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July 2013, VOL 1

In this newsletter, I have attempted to bring to the fore recent news articles that have had or promise to have impact on the export of alcohol from India. I trust this will aide decision making for your organisation.

As the much talked about fuel ethanol blending programme in India continues to be merged in controversy and sees incessant delays in implementation, industry remains uncertain about its future. We are hoping the next couple of quarters would clear the air as the deadline for implementation set in about two weeks ago. The ethanol industry saw positive news on the raw material front with early onset of monsoons and healthy rainfall predicted by the Indian Met Department. The rupee depreciation created opportunities for exporters, making India a favourable source for alcohol. We expect this advantage to remain in the short to medium run as macro fundamentals do not show signs of significant improvement.
Shekhar Swarup
Executive Director

India News

Indian minister pushing for sugar and oil to work better together on ethanol

July 1: With off-take yet to begin, the Indian Oil Minister is pushing OMCs to tie-up the entire ethanol requirements for the year and to expedite procurement and delivery of ethanol already tied-up. The Government had mandated the 5% Ethanol Blending to become effective from June 30, 2013. Read more

Mills ready to supply balance for ethanol tenders

June 14: In response to the oil minister's decision to cancel foreign ethanol tenders, domestic sugar mills are ready to supply the balance amount to the oil companies. "Domestic industry is in a position to supply balance amount from November if the oil companies float a supplementary tender," said Abinash Verma, director general, Indian Sugar Mills Association (ISMA), apex sugar industry representative body. Read more

5% mandatory ethanol blending scheme in limbo

June 3: Owing to high quotes by distillers and supply delays by OMCs, June 30 deadline for ethanol blending may be missed. Read more

Diageo gains control of United Spirits

July 4: The much talked about landmark deal between Diageo Plc and United Spirits Ltd has fructified with the former completing acquisition of 25.02% stake in the company. Read more

Cheers! Kerala creates new record in alcohol consumption

April 6: Liquor sales touched an all-time high in the state of Kerala at Rs 8,841 crore for fiscal 2012-13 jumping from Rs 7,860 crore in 2011-12. Read more

Government plans to hike sugar import duty by 5 per cent to 15 per cent

July 04: The government plans to increase import duty on sugar to 15 per cent from the current 10 per cent in order to curb shipments and clear sugarcane arrears to farmers estimated at about Rs. 9,000 crore, Food Minister K V Thomas said on Thursday. Read more

Cheap imports may hit domestic sugar industry

June 24: The glut in global sugar production and the consequent sharp fall in international prices may come as good news for consumers in India, the worlds largest consumer of the sweetener. But sugar mills in the country are worried that their losses will mount with growing imports. Read more

Best Monsoon Rain in Two Years to Lift India Grain, Sugar Output

June 14: Indias monsoon, which accounts for more than 70 percent of the annual rainfall, may be the highest in two years, potentially boosting harvests of everything from rice to corn, sugar cane and cotton. Read more

India's drought-hit sugar cane areas get rains, may limit damage

June 5: India's key sugar cane producing western and southern states received ample rainfall in the first few days of the annual monsoon after nearly eight months of drought, helping to limit damage. The cane crop in these states was badly hurt due to poor rainfall in 2012 leading to fears of a sharp dip in output. Read more

Govt decontrols sugar for 2 years : All you need to know

April 5: The government has taken steps to remove curbs on domestic sugar supplies after months of debate as it hopes to iron out sharp swings in output that have triggered volatility in global prices. This is a welcome move for the sugar mills who have been reeling from heavy losses in a highly regulated environment. Read more

Rupee may plunge to 61.50/USD in three months: Credit Suisse

June 30: The rupee, which has depreciated by nearly 10 per cent in the last few months, is likely to weaken further and may touch 61.50/USD in next three months and 62/USD in the next 12 months, Credit Suisse said. Read more

Falling rupee may further raise prices of petrol and diesel

July 4: Indian refiners are paying a little more for oil than they did when crude was near its record five years ago as the rupee was stronger then, at Rs 44-45 against the dollar. The combined effect of increase in oil prices and sharp depreciation of the rupee is expected to lead to further hike in petrol prices, giving rise to fears of an inflationary impact on the economy. Read more

Govt awards 14 PPP port projects

May 8: The Union shipping ministry has given its nod for 14 public-private partnership (PPP) projects in the port industry. In the financial year 2011-2012, the government had only awarded three projects. Read more

Globus Watch

Globus enhanced its aggregate bulk alcohol production capacity by 42 million litres in fiscal year 2012-13, post which the companys total installed capacity is 125 million litres. The new plants are on stream and running at near-full capacity. Using the advanced multi-pressure distillation technology, product quality remains impeccable and has received acceptance from premium liquor makers worldwide.

The Company successfully raised funding from Templeton Strategic Emerging Market Fund by issuing Cumulative Compulsorily Convertible Preference Shares valued at $13 million. The funds will be utilised for expansion in the under-penetrated East India region.
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