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Uniqlo Manila is biggest flagship store in SE Asia


A GUEST gets overwhelmed by the perfectly folded shirts on display. It takes five minutes to decide which to buy among the six available colors of the round neck shirt. The chosen color is tossed into a shopping bag (along with five other staple pieces in neutral colors). The possibility of sharing the same outfit with everyone else is no problem thanks to its design versatility and function.
In 1949, a textile manufacturer opened in Yamaguchi, Japan. Then Tadashi Yanai took over his father’s business in 1984 and named the brand “Unique Clothing Warehouse” with the goal on establishing his own casual clothing store. The name was contracted to “Uniqlo” in 1988. Today, Uniqlo has over 1,000 stores worldwide.
On the sixth anniversary since its arrival in the Philippines, the Japanese casual retailer opened its flagship store at Glorietta 5, Ayala Ave. in Makati city — the biggest in Southeast Asia.
“Our global flagship stores are designed as showcases to the world, displaying the very best that Uniqlo has to offer. Uniqlo Manila is an important example of our commitment to Southeast Asia. It is one of the largest Uniqlo stores in the world and is a big step forward in continued Uniqlo growth in the region and globally,” Satoshi Hatase, CEO of Uniqlo Southeast Asia and Oceania, was quoted as saying in a press release.
The atrium area of the 4,100-sq.m. flagship store, like those abroad, has a 360 LED screen and rotating mannequins, this time wearing outfits from the Our Future is Here collection. The store’s pillars sport artworks by the Plus63 Design Group.
The ground floor of the store offers the complete lineup of men’s and ladies’ LifeWear, has a large kids and baby section, a tech wear section featuring the brand’s AIRism and HEATTEACH clothes, and seasonal collections. The second floor houses the Uniqlo UT Jump 50th, MAGIC FOR ALL (a collaboration with The Walt Disney company), and the Smart Travel collection.
A display featuring the collaborative design project of Japanese stylist Shun Watanabe and Filipino visual artist Leeroy New showcases former’s on-trend styling and the latter’s creative headpieces.
“It’s not about the clothes. It’s about the people wearing them, their lifestyle, and how the clothes can make their life better,” Georgette Barrera-Jalasco, marketing director of Uniqlo Philippines, told BusinessWorld at the store’s launch on Oct. 4.
Also at the second floor is a video game area where visitors can try out the soon-to-be-released Jump Force video game by BANDAI NAMCO Entertainment.
After long hours of shopping, visitors can rest their weary feet at the Uniqlo terrace at the second floor, overlooking Glorietta 4, which features furniture by designer Kenneth Cobonpue.
The flagship store in Manila is the 15th global flagship store in Uniqlo’s 11 global markets. — Michelle Anne P. Soliman

15 Taiwan firms seek Mindanao partners

DAVAO CITY — Another business delegation from Taiwan, composed mainly of companies in four industries, is coming to Davao on Oct. 19 to showcase their products and explore partnerships with local businesses.
The 15 companies are in cosmetics, electronics and home furnishings, agricultural and industrial machineries, and food, according to the Mindanao Business Council (MinBC).
“There is a possibility that dealership agreements will eventually be signed,” MinBC Executive Director Rolando A. Torres told BusinessWorld.
MinBC has partnered with Manila-based Taiwan Trade Center for the series of business matching activities, the first of which was held in March. Another delegation from the health care industry arrived in August.
The Taiwanese group that was supposed to attend the Mindanao Business Conference last September were unable to travel for the event due to typhoon Mangkhut.
For this month’s visit, three cosmetics companies are bringing beauty products for adults and infant care goods.
Those in electronics will have lighting products, closed circuit television camera system, and other similar items.
The machinery firms will showcase their equipment for agriculture and manufacturing as well as seismic monitoring systems.
On food, companies are set to introduce organic goods like multi-grain flakes and milk, juices, and condiments.
Arturo M. Milan, president of the Davao City Chamber of Commerce and Industry, Inc., said the continued interest of the Taiwanese businesses is an indication that they recognize Mindanao’s economic growth potential.
“We just need to prepare ourselves in ensuring that the potentials are realized,” Mr. Milan told BusinessWorld.
He also reiterated the need to develop economic zones to attract more investors alongside the implementation of the revised law on ease of doing business. — Carmelito Q. Francisco

