India’s plans to lower income taxes, increase wages and boost spending risk fueling price gains that will force the central bank to raise interest rates further.
Finance Minister Pranab Mukherjee yesterday unveiled plans to increase spending by 13.4 percent to 12.6 trillion rupees ($278.3 billion) for the financial year starting April 1. The government is boosting incomes through wider exemptions from individual tax payments, reduced costs for some housing loans and the allocation of 1.44 trillion rupees in subsidies.
“The budget hasn’t done enough to curb price pressures and the central bank may have to continue to do the heavy lifting to slow inflation,” said Sonal Varma, an economist at Nomura Holdings Inc. in Mumbai. “More rate actions are in the offing starting this month.”
Prime Minister Manmohan Singh’s government faces five state elections this year and said last week that its “foremost” priority is to curb inflation, which reduces purchasing power in a nation where the World Bank estimates more than three-quarters of the people live on less than $2 a day. The central bank has raised its benchmark rate seven times in the past year and signaled more increases at its last meeting in January.
Stocks Gain
The Bombay Stock Exchange’s Sensitive Index, or Sensex, rose 0.7 percent yesterday and bonds gained as the government pledged to trim its budget shortfall. The Sensex has lost 13 percent this year, making it the world’s third-worst performing benchmark index, on concern government measures to quell inflation will hurt economic growth.
India’s $1.3 trillion economy expanded 8.2 percent last quarter, making it the fastest-growing major economy after China, government figures showed yesterday. The benchmark wholesale- price inflation rate averaged 9.4 percent in the nine months through December, the most in the past decade, the finance ministry said in a report on Feb. 25.
Singh’s budget must be approved by India’s parliament, where the ruling coalition has been battling opposition protests over corruption allegations for months. The final parliament session of 2010 was the least productive in 25 years.
Even as he reduced the income-tax burden, Mukherjee moved to boost levies in other areas that might contribute to price pressures. The finance chief included more services under the tax net to lift revenue. Taxes would now be collected from air- conditioned restaurants, hotels, airlines and hospitals.
Drug Prices
He also imposed an excise duty of 10 percent on branded garments and raised the levy on drugs, textiles and medical equipment to 5 percent from 4 percent. Cipla Ltd., an Indian drugmaker, plans to pass on the increase in excise duty on medicines to customers, its Chief Financial Officer S. Radhakrishnan said yesterday.
“I doubt the budget has anything very concrete to dent inflation,” said Samiran Chakraborty, a Mumbai-based chief economist at Standard Chartered Plc. “The burden of controlling inflation will be more on the monetary policy in the near term.”
From the next financial year, incomes below 180,000 rupees won’t be taxed, higher than the previous threshold of 160,000 rupees. Mukherjee also announced a 1 percent interest-rate subsidy for housing loans up to 1.5 million rupees and said the government will give cash to the poor to buy kerosene.
Rail Fares
India’s state-controlled railway operator last week said it will leave passenger and freight charges unchanged to help tackle inflation that accelerated to the fastest in a decade.
“The central bank is getting some help from the budget but not very much,” said Leif Eskesen, an economist at HSBC Holdings Plc in Singapore. “It has to carry the burden on really addressing the near-term inflation pressures.”
The finance ministry estimates GDP may grow as much as 9.25 percent in the year starting April 1. The government estimates growth in revenue will outpace outlays, forecasting the budget deficit will narrow to 4.6 percent of gross domestic product in the financial year starting April 1 from 5.1 percent of GDP in the previous year.
“The budget may be difficult to deliver in practice as growth assumptions are quite optimistic and they are relying on a significant compression of non-planned spending including a decline in the subsidy bill,” HSBC’s Eskensen said. “If delivered as planned, it will be contractionary. There may be more subsidy outlays later in the year.”
Deficit Reduction
Mukherjee cut taxes and stepped up government spending in 2008 and 2009 to provide stimulus worth more than 4 percent of GDP to cushion the Indian economy from the impact of the global financial crisis.
If the 4.6 percent fiscal deficit target “is met, then it will be a massive withdrawal of stimulus,” said Jahangir Aziz, an economist at JPMorgan Chase & Co. in Mumbai. “It will be largest fiscal consolidation, if it is done, in the history of India.”
The government plans debt sales of 4.17 trillion rupees in the next financial year, less than the estimated 4.47 trillion rupees this year. Yields on benchmark 10-year government bonds were at 8.02 percent late yesterday in Mumbai, compared with the two-year high of 8.25 percent reached on Jan. 10, according to data compiled by Bloomberg.
The Reserve Bank is next expected to release its monetary policy decision on March 17. Governor Duvvuri Subbarao on Feb. 26 declined to comment on whether the central bank would take interest-rate action between scheduled monetary policy announcement days.
“Growth will slow down next year as the Reserve Bank of India tightening takes effect,” said Dharmakirti Joshi, a Mumbai-based economist at Crisil Ltd., the local unit of a Standard & Poor’s Ratings Services. “The government is taking steps to ease inflation in the budget and the RBI, on its part, will raise interest rates further.”
Monday, February 28, 2011
Agriculture reform key to India budget
India is to embark on an overhaul of its struggling farm sector in an effort to cool rising food prices that have landed the country with the highest inflation of any leading Asian economy.
Pranab Mukherjee, India’s finance minister, put the rural economy at the heart of a national budget on Monday, saying ridding the farm sector of crippling supply bottlenecks would be his “focus” in the coming fiscal year.
A market-neutral budget supporting agriculture, welfare schemes and the extension of banking services to more people was designed to dispel any sense that the Congress party-led government was in drift after a series of high profile corruption scandals.
