Anger in jewelery circles over GST hike in gold

- Commodity Current: Jayavadan Gandhi

The world is once again in a state of panic over Corona's panic. Investors are taking the situation seriously, with new types of corona infestations rising in South Africa and Botswana, with fears of another lockdown. The sell-off, with foreign investors withdrawing money, has led to a sharp fall in the stock market as well as the commodity market. The world economy is also being hit by the profiteering of foreigners due to Christmas and New Year celebrations abroad. Even in the parallel commodity of the stock market, futures on NCDEX in the agri sector have seen red marks in many things. Business is booming in many commodities including guar, coriander, soybean, cotton. There is also panic in futures between the lower circuits.

Gold prices have surpassed the 2,000 level amid a sharp rise in the stock market. However, falling silver prices have come down to Rs 2,000 per kg. Apart from this, crude oil as well as metals in all commodities including aluminum, zinc, nickel, copper are also in a slump. Along with the rising gold boom, there are fears that the government's move to increase the GST on gold from three per cent to five per cent will hurt jewelery business. At a time when even three per cent GST is costly to consumers, if the government imposes five per cent GST on gold, it is feared that smuggling and unsubsidized business will be encouraged again. The government is in the process of raising the tax rate against the demand of reducing the tax burden to one or two per cent. The business was moving from number one to compulsory hallmarking. But now fears of a tax hike are likely to push the gray-market currency higher again.

Despite lower circuits in items including guar and coriander, the market is heading for a downturn. Guar gum December futures are down 4 per cent and guar seed is down 3 per cent with a lower circuit of around 10,200 and 200, respectively. If there is presence of exporters in the presence of guar, it will look a bit roaring, otherwise it will be sluggish. Due to which upper or lower circuit is seen in guar futures. However, nowadays the foreign consumption in guar is increasing. But at the local level, the peasantry is not ready to sell guar at low prices. As the export of guar is increasing, the consumption of millers at the local level may also increase. However, due to the current downturn in guar, there is a possibility that guar seed may reach a low level of 200 and guar seed 200. Guar is also getting bearish support due to declining crude oil market.

Due to the rise in cumin-coriander, the selling pressure is increasing. Cumin has risen by about ten per cent in the last month. Demand is rising due to the wedding season. Exports were weak in October. However, cumin has been planted less than 20 to 5 per cent in Gujarat and 10 to 15 per cent less in Rajasthan. Coriander has also seen a rise of 8 to 10 per cent. Lack of goods is fueling the boom against rising local and foreign demand. At the same time, the wedding season has been supported. Even in coriander cultivation, the growth in coriander has been steadily increasing due to reports of less than 30 to 5 percent in Gujarat and 30 percent less in Rajasthan than last year. Coriander's carry forward stock of coriander is also expected to be a more profitable commodity in the new year 203 due to speculation of lower class. As a result, the expectations that the coriander market may go up to the level of 1500 in the near future have become brighter. Currently, the market is constantly sliding around nine thousand.

In addition, soybeans are currently booming with a circuit above more than three per cent. Soybean December futures have risen from 200 to 300. Due to the decision to import soymeal, the prices of soybeans have come down during the season and the farmers have stopped selling them as they are even lower than the MSP. In Maharashtra, soybean prices were above Rs 7,000.