Infrastructure, connectivity issues impeding PHL e-payments growth

DIGITAL PAYMENTS remain pivotal in financial inclusion, industry players said, as physical and cultural issues are seen to be key barriers in serving the unbanked sector.
In “The Future of Finance Philippines” conference held by The Asian Banker on Friday, key figures in the banking industry emphasized the value of harnessing digital payments in the Philippines where infrastructure and connectivity problems continue to hamper growth.
Mamerto Tangonan, USAID/E-PESO Activity’s Chief of Party said digital payments are “important” as they promote financial inclusion.
“Digital payments reduce the cost of providing financial services by 80-90%. That makes it cheaper for customers to for accepting cash deposits and withdrawals as well as enabling customers to move money from their account to another,” Mr. Tangonan said in the forum held in Makati City, adding that electronic means of sending money can also boost economic growth and improve the quality of life.
Despite its potential to boost economic development and bringing the unbanked into the formal financial system, Mr. Tangonan noted that e-payments usage in the Philippines remains low.
“To appreciate the seriousness of this problem, we are at the bottom of our ASEAN peers, lagging behind Vietnam in terms of the number of digital payments users.”
Several panelists noted cultural and physical barriers to embracing e-payments in the country, which include the functionality of bank accounts and complexity in opening such.
Joyce L. Suficiencia, acting deputy director of the Bangko Sentral ng Pilipinas’ (BSP) Inclusive Finance Advocacy Office, noted that transaction accounts are only viewed as a storage for money.
“Payment is a basic and the most used financial service in the country by Filipinos, and yet it is still primarily an over-the-counter and cash-based transaction, undermining its potential to be a gateway to financial inclusion,” she said.
Aside from this, Asian Development Bank Principal Economist Jong Woo Kang said opening a bank account is also a problem.
“A lot of people do not want to open an account in financial institutions because there are cumbersome documentary requirements and identification verification procedure. There is also some physical distance to the branches of the banks or [automated teller machines],” he said.
To address these barriers, BSP’s Ms. Suficiencia said the government must solve infrastructure issues in the country while financial institutions must introduce more compelling uses of owning a transaction account.
“We don’t only need to address operational barriers to opening an account like the lack of documents and funds, but we also need to ensure that an account can have practical use for the unbanked beyond being a storage of value,” she said.
“Our goal is to democratize access to transaction accounts and to make it useful not only as a [storage] of money but also as a convenient and affordable [tool] to make and receive payments.”
Aside from this, panelists noted that channelling wages, paying for utilities and government services, as well as transferring funds to another account through digital platforms may also be valuable ways to use bank accounts.
“If transferring money across platforms will be made easier and affordable, we can expect digital payments to fly,” Antonio Owen S. Maramag, senior vice-president at the Development Bank of the Philippines, said.
The Bangko Sentral ng Pilipinas launched the National Retail Payments System framework in 2015 with the objective of promoting a “cash-lite” economy wherein financial transactions will veer away from cash and check and toward electronic fund transfers and digital wallets.
The BSP targets to raise the share of digital payments to 20% of total transactions by 2020 from a measly one percent in 2013. — Karl Angelo N. Vidal

Durian’s next incarnation might be wine

By Maya M. Padillo
Correspondent
DAVAO CITY — Durian — the funky-smelling, strong-tasting fruit that people either love or hate — has been developed into many processed forms, including sweets, ice cream, and flavored coffee.
But one man from Davao City is on a mission to bring southeast Asia’s “king of fruits” on the table in a different form — as a bottle of “premium wine.”
Arnold B. Llanes, who started experimenting with durian wine two years ago, said he is now seriously looking at setting up a winery in Davao City.
Mr. Llanes has been doing his fermentation in a shared facility in Kabacan, Cotabato owned by his brother, which is accredited by the Food and Drug Authority.
“When we started two years ago, it was in experimental stage. My durian wine underwent one year fermentation. We use all varieties of durian… what is also important is that the durian is ripe,” Mr. Llanes said in an interview.
He estimates that a winery would cost about P500,000, which his business partners, mostly relatives, are ready to fund.
Mr. Llanes said he is now on the lookout for a location and hopes to get help from the Department of Science and Technology (DoST) for the equipment.
The entrepreneur said that he is also banking on a continued abundant supply of the fruit from farmers to sustain production.
“We saw that every durian season, there is a lot of supply. And because some are sold so cheap (as low as P20 per kilo), we readily throw them away,” he said.
One kilo of durian can produce one 750-milliliter bottle of wine, which sells at the Abreeza Mall for P480 each.
He said people describe the white wine, which has a 15-16% alcohol content, as “smells like durian and tastes like wine.”
He said the durian smell, not just the taste, actually disappears in the fermentation process.
“It’s converted into alcohol… there really is no taste of durian,” he said.
Mr. Llanes said with the winery, he aims to expand his market and eventually export the product.
“Wine has a broad market and the plus factor is, it is durian wine. This is unique and this is the first durian wine in Mindanao.”