Yet its timidity was met with widespread criticism for failing to push forward a reform agenda.
Lord Desai, the economist and UK Labour peer, said: "It's a disappointing budget. The government has lost direction. All Pranab Mukherjee is doing is treading water.
“The government has decided to abandon the urban middle class and go to the rural areas."
Rajiv Kumar, the director of the Federation of Indian Chambers of Commerce and Industry, described the budget as"pro-growth" but holding no bold outcomes.
The 74-year-old finance minister assured parliament that India would hit 9 per cent growth next year, and cut its fiscal deficit to 4.6 per cent.
He warned that India needed to invest far more in agriculture to boost productivity and enlarge storage facilities to help reduce the spiralling prices of fruit and vegetables.
He announced a credit flow target of Rs4,750bn ($105bn) to the agriculture sector and offered a 3 per cent interest subsidy to farmers.
The finance minister stressed the need to achieve balanced nutrition in a country where severe malnutrition afflicts a large number of people, and to combat the degradation of the nation’s soil.
An immediate reduction in food prices is key to Manmohan Singh, India’s prime minister, in meeting a target of bringing inflation down to 7 per cent or below by the end of next month. Inflation was 8.2 per cent in January, while food prices were rising 11 per cent.
Mr Singh will be hoping that the measures announced on Monday will help knock down what he calls “the kingpin of India’s price structure” – high agricultural commodity prices.
Rising food prices in a country where an estimated 60 per cent of the 1.2bn population live off the land are one of Mr Singh’s worst problems of his second term in office. His government has been beset by price bubbles in such crops as onions and sugar that have hurt urban and rural populations.
Confronting a structural shift in the agricultural economy, where supply shortages, rising costs and market distortions have created unpopular price pressures, is one of New Delhi’s top priorities.
Duvvuri Subbarao, the governor of the Reserve Bank of India, called at the weekend for “major productivity gains” in a second Green Revolution to advance gains made as far back as the 1960s with more modern farming methods.
He said: “Since rural incomes are going up, people are eating better by shifting from cereal to protein and it is leading to food scarcity".
Farm reforms are long overdue, according to agriculture experts who claim the sector has been badly neglected.
Ashok Gulati, the Asia director of the International Food Policy Research Institute, said agriculture is “strangled” by government controls, suspension of futures markets and export bans.
He said: “Agriculture is crying for a clean sweep of market reforms as was done for industry [20 years ago],”.
Performance in the farm sector varies considerably across India. Some farmers have benefited from market prices and crop diversification, while others suffer hardship under the government’s minimum support price regime.
E Vadivel, former dean of the horticulture department at Tamil Nadu Agriculture University, said returns to Indian farmers were higher for fruits and vegetables over staple crops like rice and wheat.
He said: “I tell farmers, don’t go for paddy, pulses or oilseeds. Abandon these crops. They are all linked to the public distribution system, and the government will never allow the price to rise.”
Ranjit Singh Ghuman, head of economics at Punjabi University in Patiala, said the government had sleepwalked into an agrarian crisis where incomes were declining and rural people increasingly searching for other avenues of work.
He said: “The view was that the Green Revolution would take care of everything. There was no focus on the quality of education and skills to make the youth employable in non-farm sectors.
“But now the opportunity in farming is shrinking.”
Pranab Mukherjee, India’s finance minister, put the rural economy at the heart of a national budget on Monday, saying ridding the farm sector of crippling supply bottlenecks would be his “focus” in the coming fiscal year.
A market-neutral budget supporting agriculture, welfare schemes and the extension of banking services to more people was designed to dispel any sense that the Congress party-led government was in drift after a series of high profile corruption scandals.
Yet its timidity was met with widespread criticism for failing to push forward a reform agenda.
Lord Desai, the economist and UK Labour peer, said: "It's a disappointing budget. The government has lost direction. All Pranab Mukherjee is doing is treading water.
“The government has decided to abandon the urban middle class and go to the rural areas."
Rajiv Kumar, the director of the Federation of Indian Chambers of Commerce and Industry, described the budget as"pro-growth" but holding no bold outcomes.
The 74-year-old finance minister assured parliament that India would hit 9 per cent growth next year, and cut its fiscal deficit to 4.6 per cent.
He warned that India needed to invest far more in agriculture to boost productivity and enlarge storage facilities to help reduce the spiralling prices of fruit and vegetables.
He announced a credit flow target of Rs4,750bn ($105bn) to the agriculture sector and offered a 3 per cent interest subsidy to farmers.
The finance minister stressed the need to achieve balanced nutrition in a country where severe malnutrition afflicts a large number of people, and to combat the degradation of the nation’s soil.
An immediate reduction in food prices is key to Manmohan Singh, India’s prime minister, in meeting a target of bringing inflation down to 7 per cent or below by the end of next month. Inflation was 8.2 per cent in January, while food prices were rising 11 per cent.
Mr Singh will be hoping that the measures announced on Monday will help knock down what he calls “the kingpin of India’s price structure” – high agricultural commodity prices.
Rising food prices in a country where an estimated 60 per cent of the 1.2bn population live off the land are one of Mr Singh’s worst problems of his second term in office. His government has been beset by price bubbles in such crops as onions and sugar that have hurt urban and rural populations.
Confronting a structural shift in the agricultural economy, where supply shortages, rising costs and market distortions have created unpopular price pressures, is one of New Delhi’s top priorities.
Duvvuri Subbarao, the governor of the Reserve Bank of India, called at the weekend for “major productivity gains” in a second Green Revolution to advance gains made as far back as the 1960s with more modern farming methods.
