Sharp decline in global food prices

World food prices declined sharply in March, driven mostly by demand-side contractions linked to the effects of the COVID-19 pandemic and the drop in global oil prices due mostly to expectations of economic slowdown as governments roll out restrictions designed to respond to the health crisis, the UN food agency said in its latest monthly report. The FAO Food Price Index, which tracks monthly changes in the international prices of commonly traded food commodiies, averaged 172.2 points during the month, down 4.3 percent from February. “The price drops are largely driven by demand…

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CAPA projects $3.6 billion loss for Indian Aviation

The 21-day nationwide lockdown announced on March 25 which has seen all passenger services disallowed till at least April 14 will deliver a major setback to the Indian Aviation business.   Industry think-tank and research agency CAPA (The Centre for Asia Pacific Aviation) has projected India’s aviation market incurring a staggering loss between $3.3 and $3.6 billion in the first quarter of Financial Year 2021 due to the effects of the coronavirus.   “India’s aviation sector could incur losses of $3.3-3.6 billion in 1QGY2021 assuming that all domestic and international…

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Margin improves for cement industry

According to a recent report by HDFC Securities (3QFY20 Review), “despite subdued demand in the past three qtrs, industry’s operating margin has scaled up to decade high.” The report has analysed the performance of 19 listed cement companies which, on a cumulative basis, have a  share of nearly 75 percent in country’s total cement production. Commenting on improving margin, the report maintains that this is driven by strong pricing in the north/central/Gujarat markets, steady fall in pet-coke prices and low diesel prices. Cement prices have increased QoQ in 4QFY20, aided…

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Textile sector to be under pressure in FY21

Indian textile sector is likely to face serious pressure on volume appreciation front in FY21. Noted credit rating agency India Ratings and Research (Ind-Ra) has recently revised the textile sector’s outlook to negative for FY21 from stable citing weak domestic demand growth and threat of cheap imports as key reasons. “Ind-Ra expects cotton prices to stabilise with improved cotton supply and an inventory build-up in FY21. The industry adjusting to a low dealer inventory is becoming the new normal. Easing of the GST implementation issues might only provide modest support…

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Global shrimp prices under pressure

According to a recent note issued by credit rating agency ICRA, “global shrimp prices are expected to face pressure over the next few months, as global trade adjusts to the changing demand dynamics in China, a key importer and consumer of farmed shrimp.” India is a major producer and supplier of shrimp to China which is a key price-mover in the global markets.  Pavethra Ponniah, Vice President and Sector Head, ICRA, commented, “The rapidly spreading novel coronovirus (COVID-19) pandemic, which originated in Wuhan, China, is believed to be zoonotic and…

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Engineering goods, petroleum products key drivers of Indian exports

According to a recent report by credit rating agency CARE, engineering goods, gems and jewellery and petroleum products have been the major commodities class helping in maintaining a positive growth trajectory in exports between 2015-19. The average annual growth rate between 2015 to 2019 had stood at 4.9 percent. “Engineering goods and gems & jewellery are the two main exports accounting for 35.5 per cent of total in 2019. But there is a contrast in their shares. Engineering goods share has been fairly stable in the 22-24 per cent range while…

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Muted demand for commercial vehicles in 2020

In a recent report on the automobile industry, noted credit rating agency ICRA has maintained a Negative year-end outlook for the commercial vehicle (CV) segment over the near term, given the slowing economic growth, current overcapacity in the CV space and tight financing environment.  “ The M&HCV (Truck) segment has been significantly impacted over the past year, with volumes contracting by a sharp 41% in YTD FY2020. Excess capacity created in the system post revision of axle load norms in July 2018, coupled with slowdown in the economy and infrastructure…

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AIRPORTS OF THE FUTURE

SITA, the leading IT provider for the air transport industry, has unveiled 10 bold predictions about the technology shaping how passengers will move through the airport of the future, based on unique insights, driving industry forces and emerging technologies. The major projections include:  Security will be integrated into a frictionless journey No more taking off your coat, shoes, and belt, or putting little bottles into little bags. And no more queues. Passengers and their bags will be recognized automatically as they go through automated checkpoints. Hard checkpoints will be replaced by…

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FMCG e-commerce projected to become $4 billion business by 2022

Nielsen India expects the fast-moving consumer goods sales coming from the E-Commerce channel to grow to $4 billion by 2022. The channel contributes 2% to the current FMCG market. These are insights from Nielsen’s recently launched E-Trak Index – a measurement solution that tracks the FMCG E-Comm industry. India’s first such solution is created using aggregated ePOS (electronic point of sale) data from cooperating E-commerce players and data science backed estimation for non-cooperating E-commerce players in India. The index adds a crucial element to the Retail Measurement Services that Nielsen provides…

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India only bright spot in DHL Global Trade Barometer

The DHL Global Trade Barometer (GTB) indicates a further contraction in world trade for the next three months. The overall trade outlook is reduced by -2 points, to a new index value of 45. That means that global trade continues to lose momentum, albeit mildly. Against the previous updates, the downward tendency is largely moderate and steady, neither indicating an acceleration of the decline nor a bottoming out. Except India, all surveyed countries are affected by the deceleration and record indexes below the 50-points-threshold of no growth. The overall decline…

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