How Indian tax payers subsidize foriegn sugar consumers

Business Standard reports

White sugar fell to the lowest since November 2005 in London after India, the world’s second-biggest producer, agreed to subsidise exports of the sweetener.

The Election Commission approved a government plan to build a sugar stockpile and provide subsidies to exporters, a trade body said today. India will pay exporters up to Rs 1,450 ($34.50) a tonne for transportation costs to the ports, Agriculture Minister Sharad Pawar said March 29 in New Delhi.

Domestic sugar prices have fallen by more than a fifth in the past year because of record output, reducing local producers’ earnings. This prompted the government to lift a ban on exports in July to stop the prices from sliding.

Drop prices or you’ll be made to, govt warns pharma firms

Mint reports

India could increase the number of drugs for which it fixes prices under the Drug Price Control Order (DPCO) from 74 to 354—the number of essential drugs according to the government—if pharmaceutical companies did not keep their promise to reduce prices, according to the Union minister for chemicals, petrochemicals and fertilizers, Ram Vilas Paswan.

Last year, the government had fixed the wholesale and retail margins on around 1,000 branded generics (off-patent drugs) at 15% and 35%, respectively.

The prices of these drugs are not determined by the National Pharmaceutical Pricing Authority (NPPA), which enforces DPCO.

The margins on some of these were as high as 1,000% before the government’s order, which was expected to result in a significant reduction in prices of drugs from October onwards.

Some of the companies hadn’t yet complied with this order, said Paswan.

Brass parts makers strike metal

FE reports

Nearly 3,000 brass part units in Jamnagar, Gujarat, will go on a symbolic one-day strike to protest the substantial surge in the prices of brass scrap, a key raw material used by the industry. Both at the London Metal Exchange (LME) and domestic commodity exchanges, the prices of brass parts have been constantly rising for the past four months.

Attributing speculative trading as the reason for the rise, brass parts manufacturers said that the prices of brass scrap have increased to Rs 270 per kg, from Rs 215 - Rs. 230 four months ago. Surprisingly, the prices were as low as Rs 80 - Rs 100 two years ago.

Government, private firms and wheat

BS writes in an edit

The large corporations who are participants in the wheat trade have been informally requested by the Central government to not buy wheat from Punjab and Haryana. The context is that last year, firms like Cargill and ITC had bought up roughly 1.3 million tonnes, or 17 per cent, of Punjabs wheat output, by paying Rs 20 per quintal more than the price offered by the government. The legitimacy of the governments request is suspect, and various industries (cement, steel) have demonstrated in recent weeks that they are not about to panic because the government frowns on their pricing or other decisions. Everyone knows that the government has the power to order tight stocking limits for essential commodities thus forcing wheat supplies into the market. Still, can and (perhaps more important) should the government come in the way of a private transaction between two citizens of India?

Government might lower petrol prices

FE reports

Petrol and diesel consumers need not expect any immediate cut in fuel prices as the government will consider a reduction only when international crude oil prices fall further and the Indian basket of crude oil touches the $52-a-barrel level.

Politicians may not love markets, but they love to play it