He said: “Since rural incomes are going up, people are eating better by shifting from cereal to protein and it is leading to food scarcity".
Farm reforms are long overdue, according to agriculture experts who claim the sector has been badly neglected.
Ashok Gulati, the Asia director of the International Food Policy Research Institute, said agriculture is “strangled” by government controls, suspension of futures markets and export bans.
He said: “Agriculture is crying for a clean sweep of market reforms as was done for industry [20 years ago],”.
Performance in the farm sector varies considerably across India. Some farmers have benefited from market prices and crop diversification, while others suffer hardship under the government’s minimum support price regime.
E Vadivel, former dean of the horticulture department at Tamil Nadu Agriculture University, said returns to Indian farmers were higher for fruits and vegetables over staple crops like rice and wheat.
He said: “I tell farmers, don’t go for paddy, pulses or oilseeds. Abandon these crops. They are all linked to the public distribution system, and the government will never allow the price to rise.”
Ranjit Singh Ghuman, head of economics at Punjabi University in Patiala, said the government had sleepwalked into an agrarian crisis where incomes were declining and rural people increasingly searching for other avenues of work.
He said: “The view was that the Green Revolution would take care of everything. There was no focus on the quality of education and skills to make the youth employable in non-farm sectors.
“But now the opportunity in farming is shrinking.”
Sunday, February 27, 2011
JPMorgan Fund Seeks Minority Stake in Twitter
JPMorgan Chase’s new fund aimed at investing in social-media companies is seeking to buy a minority stake in Twitter that could value the micro-messaging site at close to $4.5 billion, people briefed on the matter told DealBook on Sunday.
It is not clear whether the fund, known as the J.P. Morgan Digital Growth Fund, will invest directly in Twitter or directly buy up current investors’ stakes with the company’s consent, these people said. They cautioned that talks were ongoing and may not lead to a deal.
Investments by the fund are expected to extend to other parts of the social-media universe, a broad and rapidly expanding group of companies ranging from the gaming giant Zynga to group-coupon providers like LivingSocial.
Spokesmen for Twitter and JPMorgan declined to comment.
The potential investment by the JPMorgan fund, which is being run out of the firm’s asset management unit, marks a rapid rise in Twitter’s valuation. Two months ago, the Internet company raised $200 million from a group of investors led by Kleiner Perkins Caufield & Byers at a $3.7 billion valuation.
Trading of Twitter shares on SharesPost, a secondary market, currently value the company at about $4.3 billion.
The Digital Growth Fund follows in the footsteps of a Goldman Sachs fund that raised about $1 billion from investors outside the United States to buy up a stake in Facebook, giving the social-networking giant a valuation of about $50 billion.
So far, the JPMorgan fund has raised about $1.22 billion from wealthy outside investors, and the firm expects to collect about $13 million in commissions, according to a regulatory filing made on Friday. The minimum investment is set at about $250,000, according to the filing.
The fund is comprised only of money from outside investors, and will not use any of JPMorgan’s own capital.
News of the JPMorgan fund’s plans was first reported on Sunday by The Financial Times.
It is not clear whether the fund, known as the J.P. Morgan Digital Growth Fund, will invest directly in Twitter or directly buy up current investors’ stakes with the company’s consent, these people said. They cautioned that talks were ongoing and may not lead to a deal.
Investments by the fund are expected to extend to other parts of the social-media universe, a broad and rapidly expanding group of companies ranging from the gaming giant Zynga to group-coupon providers like LivingSocial.
Spokesmen for Twitter and JPMorgan declined to comment.
The potential investment by the JPMorgan fund, which is being run out of the firm’s asset management unit, marks a rapid rise in Twitter’s valuation. Two months ago, the Internet company raised $200 million from a group of investors led by Kleiner Perkins Caufield & Byers at a $3.7 billion valuation.
Trading of Twitter shares on SharesPost, a secondary market, currently value the company at about $4.3 billion.
The Digital Growth Fund follows in the footsteps of a Goldman Sachs fund that raised about $1 billion from investors outside the United States to buy up a stake in Facebook, giving the social-networking giant a valuation of about $50 billion.
So far, the JPMorgan fund has raised about $1.22 billion from wealthy outside investors, and the firm expects to collect about $13 million in commissions, according to a regulatory filing made on Friday. The minimum investment is set at about $250,000, according to the filing.
The fund is comprised only of money from outside investors, and will not use any of JPMorgan’s own capital.
News of the JPMorgan fund’s plans was first reported on Sunday by The Financial Times.
Books Fly Off Unusual Shelves
Kitson, a group of boutiques based in Los Angeles, is the kind of store that appears regularly in the tabloids for both its stylish clothes and its celebrity clientele like Sean Combs and Joe Jonas.
But in a town that is all about flash, Kitson is finding a surprising source of revenue that is not from its fashionable shoes or accessories. It is from books.
The company’s owner, Fraser Ross, estimates that Kitson sold 100,000 books in 2010, double what it had the previous year.
Publishers turned aggressive about selling to Kitson, Mr. Ross said, as traditional bookstores switched focus or closed. That “has been good for us,” he said. “If there’s a good book, we’ll go deep into it.” And publishers, he said, “realize what a specialty store can do for their business, with the window and the table.”
Publishers have stocked books in nonbook retailers for decades — a coffee-table book in the home department, a novelty book in Urban Outfitters. In the last year, though, some publishers have increased their efforts as the two largest bookstore chains have changed course.
Barnes & Noble has been devoting more floor space for displays of e-readers, games and educational toys. Borders, after filing for bankruptcy protection in February, has begun liquidating some 200 of its superstores.
