Commodity – 26, February 2007

Increase in VAT rate

Central and state governments have agreed upon increasing basic VAT rate to 6% from the existing rate of 4%. The new rate will be effective April 2009.

Commodities like branded bread, paddy, pulses, wheat, rice and edible oil will primarily face the rate increase. The tax rate on these commodities will be at 5% from April 2008 and will increase to 6% from April 2009.

The rate on tobacco will be 12.5% effective April 2007 hence tobacco consumers need to make higher provisions from this year.

Conference on Potato disease

The Ontario Potato Board and the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA) will host the first International Conference on potato to be held in Guelph, Canada.

The Conference will run for two days, 5th and 6th of March 2007. The main objective will be to discuss common scab a disease caused by the bacterium Streptomyces scabies. Experts around the world will come together to discuss current and potential management practices to reduce the incidence of this disease.

The conference is useful for growers, researchers and crop consultants.

Other commodities update

Flying prices of onion is expected to come down as fresh arrivals of onion are expected from Kurnool and Tandur. Low onion arrivals have caused the price to touch a high of Rs 1190 per quintal.

Irregular and insufficient rainfall has affected cardamom production drastically and consequently the production of cardamom is expected to be lower by 5-10 percent this season.

Out of total national output of 12540 tons in 2005-06, Kerala produced 9765 tons while Karnataka and Tamil Nadu produced 1,775 tons and 1,000 tons cardamom respectively.

Pepper future showed a down trend last week on reports of possible stoppage of trading in pepper futures in the commodity market.
On NCDEX the March contract fell by Rs 142 a quintal compared to its Thursday’s close and closed at Rs 12422 per quintal.

On NMCE the March contract fell by Rs 186 a quintal compared to its Thursday’s close and closed at Rs 11850 per quintal.
The total turnover on NCDEX increased by 2,544 tons to 26,550 tons, while on the NMCE it increased by 1,376 tones to 6,019 tons.