Rising Exports, Output Cheer Tea Sector

There is dome cheer in the cuppa as the India n tea industry is on a comeback mode with production and exports, increasing despite competition from several countries such as Vietnam and Bangladesh, Data available from the Tea broad indicate that exports rose about 18 million kg (mkg) to 124.04 mkg till August this year, compared with the corresponding period last year.

ON THE BUOY
“The mood is buoyant as the Indian tea industry now beginning to look up. Overseas demand is on the rise and prices are firming up owing to good quality teas, besides shortage of teas in the world market,” an industry source told Business Line, Pakistan,Egypt, Iran AND Iraq and West Asian countries occupy the permanent slot in the export list.

Besides these countries, Kenya itself has been buying from Indian to meet its export obligations, While Pakistan has also begun to buy some quantities to meet the shortage arising out of Kenyan Production troubles.

RISING OUTPUT
On the production front, the country produced 123.1 mkg during August 2008 as against 116.3 mkg during the corresponding period last year. For the
January –August 2008 period ,production has been estimated at 599.7 mkg tea against last year’s 576/1 mkg.
During August this year, south Indian output dropped to 14.1 mkg (15.6mkg), while north Indian production rose to 109 mkg (100.7mkg).However, the period from January to August this year saw south Indian production rise to 155.1mkg (140.7mkg) while north Indian output stood at 444.6 mkg (435.4mkg).
Tea production this year has been pegged at 960-970 mkg. compared with 955 mkg’Produced last year. Besides increasing exports and production, rising prices for tea at various auctions across the country are also spelling good times for the industry.

Trade with Brazil targeted at $10 Billion in 3 years

Looking at trebling bilateral trade to $.10 Billion in three years, India and Brazil discussed measures to achieve this target. Mr.Kamal Nath, Union Commerce and Industry Minister, had a meeting with the Brazilian Minister of Development, Industry and Foreign Trade, Mr.Miguel Jorge, to discuss ways and means to achieve a three-fold rise in bilateral trade from the present level of $.3.12 billion.

The two Ministers also reviewed the global economic slowdown and how the two emerging market economies could maintain their growth rates.

Spices exports set scorching pace to overtake fiscal target in 11 months

Spices exports have corssed the fiscal target fixed by the Spices Board in February itself. Exports have exceeded the target by 107 percent in dollar terms, by 105 per cent in rupee terms and by 99 per cent in volume terms. During April-February 2007-08, around 3,77,000 tonnes of spices and spice products valued at Rs.3,785.40 crore ($.940.47 Million) were exported. The target fixed bythe Board for the fiscal was 3,80,000 tonnes valued at Rs.3,600 crore ($.875 million).

Exports registered an increase of 16 per cent in volume and 19 per cent in rupee value terms (34 per cent in dollar terms), when compared to the same period of 2006-07. Exports of pepper, chilli, curry powder and mint products exceeded their respective targets both in terms of volume and value. Exports of coriander and cuminseed exceeded the target in value terms and those of vanilla in volume terms. Exports of pepper went up by 20 per cent in volume and 68 per cent in value, as against 26,415 tonnes valued at Rs.276.79 crore in 2007-07.

Plea to waive export ban on premium Oils

Edible oil traders have urged the Union Government to exempt premium oils from the Export ban as also non-conventional oils, like rice bran oil.

"The edible oils exported are of premium quality only, which contitutes less than half a percent of the total consumption", a Solvent Extractors' Association of India (SEAI) spokesman pointed out.

Traditionally, small volumes of premium (conventional) edible oils like coconut oil, sesame oil and mustard oil in consumer packs are exported. Also exported are vegetable fats like sal, mango kernel and kokum, which are used as cocoa butter substitutes in the manufacture of chocolates.

It had taken the trade many years to make in-roads into global markets. Indians settled abroad purchased the oils, Mr Sanjay Shah, Chairman of Indian Oilseeds and Produce Exporters' Association (IOPEA) pointed out.

Groundnut oil, sesame seed oil, safflower oil and coconut oil were not extracts of mass consumption, while palm oil and soyabean oil were now being imported, it was explained.

Viet Nam to rake in 48 billion USD in exports

Despite unpredicted fluctuations on the world market, Viet Nam is to net 48 billion USD in export earnings this year, more than 1 billion USD higher than the set target and a rise of 20.5 percent over 2006.

According to the Ministry of Industry and Trade, garments and textiles continued to lead the key export items, excluding crude oil, bringing home 7 billion USD in the past 11 months, which represented a surge of 32 percent over the same period last year.

President of the Viet Nam Garments and Textiles Association Le Quoc An is confident that at this rate the sector will be able to achieve its export target of 7.8 billion USD by the end of this year.

Standing firmly on the second place were leather footwear and seafood, which, despite anti-dumping tariffs and strict inspections imposed by several large markets, had each raked in 3 billion USD by the end of November.