“The national bookstore chain has peaked as a sales channel, and the growth is not going to come from there,” said David Steinberger, chief executive of the Perseus Books Group. “But it doesn’t mean that all brick-and-mortar retailers are cutting back.”
A wide range of stores better known for their apparel, food and fishing reels have been adding books. The fashion designer Marc Jacobs opened Bookmarc in Manhattan in the fall. Anthropologie has increased the number of titles it carries to 125, up from 25 in 2003. Coldwater Creek, Lowe’s, Bass Pro Shops and even Cracker Barrel are adding new books. Some mass retailers, too, are diversifying — Target, for instance, is moving away from male-centered best sellers and adding more women’s and children’s titles this year.
Having a physical outlet for books is extraordinarily important, publishers say. While online and e-book sales are huge channels, lesser-known books can get lost in that world if they do not have a physical presence to spur interest. The ability to catch a shopper’s eye in a store is almost impossible to mimic online.
So publishers are approaching just about anyone with a shelf. For Perseus, sales at nontraditional retailers in 2010 outpaced its sales at Borders, which were around 7 percent, for the first time.
For Abrams, which publishes illustrated and art books, nontraditional retailers are seen as one way to offset the business lost by Borders, which has slowed especially in the last year, the Abrams president and chief executive, Michael Jacobs, said.
“We’ve definitely cranked it up,” Mr. Jacobs said. Last year, executives realized that “so much of our backlist wasn’t being carried by bookstores. If we’re still doing these books, where are we going to sell them?”
The nontraditional category has been growing for Abrams, making up more than 15 percent of its total business in 2010. Mr. Jacobs said he expected that it would grow to 25 percent in the next two to three years. Big publishers, too, like Houghton Mifflin Harcourt and Random House, say they have been seeking out specialty retailers.
The attention from publishers comes as a welcome surprise to the stores.
“The response has been dramatic. There are piles of book samples and catalogs dropped off in the shop every day,” Jennifer Baker, a book buyer for Marc Jacobs, said in an e-mail. “The assortment of rare and out-of-print books have been a challenge to keep in stock.”
Placement in different stores can widen the audience for books, appealing to someone who would not spend time at a Barnes & Noble. “A customer who might not often buy books but adores the brand can ease in to the Bookmarc selection,” Ms. Baker said.
Beyond attracting new readers, book sales tend to be a good deal for both sides.
Though sales to nonbook retailers can be more complicated and labor-intensive for publishers, books are generally sold on a nonreturnable basis. Bookstores, on the other hand, can return unsold books to publishers.
“We know it’s a nice clean sale,” said John Duff, publisher of Perigee Books, an imprint of Penguin Group USA.
The books tend to be profitable for the retailers, since they select them carefully and do not usually mark them down. More important, they can drive other purchases and help with branding.
At Lowe’s, books on subjects like cooking and home projects are stacked at the front of the store, “inspiring and informing customers to purchase goods that will allow them to successfully complete home improvement projects,” Patti Price, the company’s senior vice president for merchandising, said in an e-mail.
At Sam’s Club, which has long carried stacks of best sellers, more children’s books and cookbooks have been added lately. “Those are areas that don’t fit as well into the e-book story, like the best seller or mass-market or even romance books do,” said Phil Shellhammer, a Sam’s Club executive who oversaw the books category there until recently. Sam’s Club has been using its bricks-and-mortar advantage in other ways, too, like adding books from local writers, and bringing in authors for signings.
If Anthropologie is selling ikat prints, it might feature books with ikat covers, or it will carry books about inspiration and poetry to get the customer in an escapist mood.
“As we try to get them excited about different ideas as they walk in the door, books can be a tremendous way to narrate those stories,” said Aaron Hoey, head merchant for home and accessories at Anthropologie. “We do a very good job of selecting unique books, books you’re not going to find in a typical bookstore, and certainly not in a mass-market bookstore like Borders or Barnes & Noble. And to stumble across it at Amazon, you have to really know what you’re looking for.”
The specialty stores can be a boon for publishers selling quirky titles unlikely to get on Amazon’s home page. “Awkward Family Photos” is a hot item at Urban Outfitters, “Hello, Cupcake,” about cupcake design, has been selling strongly at the craft store Michaels, and Price Stern Sloan, another Penguin imprint, sold 42,000 copies of “Mad Libs” in January alone — at Cracker Barrel. At Bookmarc, where fashion titles sold predictably well, executives were surprised when “Erotic Poems” by E. E. Cummings started flying off shelves.
At Kitson, too, the top sellers hardly mimic the best-seller list, including books like “How to Raise a Jewish Dog” and “The Official Dictionary of Sarcasm.”
“We try to be different,” Mr. Ross said.
But in a town that is all about flash, Kitson is finding a surprising source of revenue that is not from its fashionable shoes or accessories. It is from books.
The company’s owner, Fraser Ross, estimates that Kitson sold 100,000 books in 2010, double what it had the previous year.
Publishers turned aggressive about selling to Kitson, Mr. Ross said, as traditional bookstores switched focus or closed. That “has been good for us,” he said. “If there’s a good book, we’ll go deep into it.” And publishers, he said, “realize what a specialty store can do for their business, with the window and the table.”
Publishers have stocked books in nonbook retailers for decades — a coffee-table book in the home department, a novelty book in Urban Outfitters. In the last year, though, some publishers have increased their efforts as the two largest bookstore chains have changed course.
Barnes & Noble has been devoting more floor space for displays of e-readers, games and educational toys. Borders, after filing for bankruptcy protection in February, has begun liquidating some 200 of its superstores.
