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The Signal (weekly highlights)

  • Akshay Waghmare
  • 12 Aug
  • 3 minutes

  1. Wheat prices ease post export ban

The government’s efforts of banning exports of wheat and wheat products to improve availability of the cereal in the domestic market and thereby reduce its prices have started yielding results. Wheat prices in Indore that had surged from Rs.20,000-21,000 per quintal to Rs.25,000 per quintal after the outbreak of Russia-Ukraine war have now eased to Rs.24,000 per quintal. The prices still remain higher than the Centre’s assured Minimum Support Price (MSP) of Rs.20,150 per quintal.

The government claims to have adequate stocks of wheat. According to Union Agriculture Minister Narendra Singh Tomar, India had wheat stocks of 28.51 million tonnes as on 1 July 2022, higher than the buffer norm of 27.58 million tonnes.

  1. Petroleum products consumption grows by 6.1% in July 2022

Consumption of petroleum products grew by 6.1 per cent to 17.6 million tonnes in July 2022 compared to July 2021. High speed diesel consumption was up year-on-year (y-o-y) by 8.2 per cent to 6.6 million tonnes, while petrol consumption increased by 6.8 per cent to 2.6 million tonnes. Consumption of aviation turbine fuel (ATF) at 581.5 thousand tonnes in July 2022 was a whopping 84.4 per cent higher than its year-ago level.

A total of 72.7 million tonnes of petroleum products was consumed during April-July 2022, 14 per cent higher than during the consumption during the same period a year ago.

  1. Rainfall 19.2% higher than LPA in week ended 10 August 2022

India received 75.1 millimeters rainfall during the week ended 10 August 2022. This was 19.2 per cent higher than the long period average (LPA). Of 36 meteorological subdivisions, six each received normal rainfall (up to 19 per cent below or above LPA) and excess rainfall (20-59 per cent above LPA). Twelve subdivisions received large excess rainfall (60 per cent or more above LPA). Of the remaining, 10 subdivisions received deficient rainfall (20-59 per cent below LPA), while large rainfall deficiency (60 per cent or more below LPA) was seen in two subdivisions.

Cumulative rainfall during 1 June-10 August 2022 amounted to 576.7 millimeters, 7.7 per cent higher than the LPA.

  1. Banks hike deposit rates

Banks have started raising deposit rates since the Reserve Bank of India (RBI) raised repo rate by 50 basis points on 5 August 2022. According to news report in Hindu Business Line, Canara Bank, YES Bank, Indian Overseas Bank, Indian Bank and Ujjivan Small Finance Bank increased their fixed deposit rates in the range of 10 and 25 basis points. Other lenders – IndusInd Bank, Bandhan Bank and ESAF Small Finance Bank revised savings account rates upwards.

Off late, growth in incremental credit disbursed by banks was outstripping the deposit inflows. This seems to have prompted banks to offer better rates on deposits to garner more funds.

  1. Debt worth Rs.350 billion of 100 entities rated by ICRA likely to be downgraded

Owing to the Reserve Bank of India’s (RBI) guidance notes on credit-enhanced (CE) ratings, debt worth Rs.350 billion of 100 entities rated by ICRA could be downgraded. The sectors which are likely to be affected are power, healthcare, engineering, construction and roads.

This will result in an additional capital requirement of around Rs.4 billion for the banking system.

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Akshay Waghmare

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