This year’s HABI fair includes ASEAN weavers and indigenous fabrics

SOME of the finest examples of Philippine-made textile products take center stage at this year’s HABI trade fair. The three-day trade event pays tribute to the country’s traditional weavers who hail from communities supported by HABI. Their unique skills were given tremendous exposure during the previous fairs and this expertise has since become a viable source of income for them. “Woven Voyages: 8th Likhang Habi Textile Fair 2018” will take place at the Activity Area of the Glorietta Mall in Ayala Center, Makati City on Oct. 12 to 14. It is open to the public.
Organized by the nonprofit organization HABI The Philippine Textile Council, the fair is designed to showcase the artistry of the country’s indigenous weavers. More than 80 exhibitors will take part this year, making it HABI’s biggest trade fair to date. And for the first time, the show will include textile exhibitors from the ASEAN region, namely, the weaving communities of Brunei, Indonesia, Myanmar, Malaysia, and Vietnam.
HABI is placing special emphasis on products made of natural fabrics and will include merchandise of established brands that use the fabrics made by the weavers.
There will be fashionable bags adorned with the cloth made by the Yakans of Basilan; hand-woven blankets, covers, and napkins from the Ilocos region; and toys and novelty items made by local craftsmen.
Among the exhibitors are established brands and manufacturers such as Rurungan sa Tukod Foundation, Interweave, Yakang Yaka, Manila Collectible, Casa Mercedes, Filip+Inna, Gifts & Graces Foundation, Good Luck, Humans, La Herminia Piña, Liwayway Handicraft, Creative Definitions, Kalinga Weaving, Ayala Foundation, Inc., and items by noted Filipina designer Ditta Sandico.
The fair is held each year to provide a major venue for the local weavers to present their wares. It offers them the opportunity to tap Metro Manila’s consumer market by giving them free space in the show. It also allows them to deal directly with wholesale buyers, foreign buyers, and stores. “This way, the middlemen, who had been buying the products from them at lower rates and selling them at much higher prices, are eliminated,” said Maribel Ongpin, HABI’s founder.
“We also want to attract more fashion designers,” says Adelaida Lim, the Baguio-based businesswoman and a member of HABI. “We want them to discover how these fabrics can be used for contemporary fashion, and not just for traditional costumes.”
The participation of the weavers from the ASEAN communities may also open new doors for their local counterparts, said Ms. Ongpin. “The weavers from each country can learn from each other and they may have the opportunity to tap each other’s markets,” she said.
The fair includes a fashion show highlighting the woven fabrics in designs by Patis Tesoro, Len Cabili of Filip+Inna, LARA Samar, Jor-el Espina, Boy Guino-o of Alfonso Davao, Twinkle Ferraren, Malaysian designer Edric Ong, and Laura Fontan of Vietnam fashion house Chula. There will also be an exhibit featuring the textile art of Filipina-French artist Olivia d’Aboville, and the works of the winners of the Lourdes Montinola Weaving Competition. There will also be workshops and lectures on sustainability, and a tribal food lounge.

OUTLIER: Metropolitan Bank & Trust Co. (MBT)