“The national bookstore chain has peaked as a sales channel, and the growth is not going to come from there,” said David Steinberger, chief executive of the Perseus Books Group. “But it doesn’t mean that all brick-and-mortar retailers are cutting back.”
A wide range of stores better known for their apparel, food and fishing reels have been adding books. The fashion designer Marc Jacobs opened Bookmarc in Manhattan in the fall. Anthropologie has increased the number of titles it carries to 125, up from 25 in 2003. Coldwater Creek, Lowe’s, Bass Pro Shops and even Cracker Barrel are adding new books. Some mass retailers, too, are diversifying — Target, for instance, is moving away from male-centered best sellers and adding more women’s and children’s titles this year.
Having a physical outlet for books is extraordinarily important, publishers say. While online and e-book sales are huge channels, lesser-known books can get lost in that world if they do not have a physical presence to spur interest. The ability to catch a shopper’s eye in a store is almost impossible to mimic online.
So publishers are approaching just about anyone with a shelf. For Perseus, sales at nontraditional retailers in 2010 outpaced its sales at Borders, which were around 7 percent, for the first time.
For Abrams, which publishes illustrated and art books, nontraditional retailers are seen as one way to offset the business lost by Borders, which has slowed especially in the last year, the Abrams president and chief executive, Michael Jacobs, said.
“We’ve definitely cranked it up,” Mr. Jacobs said. Last year, executives realized that “so much of our backlist wasn’t being carried by bookstores. If we’re still doing these books, where are we going to sell them?”
The nontraditional category has been growing for Abrams, making up more than 15 percent of its total business in 2010. Mr. Jacobs said he expected that it would grow to 25 percent in the next two to three years. Big publishers, too, like Houghton Mifflin Harcourt and Random House, say they have been seeking out specialty retailers.
The attention from publishers comes as a welcome surprise to the stores.
“The response has been dramatic. There are piles of book samples and catalogs dropped off in the shop every day,” Jennifer Baker, a book buyer for Marc Jacobs, said in an e-mail. “The assortment of rare and out-of-print books have been a challenge to keep in stock.”
Placement in different stores can widen the audience for books, appealing to someone who would not spend time at a Barnes & Noble. “A customer who might not often buy books but adores the brand can ease in to the Bookmarc selection,” Ms. Baker said.
Beyond attracting new readers, book sales tend to be a good deal for both sides.
Though sales to nonbook retailers can be more complicated and labor-intensive for publishers, books are generally sold on a nonreturnable basis. Bookstores, on the other hand, can return unsold books to publishers.
“We know it’s a nice clean sale,” said John Duff, publisher of Perigee Books, an imprint of Penguin Group USA.
The books tend to be profitable for the retailers, since they select them carefully and do not usually mark them down. More important, they can drive other purchases and help with branding.
At Lowe’s, books on subjects like cooking and home projects are stacked at the front of the store, “inspiring and informing customers to purchase goods that will allow them to successfully complete home improvement projects,” Patti Price, the company’s senior vice president for merchandising, said in an e-mail.
At Sam’s Club, which has long carried stacks of best sellers, more children’s books and cookbooks have been added lately. “Those are areas that don’t fit as well into the e-book story, like the best seller or mass-market or even romance books do,” said Phil Shellhammer, a Sam’s Club executive who oversaw the books category there until recently. Sam’s Club has been using its bricks-and-mortar advantage in other ways, too, like adding books from local writers, and bringing in authors for signings.
If Anthropologie is selling ikat prints, it might feature books with ikat covers, or it will carry books about inspiration and poetry to get the customer in an escapist mood.
“As we try to get them excited about different ideas as they walk in the door, books can be a tremendous way to narrate those stories,” said Aaron Hoey, head merchant for home and accessories at Anthropologie. “We do a very good job of selecting unique books, books you’re not going to find in a typical bookstore, and certainly not in a mass-market bookstore like Borders or Barnes & Noble. And to stumble across it at Amazon, you have to really know what you’re looking for.”
The specialty stores can be a boon for publishers selling quirky titles unlikely to get on Amazon’s home page. “Awkward Family Photos” is a hot item at Urban Outfitters, “Hello, Cupcake,” about cupcake design, has been selling strongly at the craft store Michaels, and Price Stern Sloan, another Penguin imprint, sold 42,000 copies of “Mad Libs” in January alone — at Cracker Barrel. At Bookmarc, where fashion titles sold predictably well, executives were surprised when “Erotic Poems” by E. E. Cummings started flying off shelves.
At Kitson, too, the top sellers hardly mimic the best-seller list, including books like “How to Raise a Jewish Dog” and “The Official Dictionary of Sarcasm.”
“We try to be different,” Mr. Ross said.
Bangladesh to Boost Food Reserves as `People Are Suffering,' Minister Says
Bangladesh, South Asia’s biggest rice buyer, is in talks with India to buy grains on a regular basis to bolster food security as governments seek to avoid a repeat of the unrest that broke out when prices last soared.
A long-term agreement will protect Bangladesh from possible defaults by private traders, who sometimes fail to meet their commitments if prices gain, Muhammad Abdur Razzaque, the nation’s food minister, said in an interview yesterday. “Rice prices rose this year in our country; people are suffering as they have limited income,” Razzaque said by phone from Dhaka.
Bangladesh’s plan underscores a drive by governments to strengthen their reserves to help manage the impact of food prices that advanced to a record last month, beating the jump in 2008 that spawned riots from Haiti to Egypt. This year’s surge has driven millions into extreme poverty, according to the World Bank, and contributed to unrest in the Middle East and Africa.
