Mumbai, July 29
Consumers are likely to feel the pinch of rising food prices in the upcoming festive season, as erratic rainfall in growing areas and thin stocks coupled with high demand could push up prices further.

Higher food prices during festivals may also create fresh problems for the government, which has been struggling over the past several months to contain inflation.

India’s food price index rose 7.33 per cent in the year to July 16, government data on Thursday showed.

OUT OF REACH?

n Erratic rainfall in growing areas and thin stocks coupled with high demand could push up prices n Spot prices of chana, or, chickpea, the most consumed pulse in India, have also risen 24% over two months n Onion price at the country's largest wholesale onion trading hub in Lasalgaon, in Maharashtra, has jumped 55 per cent over two months n Sugar and soyoil prices are up over 4% n Lower area under groundnut and firmness in international market are supporting upside in edible oils

“Festivals are there from next month. They will boost demand. We may see further rise in prices of edible oil and pulses,” said Badruddin Khan, associate vice-president, research, at Angel Commodities Broking.

Patchy rainfall in central and southern India at the beginning of monsoon season and heavy rainfall in July in few areas delayed sowing and affected growth of some crops, lifting prices ahead of the festive season.

"Every year during festivals sugar demand goes up. Stockists have raised purchases in the past few days. Demand will remain robust," said Ashok Jain, president, Bombay Sugar Merchants Association.

Rising vegetable prices are also disrupting household budgets.

Average onion price at the country's largest wholesale onion trading hub in Lasalgaon, in Maharashtra, has jumped 55 per cent in two months on depleting stockpiles from last year's winter-sown crop and plantation delay this year.

Traders said vegetable supplies have been disrupted due to erratic rainfall and are unlikely to improve before September.

Spot prices of chana, or, chickpea, the most consumed pulse in India, have also risen 24 per cent in the past two months, while chana futures are now close to their highest level in nearly five years.

Prices of other pulses like tur, urad and moong have also risen over 10 per cent during the period while sugar and soyoil prices are up over 4 per cent.

"Carry-forward stocks (of chana) have depleted, but stockists' demand is rising due to festivals. In next two-three months chana may rise by another 10 percent," said Nitin Kalantri, a dal miller based in Latur, Maharashtra.

Industry officials also attribued the rise in chana prices to the lower area under under kharif, or, summer-sown pulses.— Reuters

New Delhi, July 29
With electricity and steel showing healthy production growth, the eight core infrastructure industries expanded by 5.2 per cent in June as against 4.4 per cent in the same period last year.

The industries — crude oil, petroleum refinery products, natural gas, fertilisers, coal, electricity, cement and finished steel — have a weight of 37.90 per cent in the overall index of industrial production.

With addition of two sectors — fertilisers and natural gas — the number of key infrastructure sectors, picked up separately for measuring performance has now gone to eight. Electricity and steel grew by 8.2 per cent and 12.5 per cent in June from 3.8 per cent and 4.3 per cent in the same month in 2010, according to the provisional data released today.

Crude oil production grew by 7.7 per cent in the month under review from 6.8 per cent in the comparable period of last year. Petroleum refinery products too grew by 4.7 per cent from 2.9 per cent.

However, natural gas, cement, coal and fertiliser showed a negative growth of 11.7 per cent, 0.8 per cent, 3.3 per cent and 2.4 per cent, respectively. During April-June 2011-12, the growth of core industries slowed down to 5.0 per cent from 6.8 per cent in the same quarter previous year.

The growth of eight core infrastructure industries slowed down to 5.3 per cent in May against 7.4 per cent a year ago. — PTI

Mumbai, July 29
The BSE Sensex posted its biggest monthly decline in six months and closed 0.1 percent lower on Friday as investors fretted over slowing domestic growth after a series of interest rate increases and the possibility of a US. debt default.

The market is expected to be rangebound in August on views most known negatives were in the price even as investors stay wary of risky assets due to US and euro zone's debt concerns.

State-run explorer Oil & Natural Gas Corp fell 2.9 percent after it reported quarterly profit that missed street estimates as higher subsidy payments offset gains from a rise in crude oil and gas prices.

ICICI Bank firmed 1.9 percent after the top private sector lender said it expects loan growth at 18 percent for the current fiscal year and net interest margin should be maintained at 2.6 percent.

The main 30-share BSE index closed 0.07 percent, or 12.32 points, lower at 18.197.20 points, with 18 components losing ground.

It lost 2.8 percent this week, its biggest weekly decline since the first week of May, and fell 3.4 per cent in July — its biggest monthly fall since January.