By Marissa Mae M. Ramos
MACROECONOMIC CONCERNS dragged stocks, including that of Metropolitan Bank & Trust Co. (MBT), in the first trading week of October.
Data from the Philippine Stock Exchange showed the Ty-controlled Metrobank trading P739.440 million worth of 11.009 million shares from Oct. 1 to 5, making it the seventh most actively traded stock last week.
On a week-on-week basis, its share price was down by 1.19% to P66.2 apiece last Friday from its closing share price of P67 on Sept. 28. Year-to-date, the bank’s share price was down by 36.71%.
For Papa Securities Corp. deputy research head Arabelle C. Maghirang, concerns over the Philippine economy continue to adversely impact stock prices.
AP Securities, Inc. research analyst Rachelle C. Cruz attributed overall stock performance last week to the interest rate hikes.
“This is because in a rising rates environment and tightening system liquidity, banks are affected by higher funding costs,” she said.
Ms. Cruz noted that for MBT in particular, “[i]ntense market competition, especially in the corporate segment, resulted to sticky lending rates in the first half of 2018.”
“This will likely be the story also for the second half of 2018. In contrast, deposit rates have been adjusting faster — thus, NIM (net interest margin) upside will be limited,” she added.
Papa Securities’ Ms. Maghirang concurred: “The intact ratios of MBT… might not matter if the macroeconomic concerns would still persist in the market.”
According to its unaudited report, Metrobank’s net interest margin — the difference between interest income earned and interest paid — on their average earning assets for the first half of 2018 was at 3.77%, slightly higher than 3.72% of last year’s comparable period and 2017’s recorded 3.75%.
Investors continued to be cautious as Bangko Sentral ng Pilipinas in its Sept. 27 meeting fired off another 50-basis point (bp) increase in benchmark rates to demonstrate its commitment to temper price pressures and quell inflation expectations.
The central bank has hiked benchmark yields by a cumulative 150 bp since May. Further, latest inflation data show a 6.7% inflation rate in September — its highest in over nine years.
Prior to Friday’s inflation report, the Philippine Stock Exchange index entered bear market territory for the fourth time this year after closing at 7,132.36 last Tuesday, 21.3% below this year’s peak of 9,058.62 on Jan. 9.
Looking forward, Papa Securities’ Ms. Maghirang hopes for the next inflation report to be a “catalyst for positive sentiments” to help the equities market’s recovery.
For AP Securities’ Ms. Cruz, MBT’s stock price is expected to trade within the P64 support and P69 resistance levels this week “as there is no major catalyst to push the price higher.”
“For the year, I am looking at an earnings growth of 9% to P23 billion — driven mainly by its core lending business, as well as recovery of its fee-income segment,” she added.
According to its unaudited financial statements, Metrobank had already posted an P11.926-billion net income from January to June, up by 9.97% from 2017’s P10.845 billion.

Peso to weaken on hawkish Fed

THE PESO is seen to weaken further this week as likely mixed US data and hawkish Federal Reserve officials may boost the attractiveness of the greenback.
The local unit ended last week at P54.23 against the dollar, nine centavos stronger than the previous close, as market players reacted to a lower-than-expected inflation reading for September, which helped ease negative sentiment towards the peso.
However, the peso weakened week-on-week from Sept. 28’s P54.02-per-dollar finish.
Ruben Carlo O. Asuncion, UnionBank of the Philippines chief economist, said the market will be looking at external factors this week.
“It seems that the peso has been quite stable after the last hike,” Mr. Asuncion said in a text message. “Anything that will influence [the peso] otherwise, I think, would be more coming from the outside.”
Guian Angelo S. Dumalagan, market economist at Land Bank of the Philippines, said the dollar is expected to move sideways with an upward bias “supported by likely US producer and consumer price inflation reports” as well as possibly hawkish remarks from various policy makers.
The peso may start the week on a positive note as the dollar may depreciate following the “weaker-than-expected” US non-farm payrolls report for last month.
The American economy added 134,000 jobs last month due to the drop in employment in the hospitality, leisure and retail sectors. However, unemployment rate fell to 3.7% during the month, its lowest in nearly five decades.
“The dollar’s decline might be minimal at best, especially since other labor report remained generally upbeat, including the unemployment rate…and average hourly earnings which continued to show firm results,” Mr. Dumalagan said in an e-mail.
After trading sideways in the next two days, he said the US currency might strengthen on the back of positive inflation reports as well as likely hawkish statements from various policy makers.
The US core producer price index is expected to rise to 2.5% in September 2018 from 2.3% the prior month and above the 2% target by the US central bank. Likewise, the core consumer price index is seen to climb to 2.3%from 2.2% the prior month.
“Consistent with the trend of rising inflation, US Federal Reserve officials…are expected to provide generally upbeat remarks about the pace of US economic growth,” Mr. Dumalagan noted.
For this week, Mr. Asuncion expects the peso to trade between P54 and P54.30, while the market economist gave a P54-P54.40 range.
“The Philippine trade report and the [European Central Bank] policy meeting minute might introduce some volatility,” Mr. Dumalagan said, adding that “erratic movements” caused by lingering US-China trade tensions as well as alleged cyber attacks on US firms may also provide uncertainty. — K.A.N. Vidal