“When we go for international tenders and prices suddenly rise, private suppliers sometimes fail to fulfill their commitments,” Razzaque said. “They don’t supply us and put us in trouble. It has happened.”
Wheat, corn, soybeans and palm oil have surged in the past year on increased demand and supply disruptions, driving the Food & Agriculture Organization’s World Food Price Index to an all-time high in January. The jump has boosted inflation, adding to the case for higher interest rates worldwide as central banks also contend with rising oil prices spurred by a revolt in Libya.
Roubini’s Warning
Higher commodity prices are “leading to riots, demonstrations and political instability,” Nouriel Roubini, the New York University professor who predicted the financial crisis, said last month. Costlier food “can topple regimes,” he said.
Bangladesh has a population of 166 million, with 32 percent aged less than 15, according to Bloomberg data. Slightly smaller than the U.S. state of Iowa, it ranks 196th among nations when compared by gross domestic product per head on a purchasing- power-parity basis, according to the CIA World Factbook. The country is often hit by cyclones that form in the Bay of Bengal.
Governments around the world will “take preemptive measures to prevent increases in food prices,” Alan Winney, chairman of Emerald Group Australia Pty Ltd., has said. Bolivia will tap central-bank reserves to stockpile food and spur farm production, Finance Minister Luis Arce said on Feb. 10.
Thai Prices
Thai rice prices, the benchmark for Asia, have gained over the past six months. The price of 100 percent grade-B white rice, which is set weekly, was $550 a metric ton on Feb. 23, according to the Thai Rice Exporters Association. Last year’s low in July was $458 a ton. Thailand is the world’s biggest rice supplier.
Increased purchases of rice by Bangladesh from neighboring India may lower Thai prices, according to Rakesh Singh, a trader at Emmsons International Ltd. Bangladesh has agreed to purchase 300,000 tons of Indian rice, as well as 200,000 tons of wheat, Razzaque said on Feb. 9.
Surging food costs hit the most vulnerable hardest as they spend a greater share of their money on food, World Bank President Robert Zoellick said earlier this month. People in developing countries devote half or three-quarters of their income to food, “so they’ve got little margin,” Zoellick said.
Coarse rice in Dhaka, the Bangladeshi capital, climbed to 34.93 taka (49 cents) per kilogram in December, 42 percent higher than a year earlier, the FAO said in a Jan. 17 report.
Bangladesh has doubled its rice-import target to cool local prices as consumers and farmers hoarded supplies. The country will buy 1.2 million tons in the year to June 30, from a 600,000-ton target set in November, Badrul Hasan, director for procurement at the Directorate General of Food, said last month.
The government may buy as much as 2.5 million tons of rice and wheat in the year to June 30, while private companies may import 2 million tons of wheat in the period, Razzaque said. If the planned Indian purchases happen “our imports will exceed 1.2 million tons this year ending June,” he said yesterday.
The price of rice may increase as a rally in wheat drives consumers to seek alternatives, Robert Zeigler, director general of the International Rice Research Institute, said on Feb. 11. Wheat in Chicago has surged 57 percent over the past 12 months.
A long-term agreement will protect Bangladesh from possible defaults by private traders, who sometimes fail to meet their commitments if prices gain, Muhammad Abdur Razzaque, the nation’s food minister, said in an interview yesterday. “Rice prices rose this year in our country; people are suffering as they have limited income,” Razzaque said by phone from Dhaka.
Bangladesh’s plan underscores a drive by governments to strengthen their reserves to help manage the impact of food prices that advanced to a record last month, beating the jump in 2008 that spawned riots from Haiti to Egypt. This year’s surge has driven millions into extreme poverty, according to the World Bank, and contributed to unrest in the Middle East and Africa.
“When we go for international tenders and prices suddenly rise, private suppliers sometimes fail to fulfill their commitments,” Razzaque said. “They don’t supply us and put us in trouble. It has happened.”
Wheat, corn, soybeans and palm oil have surged in the past year on increased demand and supply disruptions, driving the Food & Agriculture Organization’s World Food Price Index to an all-time high in January. The jump has boosted inflation, adding to the case for higher interest rates worldwide as central banks also contend with rising oil prices spurred by a revolt in Libya.
Roubini’s Warning
Higher commodity prices are “leading to riots, demonstrations and political instability,” Nouriel Roubini, the New York University professor who predicted the financial crisis, said last month. Costlier food “can topple regimes,” he said.
Bangladesh has a population of 166 million, with 32 percent aged less than 15, according to Bloomberg data. Slightly smaller than the U.S. state of Iowa, it ranks 196th among nations when compared by gross domestic product per head on a purchasing- power-parity basis, according to the CIA World Factbook. The country is often hit by cyclones that form in the Bay of Bengal.
Governments around the world will “take preemptive measures to prevent increases in food prices,” Alan Winney, chairman of Emerald Group Australia Pty Ltd., has said. Bolivia will tap central-bank reserves to stockpile food and spur farm production, Finance Minister Luis Arce said on Feb. 10.
Thai Prices
Thai rice prices, the benchmark for Asia, have gained over the past six months. The price of 100 percent grade-B white rice, which is set weekly, was $550 a metric ton on Feb. 23, according to the Thai Rice Exporters Association. Last year’s low in July was $458 a ton. Thailand is the world’s biggest rice supplier.
Increased purchases of rice by Bangladesh from neighboring India may lower Thai prices, according to Rakesh Singh, a trader at Emmsons International Ltd. Bangladesh has agreed to purchase 300,000 tons of Indian rice, as well as 200,000 tons of wheat, Razzaque said on Feb. 9.
