Gas stocks up 5-7% as India wins price cut on LNG import from ExxonMobil

Shares of gas companies, Petronet LNG and GAIL, rose between 5 and 7 percent intraday on Monday as investors cheered Petronet's successful renegotiation with Australia's Gorgon project for lower LNG prices.

Over the weekend, oil minister Dharmendra Pradhan said they renegotiated the pricing of liquefied natural gas (LNG) imported from Australia's Gorgon project to make the imported fuel affordable to price-sensitive domestic customers.

India has been trying to leverage its position as one of the biggest energy consumers to strike better bargains for its companies. In 2015 it renegotiated the LNG pricing formula with Qatar's Rasgas to buy the gas at half the original price.

"Indian customers will receive (Gorgon) LNG volumes at an amicable price soon. This is done in a similar way to what we did with LNG from Qatar," Pradhan said in a tweet.
India's top gas importer Petronet LNG signed a deal in 2009 with Exxon Mobil Corp to buy 1.5 million tonnes of LNG annually from Gorgon for 20 years. At that time Petronet agreed to buy LNG at a cost equivalent to 14.5 percent of the oil price and to pay for the shipping freight as well.

Supplies under the deal began from January 2017, with the landed price of gas costing about USD 11-13 per million British thermal units (mmBtu), almost double that of Asian spot LNG prices.

The Gorgon gas prices are now linked to about 13-13.5 percent of the global oil price on a delivered basis, two sources with knowledge of the negotiation said.

Renegotiation of the deal also shows how softening oil prices and a global supply glut are forcing LNG exporters to offer better deals to retain their share in global energy markets.

At 10:18 hrs, Petronet LNG was quoting at Rs 233.80, up Rs 9.70, or 4.33 percent, on the BSE, while GAIL India was quoting at Rs 398.45, up Rs 19.10, or 5.03 percent.

Russia to boost wheat exports on expectations of record harvest

MOSCOW: The booming Russian agriculture sector is attracting new customers, with China and Venezuela planning to increase imports of Russian wheat. The country is expecting a record grain crop this year, exceeding the numbers from 1978. Four thousand tons of spring wheat will be delivered to China from Russia’s Novosibirsk region by October 10. It’s the first batch of wheat purchased by China’s largest food processor COFCO. “Together with our suppliers, we plan to discuss how to better meet the demand of Chinese mills. We want to know more about the production and the quality of Russian wheat in order to prepare for the expansion of imports,” said COFCO’s general manager for wheat Ma Lijun. COFCO is among the 500 largest global companies and is ready to import up to two million tons of Russian grain, gradually increasing to five million tons. Venezuela is also expecting to increase Russian wheat imports. President Nicolas Maduro says he plans to discuss it with his Russian counterpart Vladimir Putin. “I will talk to President Putin – very soon I’m going to Moscow – about increasing [deliveries of wheat – Ed.] to 100,000 tons,” said Maduro at a meeting of the country’s Constitutional Assembly. The current agreements is for Venezuela to import 60,000 tons per month.
Saudi Arabia, Iran, and Egypt have also expressed an interest in buying more grain from Russia, including wheat. Last year, Russia managed became the world’s leading exporter of grain, after shipping 34 million tons out of its 119 million ton harvest. According to the Moscow-based grain consultant ProZerno, the country is expected to harvest 130.7 million metric tons this year. It is 2.6 percent more than the previous record set in 1978 before the Soviet-Afghan War. Agriculture has become Russia’s second biggest export after oil and gas. The head of the United Nations’ Food and Agriculture Organization (FAO) Jose Graziano da Silva said Russia has made considerable progress in developing its agricultural sector and is now a major player in the world agricultural market.

wheat exports

Trade deficit may improve to $10.3 billion in August: Morgan Stanley

India's trade deficit is expected to improve in August to about USD 10.3 billion from USD 11.5 billion in July, largely on moderation in export as well as import growth, says a Morgan Stanley report.
According to the global financial services major, the moderation, on a year-on-year basis, is likely owing to higher oil prices and unfavourable base effects.

"We estimate a moderation of export growth to 3.4 per cent year-on-year in August from 3.9 per cent in July and imports of 11.3 per cent in August from 15.4 per cent in July," Morgan Stanley said in a research note.
The report noted that gold imports are also likely to have remained strong in August at around 61 tonnes (USD 2.5 billion), though lower than the pre-GST levels of about 130 tonnes (USD 5.4 billion).
Besides, non-oil non-gold imports, which is a proxy for domestic demand, is expected to continue to post strong growth.
According to official data, India's trade deficit stood at USD 11.44 billion in July from USD 7.76 billion in the year ago period.
Cumulative export during April-July of 2017-18 rose by 8.91 per cent to USD 94.75 billion while import increased by 28.30 per cent to USD 146.25 billion, leaving a trade deficit of USD 51.5 billion.

Meanwhile, the second part of the Economic Survey, which was tabled in Parliament in August, India's rising trade deficit and protectionist tendencies on the global front are areas to watch for in the short term.

German trade surplus narrows as imports outgrow exports in July

BERLIN, Sept 8 (Reuters) - German imports grew far faster than exports in July, narrowing the trade surplus in Europe's biggest economy, data showed on Friday.
Seasonally adjusted exports rose by 0.2 percent on the month while imports were up 2.2 percent, data from the Federal Statistics Office showed.
Both figures came in weaker than expected after a Reuters poll had pointed to exports rising 1.25 percent and imports jumping by 2.8 percent.
The seasonally adjusted trade surplus narrowed to 19.5 billion euros ($23.55 billion) from 21.2 billion euros in June. The July reading was lower than the Reuters consensus forecast of 20.3 billion euros.
Germany's wider current account surplus, which measures the flow of goods, services and investments, fell to 19.4 billion euros after an upwardly revised reading of 25.0 billion euros in June, unadjusted data showed.
The figures came after the Ifo institute said on Thursday that Germany's current account surplus is likely to remain the world's largest this year despite shrinking somewhat mainly due to higher costs for oil and natural gas imports. ($1 = 0.8280 euros)

Germany Exports Imports

China August imports beat expectations, but exports disappoint

China on Friday reported data pointing to strong domestic demand as imports beat expectations in August, although overall export growth eased.In August, China reported August exports were up 5.5 percent from a year ago in dollar terms, while imports were up 13.3 percent in dollar terms.