Farmers group asks Brazil for funds so its coffee farmers can delay sales

SAO PAULO — Brazil’s farmers confederation, CNA, said on Friday it had officially requested government funding for a program that would allow coffee farmers to hold back sales and stock the product to avoid selling at current low prices.
CNA said it met on Thursday with representatives of the ministries of Agriculture and Finance in Brasília, where it suggested the government reallocate money from Funcafé, a fund that finances programs for the coffee sector, to finance a plan to help farmers carry stocks that they could sell later, when prices are more favorable.
“We had a large crop this year and the current flow of coffee is very strong,” CNA head Breno Mesquita said in a statement. “We have to finance the farmer so he could wait longer to sell his coffee and get a better price in the future.”
Mesquita said current coffee prices at around 380 reais per 60-kg (132 lb) bag, compared with 500 reais at this time last year, are hurting farmers’ finances.
“Producers took credit to finance their crops, and will have to pay that back with interest. With these prices, their cash flows will be really bad,” he said.
Coffee farmers have criticized the low prices, saying many producers could abandon their crops. They asked for help from the industry as a way to maintain production levels. — Reuters

A charity and a designer mark their milestones together


ON OCT. 27, the Grand Ballroom of the Marriot hotel will be the venue of a benefit fashion show featuring over a hundred designs with each model walking down the runway for two long minutes.
Red Charity Gala, founded by Tessa Prieto-Valdes and Kaye Tinga, this year marks its 10th anniversary along with that of fashion designer Rajo Laurel who is himself celebrating his 25th year in the industry.
For the gala, Mr. Laurel will showcase the Archipelago collection which he considers “his personal essay on what is Philippine design.”
“Clothes are modern representations of armor. It goes without saying that I am a modern creator of armor. Women of power and strength must have the armor and I am a designer who creates these things,” Mr. Laurel told BusinessWorld after the launch at the Manila Hotel on Oct. 3.
The collection will include several series such as “Orchidia,” “Corales,” and “Zarzuela.”
The Archipelago collection will not only focus on the country’s geography but also nature and culture. “I did not begin the collection with a narrative. It began with an experimentation of different fabrication,” said Mr. Laurel.
He joins past Red Charity Gala honorees Dennis Lustico, Furne One, Michael Cinco, Cary Santiago, Ezra Santos, Jojie Lloren, Lesley Mobo, Chito Vijandre, and Joey Samson.
In support of the Philippine Red Cross and the Assumption High School Batch 1981, and partnering with BENCH as its main presenter, the Red Charity Gala this year has a new beneficiary, the MINT Fashion School, and will raise scholarship funds for students.
The gala will also feature an auction. Among the items to be sold are a Jewelmer strand necklace with 53 semi-baroque Golden South sea pearls, a Bernhardt bed frame and two side tables worth P700,000, and overnight packages in Boracay and Palawan. — Michelle Anne P. Soliman

