International Business News Headlines

8/6/2019 International Business News Headlines

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PRESENTATION ON NEWSDATED 18TH JULY 2011

International Business


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Group members

y Megha Kamdar

y Amit Tripathi

y Balaji Morye

y Viraj

y Vaishali Mehta


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Indonesia Seeks Indian Investment in Infrastructure and Food Sector(FDI) (Global economy)

y Indonesia, world's fourth largest market, offers ample ofbusiness opportunities for India

especially in the areas of infrastructure development of roads, ports, and food processing sector

said Lt Gen (Retd) Andi M Ghalib, Ambassador of the Republic of Indonesia, New Delhi.

y While interacting with the industry members at a Luncheon Meeting organised by the

Confederation of Indian Industry (CII) in Chennai today (18th july , 2011), Ghalib urged the

Indian industry to explore investment opportunities in Indonesia, taking advantage of its

y proximity,

y good political relations,

y natural resoruces,

y 240-million strong market, and strategic location.

y

Earlier, JN Amrolia, Chairman, International Networking Forum, CII Southern Region in hiswelcome remarks noted that India and Indonesia had many similarities in terms of culture,

democracy, population, external policies of non-alignment, etc and complimentaries for economic

development.


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y Citing news reports Galib said that among the top 100 rich people in the world,ten are from India. And India has the market with about 350-400 millionstrong consumers with huge buying power and added that

y India and Indonesia has signed over 32 MoUs, out of which 18 are businessrelated.

y the current bilateral trade between India and Indonesia is estimated at $ 13

billion, which is expected to achieve the target of $ 25 billion by 2015.y Ambrolia said that beyond trade, the two countries can forge a strategic partnership in

addressing the challenges of climate change and creating an equitable world economic order.

y The official said that steps were being taken to soon introduce direct flightsfromGaruda, the national airline of Indonesia, to connect major Indian citiesin the southern region, including Chennai with Jakarta, Indonesia's capital and

tourist destinations like Bali. Currently passengers have to fly via Singapore orMalaysia to reach Indonesia.


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Traders maynot benefitfrom wheat

export(Global economy)

y India imposed the ban on wheat exports in 2007 to stabilisedomestic prices and contain food inflation in the country.

y The government move to lift the four year-old ban on wheat exportis unlikely to make a major impact on domestic prices as Indianprices are not at parity with global prices.

y Traders feel that the best parity in export of wheat will come forRajkot traders where the prices are ruling at Rs 1,100 to Rs 1,110 atmill delivery.

y "Traders in Kota and Indore are also expected to benefit as distancefrom these markets to Kandla port will be less.

y However, for traders in Uttar Pradesh's wheat growing belt of

Bareilly and Shahjahanpur, it will not be at parity owing toincreased wheat prices at Rs 1,200 to Rs 1,220 per quintal excludingtransportation cost," said a Mumbaibased market trader who addedthat major destinations would include South Africa, Dubai andSAARC countries.


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y In 2010 wheat production touched 82.4 milliontonne and rice production at 95 million tonne.

y As on June 1, the country's stock of wheat and rice

stood at 65.4 million tonne and 37.8m million tonnerespectively, according to the Ministry ofConsumer

Affairs, Food and Public Distribution. Domesticprices are stable and there is no excitement of export

as international prices are weak


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Australiandairieseyeing Indian market(Indian economy) (Agriculture)

y Australian milk processors & New Zealandcompanies could earn handsome profits bymarketing their products in India, which is said to be

facing shortages of up to three million tonnes a year.y Indias National Dairy Development Board

(NDDB)has forecast milk demand at 180-200million tonnes by the end of 2020.


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y Fonterra Co-operative Group, New Zealand had carrieda feasibility study of a dairy joint venture with IndianFarmers

y Fonterra is partnering with the Indian Farmers FertiliserCooperative and Global Dairy Health to complete afeasibility study on a joint dairy project.

y The trio hope to establish a pilot farm for 3,000 cows, setup one or two dairy farms in India at a reported cost of

$40 million & NDDB is supportive of the deal.y Fonterra plans to continue exporting dairy and dairy

products to India worth $200 million it has beenshipping over the last few years.


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y A planned free-trade pact between India and NewZealand by March 2012 will help the co-operative getaccess to direct customers in the country.

y Indias import taxes on milk are also high, between20-60 per cent.


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Riceexportersnowlookat Kakinadaaskeysourcingbelt(Indian economy)(Agriculture)

y double-polished parboiled rice with five per cent broken content isavailable within 100 km of Kakinada port today at about Rs 17,000a tonne.

y Adding various expenses of around Rs 3,500 towards packing,transportation, clearing and forwarding, bank and insurance

charges, port labour, etc would take the total cost to Rs 20,500 or$461 a tonne.y Inclusive of $14-15 margin, five per cent broken parboiled rice

from India is exportable at $475 a tonne, free on boardy at $480-495 from Vietnam, $510 from Pakistan and $510-540 from

Thailand.

y Indian exporters may also be able to ship out white rice with 25 percent brokens sourced from near Kakinada at Rs 16,000 a tonne.y This rice would be exportable at $450 a tonne, which is below $460-

500 price of Thai and Pakistan origin and around the $425-455range from Vietnam.


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y But the biggest worry for the Government is the possibility of rice meantfor the public distribution system (PDS) being diverted for exports.

y If the rice, instead of being bought from the market at Rs 16,000-17,000,can be sourced from the PDS at Rs 10,000 or below, there is a huge killingto be made from exports at the current world prices.

y To prevent this, the Empowered Group of Ministers EGoM has proposedfixing a minimum export price (MEP) of $400 a tonne for non-basmati rice

y The proposed $400 MEP is expected to curb the temptation' for traders tosource PDS rice that can then be exported at super-competitive prices.

y Besides the MEP, the EGoM has proposed allocation of a maximum quotaof 12,500 tonnes for each exporter within the overall 10 lt to be allowed.The quota would be only against irrevocable, confirmed letters of credit,

with the exporter also required to furnish bank guarantee for 10 per cent ofthe shipment value.


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Suzukisignalsrift with VWover partnership(Indian economy)(Automobile)

y Relations between Suzuki Motor Corp. andVolkswagen AG have soured ontheir multi-billion-dollar partnership.

y VW's purchase of a near-20 percent stake in Suzuki for $2.5 billion in December 2009was welcomed by investors who expected Volkswagen to gain an inside track intoSuzuki's leading small-car technology, while Suzuki would have access to Volkswagen's

hybrid and other advanced technologies that it would not be able to afford on its own.y Numerous reports since late last year have suggested Volkswagen was looking to bring

Suzuki, Japan's No.4 automaker, under its control.

y Suzuki Executive Vice President, Harayama said that :- It was made very clear when wetied up with Volkswagen that we did not want to become consolidated, and that we wouldremain independent,


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y And also said Volkswagen had classified Suzuki in its annual report as a company consolidatedunder the equity-accounted method over which it could have "great influence."

y "The two companies' sizes differ vastly in size, so maybe with the passage of time they get themisguided notion that they have brought Suzuki under the VW umbrella," the outspoken 81-

year-oldCEO wrote in the blog, published on July 1.

y Volkswagen, Europe's largest automaker, has ambitious plans to overtake Japanese rival ToyotaMotor as the world's No.1 player by 2018.

y On Monday, Volkswagen responded to Harayama's comments by saying it would not encroachon Suzuki's autonomy.

y

"Volkswagen and Suzuki are and will remain two independent companies. No increase ofVolkswagen's Suzuki stake has been agreed upon," he said in comments provided to Reuters by

his spokesman.


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y Thank You

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