NEW DELHI, JUNE 29: A HAMBURG BASED private testing firm, Eurofins, has alleged that  it has found elevated residue levels of Isoprothiolance -a fungicide used to control rice blast disease -in the Basmati imported from India into the European Union (EU).

The EU had earlier placed restrictions on imports of shrimps, grapes and honey from India.

The Commerce Secreatry, Dr Rahul Khullar, has assured to raise the issue with the European commission (EC) following concern expressed by the rice exporters.

The assurance was given after a meeting Ministry and Agricultural and Processed Food Products Export Development authority (Apeda).

On the other hand, the All-India Rice Exporters’ Association (AIREA) threatened legal action against the testing firm.

AIREA alleged that Eurofins’ test reports have not followed officially validated and peer reviewed methods/protocols, even while sowing confusion among large retailers who tend to withdraw products from their shelves at the slightest doubt.

During 2009-10, around 2.6 million tonness of Basmati valued at almost $3 billion was exported. The EU acounted for roughly 0.3 million tonnes of this.

Isoprothiolane, significantly, does not fall in the list of 716 pesticide for which maximum residue limits (MRL) are specified either ‘definitively or ‘temporarily’ under Annexes II and III of the EU Regulation No. 396/2005.

Pesticides not covered under these annexes are automatically assigned a ‘default Mrl of 0.01 mg/kg corresponding to the lowest concentration of their residues that are measurable using routing analysis. Isoprothiolane, thus, attracts an MRL of 0.01 mg/kg under EU regulations.

As against this, Japan’s Ministry of Health has set the same at 0.1 mg/kg, while being even higher, at 2 mg/kg, in respect of residues in rice.

“The average Japanese consumes 20 times more rice than his European counterpart and still its government permits a higher tolerance limit for Isoprothiolane, ” an exporter pointed out.

NEW DELHI, JUNE 29: THE  six key infrastructure industries have registered a 5 per cent year-on-year growth in May, compared with 3.2 per cent growth in May 2009, but the growth  was slightly lower than the 5.1 per cent posted a month earlier.

The six core sectors constitute 26.7 per cent of the index of industrial production (IIP).

Analysts say the over all trend continues to be of robust growth because most sectors show healthy ggrowth rates.

“Growth has been good in crude oil and petroleum refinery Products and, overall, the growth is good and the sector will continue to support high overall industrial growth,” an economist said.

Among individual in dustries, cement grew by 8.6 per cent in May (over and above a year-on-year increase of 11.8 per cent in May 2008), while these amounted to 6.4 per cent (3per cent ) for electricity, 7.7 per cent (minus 4.3 per cent ) for refined petro-products, 5.8 per  cent (minus 4.3 per cent) for crude petroleum , 2.5 per cent (2.8 per cent)  for finished steel and 0.1 per cent (10.4 per cent) for coal.

For the April -May 2010 Period, cement production went up by 8.7 per cent year-on-year (11.8 per cent in April -May 2009), while being 6.6 per cent (4.8 per cent) for electricity, 6.5 per cent (minus 4.4 per cent) for refined petro-products, 5.5 per cent (minus 3.7 per cent) for crude oil, 3.6 per cent (0.8 per cent ) for finished steel and minus 1.4 per cent (12.3 per cent) for coal.

Crude oil and petrol refinery production grew at the rates of 5.8 per cent and 7.7 per cent, respectively, during the month, against a decline of 4.3 per cent each in the corresponding period of 2008-09.

Coal output showed a significant deceleration in growth, 0.1 per cent during the month, compared to a growth of 10.4 per cent in May last year.

Electricity generation rose to 135.0846 billion units, as against 126.6776 billion units, during the period under review.

NEW DELHI, JUN 29: India’s  spices exports increased 28 pc, both in value and volume terms, in April this year over the same month last year, according to the Spices Board. While in quantity terms exports reached 56,910 tonnes in the month under review, in value-terms, it rose to Rs 525 crore, In comparison, the country exported 44,595 tonnes worth Rs 412 crore in April 2009. Shipments for chilistood at 19,750 tonnes in the month and was valued at Rs 121.46 crore at an average price of Rs 61.5 a kg. The highest growth in exports was recorded by garlic a whopping 6,282 pc in quantity and 4738 pc in terms of value. In comparison, exports were 5.425 lakh tonnes and valued at Rs 19.47 crore in Apirl last year. Cumin exports, however, declined by eight pc, in value terms, at RS 55.56 crore in April against Rs 60.24 crore in the same month last year. India had exported spices worth Rs 5,560.5 crore in the last fiscal, up 5 pc over the previous fiscal. Export in terms of volume stood at 5.02 lakh tonnes in 2009-10. Spices Board Chairman V J Kurien had recently said that the country was targeting 5.25 lakh tonnes in exports, valued at Rs 6,000 crore, in the current fiscal.