The encouraging result of footwear and seafood exports was owing to businesses’ expansion of their outlets to new markets with new products, marked experts.
This year was also marked with a leap in the export of coffee bean. The product posted an export growth rate of 73 percent, earning 1.7 billion USD over the past 11 months.

With the revenue, coffee bean secured the ninth place in the “club of 1 billion USD earners”, standing behind crude oil, textile and garment, footwear, seafood, electronics and computer parts, rubber, rice and wood products.

Pepper, cashew nuts, rubber and rice have benefited from high prices in the world market, contributing to realising the nation’s export goal.

Deputy Minister of Industry and Trade Le Danh Vinh attributed the export growth to the country’s serious implementation of its open-door commitments after joining the World Trade Organisation.

He also cited the prompt application of initiatives and policies for import-export activities, including a decree on commodities trade applicable to both local and foreign-invested businesses as a factor to boost exports.

The Ministry of Industry and Trade targets export earnings of 58 billion USD in 2008, an increase of 20.8 percent over 2007.

However, the country is struggling to reduce imports, which rose 33 percent to 54 billion USD in the past 11 months. In explaining for import hike, experts pointed to increases in foreign-invested businesses’ imports of machinery and equipment in service of their production.

Another reason is the country’s dependence on imported steel and fertilisers, the prices of which have been climbing continuously.

To curb imports, economists urged the establishment of “markets of raw materials” to ensure supply of raw materials for local producers.

Productivity gains keep lid on China export prices

Treasury Secretary Henry Paulson's inability last week to persuade China to accelerate the rise in its currency value was no surprise. The latest economic summit between the two trading partners was never expected to achieve a breakthrough on the exchange rate, which U.S. manufacturers complain gives Chinese products an unfair edge in world markets.
What is a surprise is the impact of the yuan's gradual rise over the past two years: almost nothing. "Certainly, we have not seen the price increases from China that we were expecting," says Frank Vargo, the National Association of Manufacturers' vice president for international economic affairs.

Since July 2005, when China began allowing the currency to rise against the dollar, the yuan's value has increased 12%. That should make Chinese products more expensive for customers paying with dollars. But over the same period, the prices of Chinese imports have risen by less than 1%, the Bureau of Labor Statistics says.

Prices of goods imported from elsewhere, excluding volatile oil shipments, rose 6.4%, meaning Chinese goods have become even more competitive in the USA despite the yuan's appreciation. That helps explain why the U.S. trade deficit with China this year will exceed the $232 billion gap recorded in 2006 and it suggests further yuan appreciation may not have the dramatic effect on Sino-U.S. trade some companies crave.

"Productivity is rising rapidly," says Carsten Holz, a visiting scholar at Princeton University. "With rising productivity, you can pay higher wages and keep your prices the same."


From 1993 to 2005, the typical Chinese worker became more than four times as productive, Holz says. As China restructured inefficient state-owned companies and absorbed Western technology and management practices, productivity increased by an annual average of 20.4% from 1995 to 2003, says a separate Conference Board analysis of data from 28,000 Chinese enterprises.

"This process of very rapid productivity growth is likely to go on. … China has a long way to go to realize its potential," says Bart Van Ark, the group's research chief.

Vargo, of the manufacturers association, says he expects to see Chinese competitors raise prices after a lag of several months. Chinese firms may be absorbing the effect of the rising yuan by shrinking profit margins to retain market share, he says.

But Nicholas Lardy, a specialist on the Chinese economy at the Peterson Institute for International Economics, says Chinese exporters actually are slightly more profitable today than in 2004 before the yuan began appreciating. Productivity growth has been strong enough to compensate not only for a rising currency but also for higher wages and energy costs, he says.

Chinese officials are reluctant to allow the currency to rise at a faster rate, fearing job losses in exporting industries. But since China's trade surplus is ballooning, they have room to take more aggressive action, Lardy says. "They need to move faster," he adds.

Germany to Reclaim World Export Champion Title from China

Germany looks set to remain the leader as the top goods exporter in the world. The Economics Ministry in Berlin made the announcement in response to the release of preliminary figures by the World Trade Organization.

"The preliminary trade figures for this year underline the global

competitiveness of the German economy," Bernd Pfaffenbach, a state

secretary in the ministry, told DPA news service.


He said that Germany's success was based on high quality products and technological innovation.

The World Trade Organization (WTO) figures, which were released in Geneva, showed a 19-percent increase in German exports to 661 euros ($969 billion) during the first nine months of this year.


Push for greater liberalization


Bildunterschrift: Großansicht des Bildes mit der Bildunterschrift: Germany exports everything from cars to cremes and hair care products
Last year, exports contributed 39 percent to Germany's gross domestic product, DPA reported. The Economics Ministry said that figure appeared likely to rise slightly this year.


Pfaffenbach said the figures demonstrated the need for a successful conclusion to the WTO's Doha Round of trade talks.


"Further liberalization of world trade would have a lasting positive effect on global trade and would give added impulse to growth and employment particularly in export-oriented Germany," he said