The food retail business in India is growing at the rate of 47 % as comapared to the overall retail growth(oraganised) of 26 % and is expected to double at $482 billion by 2020 as against $236 billion in 2006. High disposable income and growing exposure to global lifestyle and other factors such as health consciousness, and convenience have impacted in change in consuming patterns of modern Indian consumers. Around 80 mn Indian consumers who have an annual income of over $5,000 will be the primary drivers of the food retail business, and this was reconfirmed at a CII seminar 'Foodpro 2007' in Chennai.
India is the fourth largest economy in terms of purchasing power parity and the consumer base is growing with the households of annual income of over $5,000 expected to increase from the current 81 million to 147 million by 2015. The processed food consumption is all set to treble to $300 billion by 2015 and the value of processed fruits & vegetables will increase to 10% in 2009-10 and 15% in 2014-15. All these are a clear indicator of the future the food retailing has and this gives all the agri business managers a prospective carrer in this sector.
SOURCE: CII conference"FOODPRO 2007" AND CSO
Manisha Mishra,
PGPABM-II
Tuesday, August 19, 2008
Monday, August 18, 2008
VIbrANtMANAGE: ThE NeW BlOg 4 ThE NaYe LoG
http://managevibrant.blogspot.com/
All work and no play makes jack a dull boy. Put in your thinking hats & freak out..........
All work and no play makes jack a dull boy. Put in your thinking hats & freak out..........
Sunday, August 17, 2008
Is ban on future trading in commodities justified……..???
After getting some insights from the commodities course made me to write this article. As myself being pro future trading I cannot resist people saying future trading leads to inflation. There is reason to it why I am saying that future prices don’t lead to increase in the prices of the commodities. We saw in the February 2007 that the future trading in the wheat was banned, even after the ban; the prices of wheat continued to rise sharply and reached $400/quintal. The reason for this abrupt increase in the prices was low output from major producers like US, Argentina, Australia and the subsequent ban on export of wheat by these countries. So I see no reason in banning wheat future trading as the price rise was due to lack of supply of the commodity to meet the rising demand.
The same is case with ban on trading of tur and urd which were banned for trading one month prior to wheat ban i.e. on January 2007, the production of tur in the year 2005-06 was 2.74 million tonnes while it was 2.31 million tonnes in 2006-07 how can decline in production match with day to day rising demand in this case the prices of the commodities are likely to rise.
In order to review whether futures trading really cause price hike government of India appointed a committee under the leader ship of Abhijit Sen. The committee had submitted its report. As per the report this committee had made an observation that food grains at no point accounted for more than 6% of total volumes of future trading in agricultural commodities. In fact the current volume of future trading in commodities in India is quite less than the international norms. More over the draft report of the expert committee on futures commodity trading, has recommended better regulation and participation by farmers in the commodities market even while saying that there was no evidence to suggest that futures trading stoked inflation.
As it was rightly by Mr. Bhashyam Seshan,CS (NCDEX) that exchanges as like NCDEX who trade in commodities futures are just playing the role of thermometer, they help us to know what is the current situation in the market which will further help us to decide what steps can be taken to avoid the foreseen price volatility. There is no use breaking the thermometer just because it is showing high temperature.
Future trading is just a price discovery mechanism and in order to improve this mechanism we need to standardise our local mandis which helps us to get the spot prices, it is very necessary that the spot prices should be arrived by fare means by suppressing the faulty practices of trade like hoarding or black marketing. In fact our government should take certain steps so as to involve the farmers in to this business so as to benefit directly from the benefits of future trading and secure his future position by mitigating the risk involved due to price fluctuation.
The same is case with ban on trading of tur and urd which were banned for trading one month prior to wheat ban i.e. on January 2007, the production of tur in the year 2005-06 was 2.74 million tonnes while it was 2.31 million tonnes in 2006-07 how can decline in production match with day to day rising demand in this case the prices of the commodities are likely to rise.
In order to review whether futures trading really cause price hike government of India appointed a committee under the leader ship of Abhijit Sen. The committee had submitted its report. As per the report this committee had made an observation that food grains at no point accounted for more than 6% of total volumes of future trading in agricultural commodities. In fact the current volume of future trading in commodities in India is quite less than the international norms. More over the draft report of the expert committee on futures commodity trading, has recommended better regulation and participation by farmers in the commodities market even while saying that there was no evidence to suggest that futures trading stoked inflation.
As it was rightly by Mr. Bhashyam Seshan,CS (NCDEX) that exchanges as like NCDEX who trade in commodities futures are just playing the role of thermometer, they help us to know what is the current situation in the market which will further help us to decide what steps can be taken to avoid the foreseen price volatility. There is no use breaking the thermometer just because it is showing high temperature.
Future trading is just a price discovery mechanism and in order to improve this mechanism we need to standardise our local mandis which helps us to get the spot prices, it is very necessary that the spot prices should be arrived by fare means by suppressing the faulty practices of trade like hoarding or black marketing. In fact our government should take certain steps so as to involve the farmers in to this business so as to benefit directly from the benefits of future trading and secure his future position by mitigating the risk involved due to price fluctuation.
Kalpakant C. Pawar
PGPABM-II
MANAGE.
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