KOLKATA, JUN 29: Mr Rahul Khullar, commerce Secretary, urged exporters to move up the value chain for higher margin and to explore new markets. He said that during the process of fiscal consolidation that is in progress now, the exporters would be required to equip themselves properly to face fierce competition. During the period, the taxes might be high.

Allaying the apprehension expressed by some exporters over the base rate, the commerce Secretary made it clear that there would be no dearth of credit for the export sector. He however, felt that development of infrastructure was critical for the country to sustain 25 pc export growth.

Mr Ramesh Kumar Agarwal, Chairman, FIEO(ER), requested the Commerce Secretary to monitor the progress of work on the upgradation of land Customs stations along the India Bangladesh Border.

NEW DELHI, JUN 29: Container ship supply will grow more slowly than forecast, allowing demand to catch up with capacity by 2015 and support higher rates, an industry analyst predicts. cancellation and delay of vessel orders, scrapping of older ships and slow-steaming will reduce growt in capacity to manageable levels, paul Dowell director of research and consultancy at Howe Robinson Shipbrokers Research, said

“We see a dramatic tightening of availability over the course of 2010″ and beyond, Dowell said.

It was the latest in a string of optimistic forecasts about an industry that’s beginning to rebound from its  worst downturn ever, Container ship lines lost an estimated $ 15 billion globally last year when the recession undercut trade volume just as shipowners were taking deliveries of scores of large, new ships ordered several years ago amid expectations of continued rapid growth in demand.

New ships are still coming out of shipyards but at a manageable rate, Dowell said. He said that at the start of this year, deliveries during  2010 are expected to total 1.5 million TEUs of capacity, for an 11 pc increase in capacity. He said about 530,000 TEUs of that will be delayed till 2011 or 2012 and that slowsteaming will soak up an additional 175,000 TEUs. Scrapping and a small number of order cancellations will reduce fleet expansion this year to about 750,000 TEUs or 5.6 pc growth he said.

The last of the pre-recession orders for new ships are expected to be delivered by shipyards during the next couple of years, and shipowners are expected to be cautious about new orders.

“We’re looking for growth to average 5 or 6 pc for the next five years or so,” Dowell said. “That is not a great burden on the industry.” Worldwide cargo demand, meanwhile, is expected to rise 9.3 pc this year and 7.6 pc in 2011, Dowell said. He forecast that containerized cargo volume will increase 9.3 pc in the trans-Pacific and 13.8 pc on Asia Europe trades from last year’s depressed levels.

NEW DELHI, JUN 28: The shortage of containers is pushing up equipment prices to new highs as fear grow that production will not be able to meet surging demand.

“AS both carriers and container leasing companies rush to place fresh orders to meet the demand, prices for new containers have soared to their highest levels in almost 20 years. The current price for TEU has reached $2,750 compared to less than $2,000 at the end of last year,” industry sources said.

“Even at these higher prices, demand will still outstrip supply for the current peak season. Container  manufacturers are facing difficulties in restoring full capacity following the halt in production of dry containers since October 2008. Total capacity at the main container producers have been cut back significantly since late 2008. as production lines were shut and twin shift operations reduced to single shifts.

“Although annual production capacity at the two largest container manufacturers, CIMC and singamas, is over 3.5 million TEU, these two suppliers are expected to produce  only 1.35 million TEU the year The global output of new containers is estimated at 1.52.0 million TEU for the well  fully year, well down from the peak of 4.2 million TEU produced of 4.2 million TEU ,”

Demand has picked up since the beginning of the year. with CIMC reporting sales of 102,900 TEU of dry van containers in the first quarter, up from 60,400 TEU in the whole of 2009.

“The price of new containers has risen to its highest levels since 1991 and currently stands at $ 2,750/20′ unit. The average price in the last 10 years lays between $1,500 and $ 2,400,” said.

Leasing companies are said to account for 65 pc of the 370,000 TEU delivered  to  April this year, “Until the first quarter of 2010. some carriers still looked for saleand  leaseback deals for their container fleet… carriers now also placing new orders as the current equipment stock has run to extremely low levels, ” it said.

Current container manufacturing capacity in china is estimated at five million TEU. The problem is that total production is expected to be less than two million TEU in 2010 as factories struggle to resume production following the suspension in late 2008.

MUMBAI, JUNE 28 INDIA Inc has expressed the fear that fuel price hike will chip away at its profit margins since companies have to hold on to their price line, at least for the time being.

It will cost the companies more to transport goods with the diesel price going up by Rs 2 a litre from june 26.