"There is too much of pessimism on the Europe and U.S front, but most negatives are priced in as far our (Indian) market is concerned,' said Om Ahuja, head of private wealth management at Emkay Global. "A steep downside looks unlikely right now." — Reuters

Mumbai, July 29
ICICI Bank lagged market estimates with a 30 percent rise in first-quarter profit, as strong loan growth and lower provisions for bad loans were offset by higher expenditure.

The bank said net profit in the June quarter rose to Rs 1,332 crore ($302 million) from Rs 1,026 crore a year ago. Its net interest income (NII) grew 21 per cent to Rs 2,411 crore.

Its provisions and contingencies fell more than 40 per cent to Rs 454 crore due to improvement in asset quality. Net non-performing assets fell to 1.04 per cent at June-end from 1.87 per cent a year ago.

Most Indian banks, including top lenders State Bank of India and HDFC Bank have seen a rise in loan demand in the past few quarters in Asia's second-fastest growing major economy.

However, higher interest rates are expected to curb consumer spending and hit demand.

The Reserve Bank of India raised its key policy rates by a larger-than-expected 50 basis points on Tuesday. It also cut credit growth forecast for banks to 18 per cent from 19 per cent projected earlier. — Reuters

New Delhi, July 29
About half a dozen public sector lenders, including Punjab National Bank (PNB), IDBI Bank and Central Bank of India today increased their lending and deposit rates by up to 1.5 per cent. While all loans, including home and auto will become expensive, depositors will get better returns on their savings.

The country's second largest public sector lender, PNB, Central Bank of India and IDBI Bank raised base rate to 10.75 per cent. Mumbai-based IDBI Bank increased deposit rates by 25-150 bps.

The hikes have been undertaken "keeping in view the measures announced by RBI, inflation and liquidity scenario," an IDBI statement said. — PTI

Chandigarh, July 29
Canon India is now taking a franchisee route to expand sales. With the photography and digital imaging industry set to become a Rs 10,000-crore industry in India by 2015, Canon is spreading its retail network so as to get a major chunk of the pie.

The company plans to open 50 exclusive retail stores by the year end and by 2013 and is targeting 300 retail stores and plans to spread across 100 cities and towns.

Alok Bhardwaj, senior vice president, Canon India, said that they will be opening 12 stores in North India at Ludhiana, Jalandhar, Amritsar, Bathinda, Mohali, Karnal, Faridabad, Ambala, Panchkula, Shima, Jammu and Srinagar.

"With the expansion of our retail network, we hope that we will be able to achieve a revenue target of Rs 4,600 crore by 2015, of which Rs 1,000 crore will come from our retail outlets. This year, we are expecting sales to be around Rs 1,700 crore," he said.

Canon India is eyeing government business . “Government business contributes 20 per cent to our revenues and is one of the fastest growing sectors. With the government business growing 25 per cent this year, we are getting aggressive there,” he said.

“We are supplying laser printers, digital SLR and fax machines, besides cameras and multi-functional devices for digitisation of records, to various departments in J&K, Punjab and Haryana,” he added.

Mumbai, July 29
India-Japan Free Trade Agreement will come into operation from August 1, giving improved access to Indian medicines in the Japanese market and also provide opportunity to professionals like English teachers to take up short-term assignments in the world's third largest economy.

Under the Comprehensive Economic Partnership Agreement, signed in February, the two economies will eliminate import duties on 94 per cent of their trade items in 10 years. The agreement will give a boost to the bilateral trade which may touch $25 billion by 2015. A big Japanese market for pharmaceutical, which had largely remained restricted, will be thrown open for the Indian drug manufacturers. — PTI

Washington, July 29
US market regulator Securities & Exchange Commission has slapped penalties of over $16 million on spirits giant Diageo Plc for indulging in corrupt practices in India, Thailand and South Korea to push up sales of its leading brands like Johnnie Walker.

Detailing the practices, SEC said: “In India, from 2003 through mid-2009 Diageo made over $1.7 million in illicit payments to hundreds of Indian government officials responsible for purchasing or authorising the sale of its beverages.”

“Increased sales from these payments yielded more than $11 mn in ill-gotten gains,” it added. Diageo sells brands such as Johnnie Walker whisky and Smirnoff vodka, among others in India. — PTI

New Delhi, July 29
Hit hard by higher raw material costs, Steel Authority of India (SAIL) today reported a 29 per cent dip in net profit to Rs 838 crore for the first quarter of the current fiscal despite nearly 20 per cent jump in sales. The state-run firm had posted net profit of Rs 1,177 crore in the same quarter last fiscal, a company release said.

“During Q1, SAIL had to bear an additional expenditure of nearly Rs 580 crore on cost of coal alone. Of this, around Rs 422 crore was on account of higher cost of imported coking coal, with prices rising from $200 per tonne in Q1 last year to $330 in Q1 2011-12,” SAIL said.