Hallmark mandate for gold jewelry soon, India’s sugar output may fall due to drought conditions & crude oil supported by OPEC talk

10th Nov – 16th Nov

1. Hallmark soon to be mandatory for gold jewelry

November 15, 2018

As per the Foods and Consumer Affairs ministry, the government is planning to make it mandatory to use hallmark for any gold jewelry to be sold in India. Hallmark is currently voluntary and has three categories of 14 carat, 18 carat and 22 carat.

Source: Economic Times

2. Rice prices are up in international market over rupee decline

November 15, 2018

Domestic currency rose 0.4 percent on Thursday to its highest level in nearly 8 weeks, trimming exporters' margins from overseas sales. Meanwhile, Thai exporters eyed fresh demand from the Philippines due to increase in seasonal supply. India’s rice exports already dropped 9.6 percent to 5.8 million tonnes between April and September from a year earlier, as India’s top buyer, Bangladesh, cut purchases due to a huge local crop.

Source: Reuters

3. Crude oil finds support from OPEC talk to cut production

November 14, 2018

Rising OPEC and Non OPEC from Russia, US and Saudi and also waivers for Iran exports are intended to ease the impact of sanctions against Iran. US Crude oil inventories have expanded for four straight months and are set to continue rising, as per IEA. In this situation, OPEC and allied producers are considering production cuts as soon as next year, which has pushed oil prices higher from current levels.

Source: Bloomberg

4. Recovery in base metals possible from these lows in early next year

November 14, 2018

Copper and other metals are trading weak since the last week of April, when the US first warned of a trade war, especially with China (the largest consumer of metals). The fundamentals have not been hit as much as feared and China’s demand is still good. Analysts expect a recovery in early 2019 from the current lows.

Source: Business Standard

5. Indian sugar production is projected to drop over drought like situations

November 14, 2018

India's sugar production may drop to 30 million tonnes in the current marketing year of 2018/19 (1st Oct 2018 to 30 th Sept 2019). It was expected to be around 32.40 million tonnes, while the previous year’s production was nearly 32.50 million tonnes. It is a 7.4% drop, as crop condition becomes important as a drought has been declared in major sugarcane producing regions.

Source: Business Standard

6. President Trump tweeted and urged OPEC not to cut oil production

November 12, 2018

US President Donald Trump tweeted and urged OPEC not to cut oil production. This tweet came after Saudi Arabia aimed to cut production on declining oil prices. Even the Trump administration continues to describe the Saudis as a crucial partner in a shared bid to counter the Iranian influence in the Middle East.

Source: Bloomberg

7. Abu Dhabi National Oil Company allowed filling Indian oil reserves

November 13, 2018

Indian refiners maintain 65 days of crude storage and the country is on its way to achieve 90 days through Indian Strategic Petroleum Reserve (ISPRL). It would be a big achievement as India will have the first right to use these oil reserves in case of any supply emergency. Allowing foreign entities to use the storage helps the government save on the cost of filling the reserves. Allowing the Abu Dhabi National Oil Company (ADNOC) to store oil in Padur, Karnataka is projected to save nearly Rs. 10,000 crore.

Source: Bloomberg

8. RBI used Gold to hedge currency decline, and this is turning beneficial

November 12, 2018

RBI, which has increased its gold reserves by 8% in the first six months of 2018 in comparison to the same period last year, has benefited due to buoyant gold prices which is proving to be a perfect hedge against a depreciating rupee and protection when foreign investors are taking away money from emerging markets. When gold prices went up by 2% during 12th Oct-2nd Nov, India’s gold reserves value also rose by 1.7%, which have cushioned the Indian currency from devaluating further.

Source: Economic Times