Mr H.M.Bangur, Managing Director, Shree cement, calculated that the fuel price rise would lead to a cost increase of Rs 2 per 50 kg bag for cement companies.

“Our bottomlines will be impacted as expenses will go up as a result of the rise in fuel prices,” Mr Sanjay Bhatia, Managing Director of Hindustan Tin Works, concurred, petroleum products are used to manufacture thins, he explained.

According to restaurateur, Mr Ramesh Aidasani, the rise in fuel prices will have anamplifying effect on prices of vegetables, fruits and other commodities. This is expected to have a cascading effect on inflation as well.

Most companies are likely to absorb the cost impact, which is why margins of companies would come under pressure. “Since a glut like situation is prevailing right now, we will not be able to pass on the cost increase to customers, It Is a Buyer’s market, This is going to affect our margins Mr Bangur explained.

Mr pradeep Bakshi of Voltas said his company was still studying the situation.

“The company had increased prices of products twice in the last four months because of the rise in raw material costs (copper, steel, aluminium) and strengthening of the US dollar.”

MEDITERRANEAN Shipping company (MSC) has announced a rate increase on all cargo from the Far East to the US and Canada from July 18.

From the East to the US East Coast and intermodal points from there, the increase will be $ 320 per TEU, $ 400 per FEU and $450 per 40-foot high cube.

From the Far East to the US West Coast and to intermodal points from there, increase will be $400 per TEU, $563 per 40-foot high cube.

From the Far East to canada, the increae will be $320 per TEU, $400 per FEU and $ 450 per 40-foot high cube.

CMA CGM has announced the return, on July 10, of the Yang Tse service linking South, central and North china to the west coast of the US.

Operated in partnership with Maersk Line and MSc, this service will deploy six vessels of 6,500-TEU capacity, covering the following port rotation : xiamen, shanghai (waigaoqiao), Qingdao, Long Beach, Kaohsiung, Hong Kong, xiamen.

It will allow CMA CGM  to respond to the rebound of volumes on the trade linking china to the US by strengthening its Presence and improving transit times on this key transpacific trade lane.

This new service will complement the group’s existing services between china and the US west Coast -Bohai Rim and Pearl River-thus providing optimum port coverage, thanks to the addition of three new calls in Xiamen (Eatsbound),  Hong Kong and Qinadao as well as an extra call in shanghai (WGO).

“The Yang Tse service allows CMA CGM to enhance its port coverage and further develop its capacity on the transpacific market in response to the expanding eastbound trade while meeting growing demand from the American exportes towards South china and Taiwan, thanks  to direct connections to Kaohsiung  and Hong Kong,” explained explained Mr Jean-philippe Thenoz, CMA CGM Vice -president North America LInes.

The first call of the yang Tse service will take place on july 10 in xiamen.

NEW DELHI, JUNE 27: THE Union Finance Ministry has again deferred the implementation of service tax on transport of goods by the Railways. The tax will now come into force only from January 1, 2011.

This development is seen as an attempt to contain the spiralling inflation rate.

This is the second time this year that the Finance Ministry has resorted to postponing the service tax on rail freight.

The government had in 2010-11 Budget proposed to bring transport of goods by rail under the service tax net from April 1.

Its implementation was, however, deferred to july 1 due to similar inflationary circumstances.

Besides the postponement of the levy, the Finance Ministry has now said that the earlier proposed exemption on certain goods such as pulses, foodgrains, petroleum products for public distribution system, organic and chemical manure and motor vehicles would now come into effect from January-1, along with the 70 per cent abatement.

After the Budget announcement, the Railways had indicated that it would have no choice but to pass on the tax burden to its freight customers.

A service tax levy on railway freight would have a cascading impact on coal, cement and steel prices, it was feared.

8 new services to be brought under tax net from july 1.

service tax will be imposed from July 1 on the eight new services brought under the tax net in Budget 2010-11, a Finance Ministry announcement said.

The eight new services include services of promoting, marketing or organising of games of chance, including lottery, health services undertaken by hospitals for employees of business organisations and health services provided under health insurance schemes offered by insurance schemes, services provided for maintenance of medical records of employees of a business entity and promoting a ‘brand’ of goods, services, events and business entity, etc.

                        ….On air fares

The Union government has issued a notification bringing air travel into the service tax ambit from July 1.

This would raise domestic and international air fares by Rs 100 and Rs 500, respectively.

The government had proposed in the 2010-11 Budget that 10 per cent service tax be charged on air travel aimed at raising Rs 1,600 crore annually.

It had proposed to expand the scope of air transport services to attract service tax to include domestic and international journeys in any class.

The notification, issued by the Department of Revenue, said that for domestic travel, “10 per cent of the gross value of ticket on Rs 100 per Journey, whichever is less” would be charged from passengers travel ling in any class-business or economy.