Wheat Prices Swing Up To A Six Month High
Wheat's price rising to a six month High is due to robust demand ahead of the festival season, News agency Reuters has reported quoting dealers
Our Top Reports For Today
- <00:55> China’s Trade Numbers Plunge Unexpectedly In July
- <02:54> Auto sales are slowing down, what’s driving it and trends with Manish Raj Singhania
- <11:53> The data points that are coming that we should be careful to not jump to conclusions
- <15:06> Now, wheat prices swing up to a 6-month high
- <18:48> And hmm..moonlighters forget to account for their extra incomes, get tax notices.
TRANSCRIPT
NOTE: This transcript contains only the host's monologue and does not include any interviews or discussions that might be within the podcast. Please refer to the episode audio if you wish to quote the people interviewed. Email [email protected] for any queries.
China’s trade fell sharply in July on the back of slowing global demand as well as domestic pressures for imports.
Overseas shipments dropped 14.5% in dollar terms last month from a year earlier — the worst decline since February 2020 — while imports contracted 12.4%, the customs administration said Tuesday, in a report quoted by Bloomberg News.
That still left a trade surplus of $80.6 billion for the month. The export and import figures were worse than what economists polled by Bloomberg had expected.
Shipments to the US plummeted 23.1% in July, according to customs data. Exports to other markets including Japan, South Korea, Taiwan, Asean, the EU, Brazil and Australia all dropped by double digit percentages, too.
Some economists also attributed the decline in imports to falling commodity prices — meaning that even though Chinese factories were still buying materials, they were doing so at lower prices.
For example, the value of crude oil imports fell more than 12% in the first seven months of 2023 from a year ago, but by volume crude oil actually jumped by around 12% in that time.
Back home, yesterday, we spoke of how the markets are consolidating at the current levels or below the 20,000 on the Nifty.
As brokerage ICICI Securities put it, The Nifty50 index is consolidating just below the 20,000 mark after rallying 14% from Mar '23 lows which is a modest 7% YTD return while robust earnings expansion catches up. This according to ICICI Securities indicates rational behaviour.
Well we are still in consolidation mode right now.
The Sensex ended 107 points lower at 65,847 and the NSE Nifty 50 closed with a small loss of 26 points at 19,571.
Auto Sales Are Slowing
Auto sales for the month of July showed a 10% YOY increase but slowed down month on month by 5% which means sales in June were higher than July, according to data from the Federation of Automobile Dealers. Three wheelers were an exception to this trend.
Category wise, passenger vehicles grew 4%, commercial vehicles 2%, two wheelers at 8%, 3 wheelers at 74% and tractors at 5%.
It's not clear if there are any clear trends that stitch these categories together but we will come to that in a moment.
As brands go, Maruti Suzuki led the pack with the number of passenger vehicles at 1,17,571, while Hyundai Motor sold 40,945 units in July. Tata Motors came in third with sales of 39,033 units.
Hero Motocorp was the highest selling two-wheeler company followed by Honda Motorcycle and Scooter with sales of 3,61,219 and 2,99,090 respectively.
To get a better understanding of the trends behind the numbers, I reached out to Manish Raj Singhania, President of the Federation of Auto Dealers in India and also managing partner of Ralas Motors, based in Raipur in Chattisgarh.
---
FADA President Manish Raj Singhania referred to bookings for the higher priced Hero Harley bikes.
Demand is evidently so strong that Bloomberg is reporting that Hero MotoCorp Ltd has now stopped taking bookings for a new Harley-Davidson Inc. motorcycle in India after receiving more than 25,500 orders.
Hero said it had seen “overwhelming” demand for the Harley-Davidson X440 in the month since it started taking orders for the model, which it is producing in partnership with the American motorcycle icon.
Over 65% of the 25,597 bookings are for the highest-end X440, which is priced at 269,000 rupees ($3,250), the company said in an exchange filing Tuesday.
Hero will start production of the motorcycle in September and begin deliveries the following month. The strong demand prompted the New Delhi-based company to raise the starting price by nearly 5% earlier this month.
UK’s Triumph Motorcycles Ltd. has partnered with Bajaj Auto Ltd. to design and make bikes costing under 200,000 rupees. Harley and Triumph will compete against Eicher Motors Ltd.-owned Royal Enfield.
Bajaj Triumph has also received over 15,000 bookings for the bike, also at a higher price range of around Rs 2.3 lakh.
India: Data In Disguise
In an interesting report, HSBC Securities economists have warned that four data points that will come in the next four weeks should not be taken at face value and deserve deeper study and more careful interpretation.
The first is GDP growth for the April to June quarter which could land at 8%. This is good, HSBC says but some of it could simply be statistical.