Surging food costs hit the most vulnerable hardest as they spend a greater share of their money on food, World Bank President Robert Zoellick said earlier this month. People in developing countries devote half or three-quarters of their income to food, “so they’ve got little margin,” Zoellick said.
Coarse rice in Dhaka, the Bangladeshi capital, climbed to 34.93 taka (49 cents) per kilogram in December, 42 percent higher than a year earlier, the FAO said in a Jan. 17 report.
Bangladesh has doubled its rice-import target to cool local prices as consumers and farmers hoarded supplies. The country will buy 1.2 million tons in the year to June 30, from a 600,000-ton target set in November, Badrul Hasan, director for procurement at the Directorate General of Food, said last month.
The government may buy as much as 2.5 million tons of rice and wheat in the year to June 30, while private companies may import 2 million tons of wheat in the period, Razzaque said. If the planned Indian purchases happen “our imports will exceed 1.2 million tons this year ending June,” he said yesterday.
The price of rice may increase as a rally in wheat drives consumers to seek alternatives, Robert Zeigler, director general of the International Rice Research Institute, said on Feb. 11. Wheat in Chicago has surged 57 percent over the past 12 months.
Asian Stocks Fall as Middle East Concern Lingers; Honda, Bluescope Decline
Asian stocks fell, extending the regional benchmark’s decline last week, as concern persisted over political unrest in the Middle East. Honda Motor Co., a carmaker that receives 84 percent of its revenue abroad, lost 1.8 percent in Tokyo, and Sony Corp., Japan’s biggest electronics exporter, sank 0.9 percent as the yen strengthened. NEC Corp., Japan’s biggest maker of personal computers, slumped 3.4 percent after Goldman Sachs Group Inc. lowered its rating on the stock. BlueScope Steel Ltd., Australia’s biggest steelmaker, slid 1.9 percent in Sydney after saying that government carbon tax will hurt its competiveness.
The MSCI Asia Pacific Index fell 0.4 percent to 136.32 as of 10:20 a.m. in Tokyo, with eight stocks declining for every three that advanced. The gauge sank 2.1 percent last week as crude oil climbed above $100 a barrel for the first time in two years amid escalating violence in Libya, which has the largest oil reserves in Africa.
“In addition to concerns that the political unrest in the Middle East, especially in Libya, will continue, the yen will also likely play a role in holding back investors,” said Koichiro Nishio, a market analyst in Tokyo at Nikko Cordial Securities Inc.
Japan’s Nikkei 225 Stock Average slumped 0.5 percent and Australia’s S&P/ASX 200 Index decreased 0.3 percent. South Korea’s Kospi Index lost 0.9 percent.
Consumer Confidence
Futures on the Standard & Poor’s 500 Index slipped 0.3 percent today. The gauge rose 1.1 percent on Feb. 25 in New York, preventing the biggest weekly drop in the Standard & Poor’s 500 Index since August, as confidence among American consumers beat forecasts.
Confidence among U.S. consumers increased more than forecast in February to the highest level in three years as a drop in unemployment helped overcome concern over increasing food and fuel costs. The Thomson Reuters/University of Michigan final sentiment index for the month advanced to 77.5 from 74.2 the prior month.
Woodside Petroleum Ltd., Australia’s second-largest oil and gas producer, rose 1.2 percent in Sydney as concern grew that political turmoil that has cut Libya’s output may spread to other parts of the Middle East. Rival Santos Ltd. climbed 1.9 percent.
Crude oil for April delivery climbed 0.6 percent to settle at $97.88 a barrel on the New York Mercantile Exchange on Feb. 25, retreating from $103.41 earlier in the week, the highest since September 2008.
The MSCI Asia Pacific Index fell 0.4 percent to 136.32 as of 10:20 a.m. in Tokyo, with eight stocks declining for every three that advanced. The gauge sank 2.1 percent last week as crude oil climbed above $100 a barrel for the first time in two years amid escalating violence in Libya, which has the largest oil reserves in Africa.
“In addition to concerns that the political unrest in the Middle East, especially in Libya, will continue, the yen will also likely play a role in holding back investors,” said Koichiro Nishio, a market analyst in Tokyo at Nikko Cordial Securities Inc.
Japan’s Nikkei 225 Stock Average slumped 0.5 percent and Australia’s S&P/ASX 200 Index decreased 0.3 percent. South Korea’s Kospi Index lost 0.9 percent.
Consumer Confidence
Futures on the Standard & Poor’s 500 Index slipped 0.3 percent today. The gauge rose 1.1 percent on Feb. 25 in New York, preventing the biggest weekly drop in the Standard & Poor’s 500 Index since August, as confidence among American consumers beat forecasts.
Confidence among U.S. consumers increased more than forecast in February to the highest level in three years as a drop in unemployment helped overcome concern over increasing food and fuel costs. The Thomson Reuters/University of Michigan final sentiment index for the month advanced to 77.5 from 74.2 the prior month.
Woodside Petroleum Ltd., Australia’s second-largest oil and gas producer, rose 1.2 percent in Sydney as concern grew that political turmoil that has cut Libya’s output may spread to other parts of the Middle East. Rival Santos Ltd. climbed 1.9 percent.
Crude oil for April delivery climbed 0.6 percent to settle at $97.88 a barrel on the New York Mercantile Exchange on Feb. 25, retreating from $103.41 earlier in the week, the highest since September 2008.
India forecasts strong growth for 2012
The Indian economy is expected to grow by as much as 9.25 per cent next year the country’s finance ministry said on Friday as it urgently strives to win back draining confidence among international investors.
