Comparison between Power Sector and Commodity Sector
Right Stock at Right Price for Right Time
Have you ever invested in a stock on someone's advice to make profit and then has to wait for months, maybe years, to recover capital? Not anymore.
With wide expectation from the market to become one of the prime importer of rice, sugar and edible oil in this year, everyone is keenly watching the global commodity market and the price movements, which could determine supply and price movement in the coming months.
An analysis of the global commodity price in the last few months indicates that the price movement was mixed and clueless but showing a positive bias. Of all the commodities, sugar is drawing the most attention, has India geared up to import more than 5 million tonnes of sugar this year. This gives the distinction of India becoming the largest importer of sugar in the global market.
In the price side movement, global price of sugar is indeed trading at the lower end after touching 50.84 cents in September. This rate is of course, trading at double rate when compared to last year. Globally, Jan – Sept sugar price was at 37.91 cent per kg, which is almost double the rate of 28.21 cent per kg inn 2008. Brazil is the largest producer of sugar in the world and the whole world market is keenly watching the sugar production report from there.
The next commodity, which is drawing much greater attention, is rice because of poor monsoon in the recent months. India has already started import of rice from Thailand. The rate of rice is also at the lower end when compared to the last price. The other commodity is edible oil. The commodity market is expecting Indian to import almost around 10 million tonnes this year. As the price is hovering around $668 per tonne, it is expected not to hurt the government expenditure program.
Power as such is not traded as a commodity and is the most essential ingredient to provide the most critical infrastructure for all other sectors to work. The Power generation in India has constantly grown to 150,323 mw as on June, 2009. But this is not even comparable in any standard with per capita consumption of world average of 2,300 Kwh.
A World Energy Council report has indicated that 44% of Indian household does not have electricity connection at all and nearly 90% of rural habitations rely on forest woods for primary energy.
The prime force of energy generation in India is through thermal generation including gas which accounts for 70% of total generation. Nuclear energy constitutes only 2.4% and 26% is through hydel power. India is highly dependent and relying on fossil fuels for power generation and it has to concentrate in the coming years to focus on non-conventional method. The government has signed the nuclear deal in 2008 with USA to increase it production of energy through nuclear reactors, which are the most cleanest form of energy. However, the impediment in this sector is the high cost involved in erection and maintenance of the installation of nuclear reactors and availability of nuclear fuel. In this front, the most important development achieved is the co-operation being extended by almost all major nuclear fuel supply group of countries.