UPS uses disruptive technologies to stay ahead

DISRUPTIVE technologies such as artificial intelligence (AI), blockchain and drones have been helping United Parcel Service, Inc. (UPS) in how it operates in the logistics industry, which itself is prone to disruptions.
UPS has relied on technology to stay ahead, the logistics company said on Tuesday during the inaugural Innovation Series, a platform organized by the US-ASEAN Business Council, the Makati Business Club and Manila House.
Chris Buono, managing director of UPS Philippines, said as a high-asset, fragmented and competitive industry, logistics has a great potential for disruption.
“Resource usage, growing congestion, urbanization, along with greater advances in technology, customer demand, inefficiency and new developments in materials engineering have really pushed logistics and supply chain management into a state where companies have to innovate to stay ahead of the competition,” he said.
Mr. Buono said UPS was able to use technologies like AI as a tool for data generation, making data more visible, and easier to analyze and utilize.
UPS has developed technology that caters to its customers (UPS Bot and My Choice), retailers and merchants (Where To Go), and predictive logistics (On-Road Integrated Optimization and Navigation tool, or ORION).
In blockchain technology, UPS has applied for a patent for its utilization and distributed ledger technology to route packages in the supply chain. Through this, transparency and efficiency of data among parties in the chain are increased.
UPS is also using drone technology, not only in operations, but also when reaching out to rural communities. Drones have become a solution to the geographical problems faced by the logistics industry. The service focuses on the delivery of health care products to inaccessible communities.
“For UPS, disruption has became a part of how we do things every single day . . . we adopt, we adapt, and then we adept,” Mr. Buono said.
“With the emergence of disruptive technologies like artificial intelligence, blockchain, and smarter transportation, we believe that these technologies should be seen as tools that would make our people more efficient, help us work safer, and create an overall better customer service,” he added.
In the Philippines, he said UPS was still looking at the implementation of these new technologies.
“The opportunity is to be able to grow this country,” he said. “The ability to move into new areas, new markets really is great.”
“Yes, I have plans, but stay tuned,” he said about the company’s expansion plans.
UPS currently has six facilities in the Philippines located in Cebu, Clark, which is the main hub, and Parañaque. It also has a partnership with Air21, allowing it nationwide coverage. — Vincent Mariel Galang

Deepening agriculture crisis in India could hurt Modi’s re-election bid in May

MUMBAI/NEW DELHI — The financial squeeze on India’s farmers is set to worsen because of record high fuel prices and surging costs of fertilisers, posing a challenge to Indian Prime Minister Narendra Modi in an election that must be held by May.
The rise in input prices could not have come at worse time for farmers, already grappling with falling domestic product prices due to rising yields and abundant harvests.
Yet, the government has few easy options to respond. Rival global producers have complained about Indian state support and falling global farm product prices undermine export prospects.
Indian farmers voted overwhelmingly for Modi in 2014. But a fall in rural incomes risks damaging that support next year.
Thousands of farmers marched on New Delhi on Tuesday to demand better prices for their produce. Police responded with teargas and water cannon. Farmers suspended their protests after talks with officials that ran into early Wednesday morning.
But their demands and those of other agriculture workers, who together make up about half India’s 1.3 billion people, have not gone away.
“Although we have decided to end our protest, we still believe that the government is not serious about addressing the concerns of the farmers,” Anil Talan, national secretary of farmers body Bhartiya Kisan Union, said after the march.
Diesel prices have surged 26 percent this year, making tilling fields, harvesting, and transporting crops expensive for India’s 263 million farmers who mostly use diesel tractors.
Alongside rising diesel costs, prices of key fertilizers such as potash and phosphate have jumped nearly 15 and 17 percent respectively in a year, as companies pass on the rise in global prices and the impact of the weak rupee to farmers.
India, the world’s second-biggest producer of staples such as rice and wheat, imports all its potash needs and relies on foreign supplies for nearly 90 percent of the phosphate it uses.
“It’s a double whammy for farmers who have to bear the brunt of lower crop prices and higher input costs,” said Devinder Sharma, an independent food and trade policy analyst, saying this explained “why farmers’ anger has come to the fore.”
Diesel demand is rising as farmers have started harvesting summer crops. After tilling, they will plant wheat and rapeseed, the main winter crops.
Union official Talan said the government needed to prop up commodity prices and keep a lid on farmers’ costs to support the agricultural industry, which accounts for about 16 percent of India’s $2.6 trillion economy.
“Because of higher diesel prices I need to spend nearly 20 percent more on harvesting soybean but soybean prices have crashed this year,” said Uttam Jagdale, a farmer from Pune, about 150 km (94 miles) south of Mumbai.
Nilesh Sable, a cane farmer from Sangli in the western state of Maharashtra, said fertilizer prices were rising each month.
Fertilizer firms say they have little choice but to pass on at least some extra costs due to a sharp fall in the rupee and a 20 percent rise in international potash and phosphate prices.
“Still, we are not passing the entire burden to farmers,” said an official with a state-run fertilizer company, asking not to be named in line with government policy.
Greater farm efficiency is partly to blame. Mechanized farming, high-yielding seed varieties and increased use of pesticides have pushed up harvests. Output of most crops has soared to record levels each year.
India’s production of pulses, such as lentils and beans, surged to 24.51 million tonnes in the year to June 2018, up from 23.13 million tonnes in the previous 12 months.
Imports of pulses, such as lentils from Canada, Australia, and Russia, fell to 1.2 million tonnes in the financial year to March 2019, the lowest since 2000/01 and well below the 6.6 million tonnes imported in 2016/17 after back-to-back failures in the monsoon.
Plentiful supplies extend to other crops. India is set to surpass Brazil as the world’s top sugar producer in the 2018/19 season, but rising output has driven down local sugar prices by 15 percent and left mills nursing losses.
In bid to help the sector, the government unveiled measures last week such as transport subsidies and incentives to export at least 5 million tonnes of sugar. Brazil, Thailand, Australia, and other rival producers were quick to complain.
Vegetable prices, especially onions, cabbage and tomatoes, have also fallen 25 percent from last year, largely because of overproduction. Without enough refrigerated trucks, excess production cannot be stored.
Domestic milk prices dived more than 25 percent in the past year, but a global glut has made Indian exports uncompetitive.
Harish Galipelli, head of commodities and currencies at Inditrade Derivatives & Commodities in Mumbai, said India needed to find markets abroad to reduce its inventories.
“But exports will not be easy, as global prices are depressed, and there is no export parity for most commodities,” he said. — Reuters