India’s investment appeal has declined rapidly over the past three months as investors worry about a series of high profile corruption scandals, high inflation and the ability of the government to keep its fiscal deficit in check.
India’s economy is forecast to grow at 8.6 per cent in the year to the end of next month and prime minister Manmohan Singh nurses ambitions of pushing it higher to double digits to rival China. But, only days ahead of Monday’s national budget, investors are wary of any signs of a loss of momentum in India’s high growth rates as the country battles the highest inflation of any major Asian economy and capital flight from emerging markets.
In its annual Economic Survey, released on Friday, the finance ministry gave strong assurances that India could remain on its high growth trajectory, saying that economic growth would advance to a range of between 8.75 per cent and 9.25 per cent in the coming fiscal year.
It cautioned, however, about the threat of inflationary pressures from rising global commodity prices and a domestic consumption boom in India. Inflation is running at about 8.2 per cent in spite of pledges by Mr Singh to reduce it to below 6 per cent by the end of last year.
“The inflationary pressures on the domestic front are likely to be exacerbated by the higher levels of global commodity prices,” said the survey tabled by Pranab Mukherjee, the finance minister, in parliament.
Samiran Chakraborty, senior economist at Standard Chartered in Mumbai, said India was confronted by a “perfect storm” of inflation, a governance deficit and worries about financing its fiscal deficit.
“The big storm is the governance deficit,” he said. “But I don’t think what we have seen over the past three months can continue for another six months.”
“It’s a big question whether India will be able to finance its growth. It’s going to be a challenge when we are not going to get foreign money. There are fears that growth could go below 7 per cent.”
Mr Chakrabarty also said that foreign investors were concerned about issues surrounding the predictability of India’s business environment, particularly inconsistent tax treatments of their investments and unclear policy direction.”
In spite of a dramatic fall in investment growth, local industrialists expressed confidence that India’s troubles could be ridden out in the coming months in spite of the shadow cast by high crude prices on a nation dependent on imported oil.
“Right now we are definitely not the flavour of the month,” said Anand Mahindra, chief executive of Mahindra & Mahindra and a major Mumbai-based industrialist. “But that does not mean that we won’t be flavour of the year.”
Maintaining a high growth rate is crucial to absorb the millions of job seekers emerging from the Indian education system in a country where 70 per cent of the 1.2bn population is under the age of 35 years of age.
“India needs to see transformative growth in order to create adequate livelihoods for the population that is entering the workforce every year,” said Chanderjit Banerjee, the secretary-general of the Confederation of Indian Industry.
The Economic Survey also for the first time signalled the government’s possible approval of allowing large corporate houses to hold banking licences as the country tries to extend financial services across the country and into rural areas.
The Reserve Bank of India, the central bank, had been expected to issue guidelines on the issue of new banking licences by the end of last month.
India’s investment appeal has declined rapidly over the past three months as investors worry about a series of high profile corruption scandals, high inflation and the ability of the government to keep its fiscal deficit in check.
India’s economy is forecast to grow at 8.6 per cent in the year to the end of next month and prime minister Manmohan Singh nurses ambitions of pushing it higher to double digits to rival China. But, only days ahead of Monday’s national budget, investors are wary of any signs of a loss of momentum in India’s high growth rates as the country battles the highest inflation of any major Asian economy and capital flight from emerging markets.
In its annual Economic Survey, released on Friday, the finance ministry gave strong assurances that India could remain on its high growth trajectory, saying that economic growth would advance to a range of between 8.75 per cent and 9.25 per cent in the coming fiscal year.
It cautioned, however, about the threat of inflationary pressures from rising global commodity prices and a domestic consumption boom in India. Inflation is running at about 8.2 per cent in spite of pledges by Mr Singh to reduce it to below 6 per cent by the end of last year.
“The inflationary pressures on the domestic front are likely to be exacerbated by the higher levels of global commodity prices,” said the survey tabled by Pranab Mukherjee, the finance minister, in parliament.
Samiran Chakraborty, senior economist at Standard Chartered in Mumbai, said India was confronted by a “perfect storm” of inflation, a governance deficit and worries about financing its fiscal deficit.
“The big storm is the governance deficit,” he said. “But I don’t think what we have seen over the past three months can continue for another six months.”
“It’s a big question whether India will be able to finance its growth. It’s going to be a challenge when we are not going to get foreign money. There are fears that growth could go below 7 per cent.”
Mr Chakrabarty also said that foreign investors were concerned about issues surrounding the predictability of India’s business environment, particularly inconsistent tax treatments of their investments and unclear policy direction.”
In spite of a dramatic fall in investment growth, local industrialists expressed confidence that India’s troubles could be ridden out in the coming months in spite of the shadow cast by high crude prices on a nation dependent on imported oil.
“Right now we are definitely not the flavour of the month,” said Anand Mahindra, chief executive of Mahindra & Mahindra and a major Mumbai-based industrialist. “But that does not mean that we won’t be flavour of the year.”
Maintaining a high growth rate is crucial to absorb the millions of job seekers emerging from the Indian education system in a country where 70 per cent of the 1.2bn population is under the age of 35 years of age.
“India needs to see transformative growth in order to create adequate livelihoods for the population that is entering the workforce every year,” said Chanderjit Banerjee, the secretary-general of the Confederation of Indian Industry.
The Economic Survey also for the first time signalled the government’s possible approval of allowing large corporate houses to hold banking licences as the country tries to extend financial services across the country and into rural areas.
The Reserve Bank of India, the central bank, had been expected to issue guidelines on the issue of new banking licences by the end of last month.
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