Foodgrains production in the country is likely to touch 205 million tonnes in 1999-2000 on the back of a two per cent growth in the kharif output this season over the corresponding period last year, according to the estimates of the Centre for Monitoring Indian Economy (CMIE). Earlier the union ministry of agriculture had finalised the 1999-2000 foodgrains production target at 210 million tonnes, an increase of 3.4 per cent over 1998-99 production. The ministry estimation was based on an output of 108 million tonnes forecast for the 1999 kharif season, a 5.75 per cent increase over the previous year. CMIE, while pegging the 1999 kharif crop at nearly 105 million tonnes, has said, `even as the overall condition of the monsoon by end-July favours a good kharif crop, it is unlikely that the kharif grains will realise a six per cent increase over 1998-99, assuming that there is no significant revision in the estimates of the earlier years.' The current kharif season experienced a slight setback due to minorweather aberrations, it said adding that the sowing period however saw adequate `precipitation' in most parts of the country.

Aluminium cos merger

Aluminium prices on the London Metal Exchange (LME) showed little immediate reaction on Tuesday to news of a proposed merger between three major producing companies, traders said. LME aluminium fell to $1,460/1,464 a tonne in morning pre-market trading, down from Monday's close of $1,472, in line with lower copper prices. Switzerland's Alusuisse Lonza Group Ltd confirmed earlier on Tuesday it was in talks with Canada's Alcan and Pechiney of France to create the world's largest aluminium company.``My initial feeling is that it will be bearish for prices, as it (a merged company) will be able to reduces costs,'' one trader said. Lower production costs would reduce the chances of output being curtailed if aluminium prices weakened, although there was no prospect of that happening at present with the LME market near 15-month highs.``There are no implications for production, so in theory it should not be a factor,'' another trader said.

Hong Kong gold ends higher

Hong Kong spot gold ended higher on Tuesday after two-way trading by professionals and short-covering in response to high leasing rates. Gold bullion ended at $257.20/70 per ounce on Tuesday compared to New York's previous close at $256.80/257.30 on Monday. Gold reached a high of $257.75/258.05 on buying from Australian dealers and Japan, although Japanese selling later in the day when TOCOM closed trimmed the gains, traders said. ``Some people were covering their forward short positions. Borrowing costs are high. You pay a high cost to short gold,'' a trader said. High rates for leasing gold also made producer forward selling into price rallies less profitable. The six-month gold leasing rate rose to 4.04 per cent and the 12-month rate was 3.76 per cent. Dealers said the market showed little reaction to the latest chapter in the IMF gold sale saga. On Monday an official said the International Monetary Fund was seeking ways to pay for debt relief for the poorest countries without resorting to selling goldreserves. But gold sales could not be ruled out, deputy managing director Stanley Fischer said, adding that a decision was expected in a matter of months. In Tokyo, gold futures ended mixed after rising earlier on strong physical prices. Spot silver ended at $5.29/32 an ounce after closing in New York at $5.31/34 on Monday.

Pakistan cotton prices steady

Pakistan cotton prices were steady on Tuesday amid low volumes as the market took a breather after several bearish sessions, dealers said. They said prices were likely to fall further as there was no signs of any major mill buying. "Trading was slow and it was expected as the market has slipped very sharply in the past few sessions," a broker at the Karachi Cotton Exchange said. Dealers said imports of cheaper cotton have dampened mill demand while arrivals from the new crop were rising and an estimated 300,000 375-lb bales from last year's crop were in stock with ginners. Official figures show imports totalled 679,923 bales of 480-lb each by August 6 since the start of the season in September. In the kerb market, new-crop Niab-78 variety traded in the range of 1,910 Rupees and 1,850 Rupees per maund (37.2 kg) and new-crop MNH-93 in between 2,050 Rupees and 2,000 Rupees.

Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.