Yields on gov’t debt rise

By Mark T. Amoguis,Researcher
YIELDS on government securities went up last week as market players stayed cautious ahead of expectations of a faster September inflation print.
Bond prices dipped as yields climbed by a week-on-week average of 25.29 basis points (bp) week, data from the Philippine Dealing & Exchange Corp. as of Oct. 5 showed.
According to Nicolas Antonio T. Mapa, senior economist at ING Bank N.V.-Manila Branch, last week’s trading was largely influenced by expectations of a faster inflation print.
“Prior to the release, forecasts for elevated levels for price gains may have forced a cautious tone from players while global developments, in particular surging US Treasury yields, also left traders with more incentive to stay sidelined,” Mr. Mapa said.
Carlyn Therese X. Dulay, first vice-president and head of institutional sales at Security Bank Corp., agreed, adding that: “Another factor was the sell-off in US treasuries on higher services PMI (purchasing managers’ index) with the CT10 reaching a high of 3.22%,” referring to the current 10-year US Treasury bond.
The Philippine Statistics Authority reported on Friday that headline inflation printed at 6.7% in September, picking up from 6.4% in August and the 3% logged in the same month last year on the back of faster increases recorded in the heavily weighted food index as well as the non-alcoholic beverages index.
The latest inflation print was the fastest in nearly a decade or since February 2009’s 7.2%.
The September reading was below the BusinessWorld poll median and the Bangko Sentral ng Pilipinas (BSP) estimate of 6.8%, but still within the regulator’s 6.3%-7.1% predicted range. However, it was higher than the 6.4% pegged by the Department of Finance.
For the year thus far, headline inflation averaged at 5%, above the 2-4% government target. The central bank now expects the inflation to average at 5.2% this year.
At the secondary market last Friday, bond yields rose across the board, save for the three-year debt, which declined by 42.32 bps from a week ago, fetching 6.6107%.
“Client demand on the short end supported the levels on the three-year paper which is why yields dropped on this tenor,” Security Bank’s Ms. Dulay explained.
The yield on 182-day Treasury bill (T-bill) climbed the most, adding 80.25 bps to end at 5.4516%. It was followed by 10- and four-year Treasury bonds (T-bond), whose rates increased by 53.23 bps and 48.93 bps, respectively, to 7.7671% and 7.9357%.
Similar upward movements were seen in the yields of the 364- and 91-day T-bills, which added 41.51 bps and 40.73 bps to 5.6911% and 4.7167%, respectively.
Two-, five-, seven-, and 20-year T-bonds climbed 19.18 bps, 6.23 bps, 3.05 bps, and 2.10 bps, respectively, to fetch 6.3908%, 7.1018%, 7.1406%, and 8.3179%.
For this week, Ms. Dulay of Security Bank expects yields to remain within range “with some upward pressure ahead of NFP (non-farm payrolls) data and the scheduled Treasury bill and five-year bond auction, which is expected to fetch 7.10-7.25%.”
ING’s Mr. Mapa added that the Treasury bond auction on Tuesday “will set the tone for the rest of the week.”
The Bureau of the Treasury will offer P15 billion worth of T-bills today, while it will auction off its reissued five-year papers with a remaining life of four years and four months worth P15 billion on Oct. 9.

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