Analysts polled by Reuters expected a 6.0 percent rise in Chinese exports in August from a year ago in dollar terms. August imports were forecast to rise 10.0 percent in the same period.

"The strong import data suggests that domestic demand may be more resilient than expected in the second half," Louis Kuijs, head of Asia economics at Oxford Economics wrote in a note.As for exports, the headline figure points to a softening of global demand momentum, although a pickup in shipment growth to emerging Asia and the U.S. offset slower export expansion to the EU and Japan, Kuijs added.

The slowdown in export growth may be temporary, said ANZ's senior China economist, Betty Wang.

Even with the recent strength in the Chinese currency, China's role in global supply chains is unlikely to replaced in the near term as the country's export competitiveness shifts from low-value added to high-tech products, added Wang.

China's August trade balance was $41.99 billion, data from the General Administration of Customs showed.The country's surplus with the U.S. rose to $26.23 billion from $25.2 billion in July. The two countries' trade is closely-watched amid current tensions between the economic giants about trade practices.

China's economic data have been showing robust growth ahead of leadership changes later this year.

But many expect the mainland's economy to slow in the second half of the year due to a crackdown on debt and as the property market cools.

In July, China reported a 7.2 percent increase in imports and a 11.0 percent on-year rise in exports in dollar terms.

Market watchers are keeping their eyes on the health of the world's second-largest economy ahead of a key Communist Party meeting in October.

China on Friday also reported August exports were up 6.9 percent in yuan terms, while imports were up 14.4 percent in yuan terms from a year earlier, Chinese customs data showed.

Oilmeal exports surge 78%

AHMEDABAD, SEPTEMBER 6: 
India’s oilmeal exports are seen on a revival path. According to data released by the Solvent Extractors Association of India (SEA), there was a 78 per cent jump in the overall exports of oilmeals during the April-August period at 8,64,818 tonnes against 4,85,220 tonnes in the same period last year.

“In last three months, the export of oilmeals improved compared to the previous year, thanks to good monsoon, better oilseeds production and price parity,” said SEA. For the month of August, the exports nearly doubled from 71,879 tonnes in August 2016 to 1,39,568 tonnes in August 2017.

Export growth
The export of soymeals recorded steady growth since June from 45,975 tonnes to 81,079 tonnes in August, while castor seed meals dropped to 1,132 tonnes - lowest so far this year.

The apex trade body also noted that in percentage terms exports reflected improvement, but it continued to be lower compared to earlier years.
During the April-August period, South Korea was the top destination for India’s oilmeal exports with 2,88,502 tonnes, followed by Vietnam at 1,23,121 and Germany at 60,647 tonnes. While the rest of Europe imported 95,410 tonnes during the period, which is sharply up from 10,475 tonnes in the same period last year.
Sharp jump was also seen in exports to Thailand from 1,999 tonnes to 47,674 tonnes this year so far.

export of soymeals

Govt to fix 300,000 tonne import Quota for Sugar Mills in Southern India

India will soon permit import of 300,000 tonnes of raw sugar at a concessional rate of 25 per cent import duty against normal 40 per cent duty. Import is most likely to be permitted to sugar-starved mills in the southern states, where prices are Rs 2-2.50 higher than in Maharashtra.

Ramvilas Paswan, Union Consumer Affairs, Food and Public Distribution minister tweeted on Monday night that India will soon take a decision on sugar imports. He, however, did not share details of the quantum of imports to be allowed or the duty rates that would be imposed on them. 
However, sources close to the development said that the government will allow sugar imports up to a certain limit. 
"South Indian mills will get the permission to import 3 lakh tonnes of sugar to be refined and sold by mid-October," said a source. He added that a new crop sugar would enter the market by October-end and import supplies would not be able to help the mills in terms of managing the supply balance.
The government allowed import of raw sugar to mills and refineries three months back and a quota of 500,000 tonnes was fixed, along with a zero import duty to help address the crisis. While the industry is still waiting for a government notification, sources close to the development said the mills are expected to be allocated quota as last time, owing to the region's insufficient refining capacities.
As of now, sugar from Maharashtra is sold in Tamil Nadu as prices are over 5 per cent higher in the former state.

According to some industry experts, the import quota is not so high and smaller mills would be able to fire boilers just for a few days before they come to a halt again as boilers need to be fired three weeks before the usual crushing time in the region that begins from November-end and is over by December. As a result of this, not all mills might opt for the quota.

Another issue that has raised concerns among industry players is that refining raw sugar is less viable for smaller firms because it leads to higher wastage, as compared to making sugar from juice.
Last month, mills in south India had requested the government to permit them to import sugar. However, instead of allowing imports, the government had imposed a stock limit for mills last week. Sugar prices in the region, however, continued to be high, thereby, compelling the government to reconsider its position.
An indenting agent said: "The arrival of raw sugar across ports in southern India may not take much time as sugar imported by Bangladesh may be diverted to Indian ports. Moreover, raw sugar lying in customs bonded warehouses, which are typically outside domestic tariff area, will also enter south Indian mills."

Sugar Mills