty fell 26.75 points or 0.16 per cent to 16,251.75.
Foreign institutional investors were net buyers in the capital market on Monday as they purchased shares worth Rs 156.08 crore, as per stock exchange data.

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