In this week's wrapup we talk about oil prices, crypto mining, PMC bank, The Basmati Wars and India's clean energy initiatives.
But if you want to check out the Markets edition this week before you go about reading the wrapup, don't forget to click the link here. It's about Beer.
Where is oil headed?
Last year, after oil prices breached historic lows, members of OPEC+ got together and decided to co-operate in a bid to ease their burden. The idea was to cut supply in bits and pieces and help push oil prices higher, thereby making oil production a more profitable enterprise.
And guess what? It worked. From less than $30 a barrel to ~$74 a barrel, oil prices have been on a remarkable recovery. And now that members of OPEC+ are slated to meet once again, everyone’s speculating on what their future course of action may look like.
Will they help rein in prices by drilling more oil? Or will they push prices further by sticking to production cuts? You can find out more here.
The Chinese Blitzkrieg on Bitcoin
China has a peculiar way of dealing with problems. They’ve already banned bitcoin in the past imposing restrictions on trading and transacting with the cryptocurrency. But they have been lax about fully enforcing these laws. In fact, some experts contest this is typical Chinese behaviour. You rarely ever see them fiddling and changing new rules. Instead, they write laws and enforce them as they see fit. Sometimes they go full throttle. Other times not so much.
So you can’t glean any meaningful information by looking at Chinese laws. Instead, you ought to pay attention to what they do. And if their actions are any indication, it seems they are going full throttle with banning all mining operations in the country.
Check out our Tuesday Newsletter to know how serious they are about this initiative this time around.
Is PMC bank finally due for a rescue?
You remember PMC right? The co-operative bank, whose promoters managed to swindle auditors, RBI, and its own depositors. If you don’t recall the tragic enterprise, we’d recommend reading this confession letter from the Managing Director of PMC who was jailed subsequently for his role in the catastrophe. And while the Reserve Bank soon took matters into its own hand, the bank’s depositors were left in a lurch. They couldn’t withdraw most of their money. They didn’t know what was going to happen to PMC. And people died in the process. But now, 2 years on since the collapse, a joint venture involving Centrum Financial Services and BharatPe may just go on to acquire the beleaguered bank and rescue the institution once and for all.
So in this story, we discuss how the RBI is deploying a creative new way to rescue a troubled bank.
The Basmati Wars Rehashed
On Thursday, we talked about rice, intellectual property and the fight for Basmati. In 1997, an American company, RiceTec obtained a patent for a strain of rice never historically grown in America — “Basmati”. They had crossbred India's native plant with a US long rice variety and then claimed exclusive rights over any basmati hybrid grown in the western hemisphere. Naturally, Indians were outraged. How could a corporation claim rights over a native plant that fed billions, and then prevent Indian suppliers from exporting Basmati rice to the US?
So the Indian government challenged this claim. But the thing is, India was fighting an American company over intellectual property infringement, at a time when the country did not have robust domestic IP laws in place. But then we found support from an unlikely source — Pakistan. Learn all about this short-lived alliance here.
How to go green?
Finally, on Friday we talked about India's clean energy initiatives. Particularly about renewable purchase obligations (RPO). It’s a diktat that mandates Discoms (power distribution companies) and large electricity consumers to source a certain percentage of their energy requirement from renewable energy sources. They could do this by setting up their own renewable power plants or buying them from other renewable energy producers. And while they would traditionally source most of this clean energy from solar and wind power companies, the government wants to throw green hydrogen into the mix as well.
So if you want to know how all of this may pan out, you should definitely read the full story here.