The bank says that tissues with the manufacturing and services deflator could overstate GDP growth by 1 ppt. And a low base could overstate it further.
A deflator is a figure expressing the change in prices over a period of time for a product or a basket of products.
The other point HSBC makes is that tax revenue growth may not give a good indication of overall economic growth.
In June, GST and income tax revenue growth was good but corporate tax growth was weak, says HSBC. This in turn, the bank says, reflects a k shaped recovery, stronger demand for luxury goods where prices and tax rates are higher driving GST and improved formal sector prospects driving income tax.
Core inflation as another figure. HSBC says that one part of it, housing inflation, may not be capturing the true price pressures. While housing rents are rising 11-22%, the CPI housing inflation remains at 4.8%…this HSBC says is a problem with computational issues across the board - inflation in rented houses, owner occupied houses and government dwellings.
And finally, liquidity, the bank says it may be a good idea to look at a variety of rates and not just a call money rate to gauge liquidity in the banking system.
Housing Rents and Home Prices
Speaking of rising housing rents and home prices, the average prices of homes costing more than Rs 1.5 crore has seen the highest price appreciation in the last five years in the top 7 cities, a new report from real estate consulting firm Anarock has said.
So, if you owned a home that was worth than Rs 1.5 crore to start with in the last five years, then the increase in value of that house would have been higher than homes worth less than Rs 1.5 crore.
As averages go, prices of homes priced >INR 1.5 Cr in top 7 cities saw highest price appreciation b/w 2018 & 2023 among all 3 budget categories – from INR 12,400/sq. ft in 2018 to approx. INR 15,350/sq. ft. today
Among the top 7 cities, Hyderabad recorded the highest jump of 42% in the average price of luxury homes in this period3.
A quick reminder on where we, in Mumbai stand.
MMR currently has the highest average price across all housing categories among the top 7 cities. This is not new of course but just to remind ourselves of what we pay here.
The avg. price for homes priced > INR 1.5 Cr currently stands at approx. INR 29,260/sq. ft.
Chennai has the second-highest avg. luxury housing price, currently at approx. INR 15,250/sq. Ft, in In NCR, the avg. price in the luxury category are currently INR 14,500/sq. ft
In Bengaluru, the avg. price for luxury homes stands at INR 12,970/sq. ft. in 2023
From Homes To Food
Speaking on rising prices again and for the wrong reasons..prices of wheat in India have surged to a six-month high.
News agency Reuters quoting dealers says this is due to robust demand ahead of the festival season.
Rising cereal prices have already been an area of concern, already close to 13%.
"In all key producing states, farmer supplies have nearly come to a halt. Flour mills are struggling to obtain sufficient supplies in the market," a New Delhi-based trader told Reuters.
What could be the way out ?
Agricultural economist Dr Ashok Gulati and former Chairman of the Commission for Agricultural Costs and Prices said in an interview to television station NDTV that India should import some wheat, like 5 million tonnes and essentially calm the market.
Hmm..Our Really Smart Moonlighter Fellow Citizens
Turns out that our smart moonlighting brethren are not so smart at all. The years 2020 - 22 were open season for moonlighting IT professionals - mostly that is - who figured not only that they could relocate to their home town or beach or hill station but also hold multiple jobs and assignments at one time, usually with each employer not being told about the other. Wipro even sacked 300 employees last year for moonlighting and thus unethical practices.
A report in the Economic Times says the income-tax department has sent notices to many professionals who have earned income outside their regular salary but did not declare in their tax returns. Most of the notices issued were for financial years 2019-2020 and 2020-2021, the newspaper said.
In a number of cases, the income from the so-called moonlighting, or job outside full-time employment, was higher than the regular salary.
Amazingly, most of the payments were made online and some were received from overseas accounts which the tax department was able to detect.
"We have found a large number of instances of IT, accounting and management professionals who were getting payment monthly or quarterly from two or more companies but were declaring income only from their full-time job in their income tax returns," a senior official told ET.
Notices have been sent to all.
Maybe it would be a good idea to share the names of these employees with their primary employers as well, in the form of a tax query of course.
---
Speaking of moonlighting and working from home, Bloomberg News is reporting a study by economists at the Massachusetts Institute of Technology and the University of California, Los Angeles found that workers randomly assigned to work from home full-time are 18% less productive than those in the office.
The researchers, who studied newly hired data entry workers in India who were randomly assigned to either the home or the office, said that two-thirds of the drop in productivity was evident from the first day of work.
The remaining difference showed up over time as in-office workers learned more quickly than their fully remote counterparts.
Well, that’s it from me for today, have a great Wednesday ahead, do write in to us with your feedback and suggestions.
