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Commodities Briefing 02.Mar 2011

Posted on 02 March 2011 by VRS |  Email |Print

From Time.com: Prices of just about everything have been rising precipitously in recent months — from cotton and corn to copper, and, of course, oil. Generally speaking, high prices for commodities are bad for growth, for two reasons. First, they spark inflationary pressures that can force central banks to hike interest rates, thus slowing down economies. Secondly, they cause consumers and companies to spend more on food, raw materials and energy.
That eats into their ability to spend on other stuff and dampens economic growth as well. With oil at $100, you’d think the world’s economists would be in a frenzy of dire predictions and growth downgrades…………………………………….Full Article: Source

Posted on 02 March 2011 by VRS |  Email |Print

From Efinancialnews.com: A survey of leading fund managers has highlighted doubts about the returns from commodities over the next five years, with those bullish about commodities prices halving since last year. According to the Towers Watson Global Survey which covers 141 investment managers with an average of $109.8bn under management, the number of fund managers saying they were bullish about commodities over the next five years fell from 71% in 2010 to 35% this year.
This comes despite the Super-Cycle Report, published in November 2010 by Standard Chartered, which said the global economy is in a third ’super-cycle’ driven by the industrialisation and urbanisation of emerging markets and global trade, leading to increased commodity demand that may prompt higher prices…………………………………….Full Article: Source

Posted on 02 March 2011 by VRS |  Email |Print

From Reuters: Chinese and Indian demand will fuel a global commodities price rally for another two years before miners and farmers produce enough metals and grains to restrain the charge, Australian and U.S. officials said on Tuesday.

Some analysts have expressed doubts about the sustainability of the price rally, now in its third year, partly because of a manufacturing slowdown in China. Data on Tuesday showed factory growth in China at a six-month low after a series of monetary tightening moves in the world’s second-biggest economy…………………………………….Full Article: Source

Posted on 02 March 2011 by VRS |  Email |Print

From Ctv.ca: Higher prices for oil, metals and other commodities are pushing up prices for manufacturers, but companies are so far absorbing the costs for fear of driving away customers with price hikes.

That dynamic underscores questions that have been at the forefront for more than a week: how long oil prices will stay elevated because of the wave of uprisings across the Middle East and North Africa, how much they might soar if the situation worsens or the unrest spreads to a major supplier such as Saudi Arabia, and whether they will start being passed through to other consumer prices…………………………………….Full Article: Source

Posted on 02 March 2011 by VRS |  Email |Print

From Commodity Online: Speculators are not to blame for commodity price hikes, according to a recent study by the Organization for Economic Cooperation and Development (OECD).

In its latest study for the G20 economies, the report said the main factor behind rising prices for wheat, sugar, cotton, metals, oil and other commodities isn’t speculators, as some have suggested, but that the global demand to consume these goods is growing faster than the supply…………………………………….Full Article: Source

Posted on 02 March 2011 by VRS |  Email |Print

From Radionz.co.nz: The ANZ Commodity Price Index rose 2.7% in February to hit an all-time high, led by skins, then milk powder, sawn timber and venison.

When converted into New Zealand dollars, returns at the farmgate rose 2.9%, which reflects a slight fall in the dollar…………………………………….Full Article: Source

Posted on 02 March 2011 by VRS |  Email |Print

From Bloomberg: Copper, corn and rubber may tumble in the next six months, while gold climbs to a record $1,500 an ounce as turmoil in the Middle East boosts oil, fuels inflation and weakens Chinese raw-material demand, according to UBS AG.

“There’s more potential for a correction in most of the commodities,” Peter Hickson, global commodities strategist at Switzerland’s largest bank, said by phone yesterday. “There’s a risk. And the risk is driven by concerns over inflation, rising oil prices and uncertainty the Middle East represents.”……………………………………Full Article: Source

Posted on 02 March 2011 by VRS |  Email |Print

From Indiatimes.com: After a 400% rally in gold and 480% in silver in the past 10 years, we are seeing a pause amid the magnificent rise in precious metals. The price rise started as part of the liquidity-driven rally in all asset classes, and built pace after the credit crisis in the US, supported by safe-haven demand in the aftermath of the European sovereign debt crisis.
It is now taking a breather. Low interest rates, high liquidity (stimulusdriven ), macro-economic uncertainty and lack of investor confidence in other asset classes were primary drivers of the rally in gold, with a little extra in silver in recent times as gold’s cheaper cousin…………………………………….Full Article: Source

Posted on 02 March 2011 by VRS |  Email |Print

From Mineweb.co.za: Silver continues to hit new highs and headlines as investors look to it as, among other things a safe haven but, there are some that think caution is warranted in the short term.

Speaking to Mineweb.com’s Metals Weekly podcast, silver guru and author of the Morgan Report, David Morgan said that, although he is still very bullish about silver in the long term “with everybody screaming that silver can only go up from this point onward”, he is beginning to get cautious…………………………………….Full Article: Source

Posted on 02 March 2011 by VRS |  Email |Print

From Guardian: The oil price breached $114 a barrel for the first time in more than two-and-a-half years as unrest in the Middle East spread from Libya to Iran.

Oil jumped by as much as 2.3% to a fresh high of $114.36 as police in Tehran used tear gas to disperse anti-government protesters and the US government warned that Libya could descend into civil war if Muammar Gaddafi remained defiant and refuses to quit…………………………………….Full Article: Source

Posted on 02 March 2011 by VRS |  Email |Print

From AFP: World oil prices advanced on Tuesday despite OPEC kingpin Saudi Arabia’s pledge to ensure sufficient supplies to cover Libya’s production shortfall. Brent North Sea crude for delivery in April rose 67 cents to $112.47 per barrel.

New York’s light sweet crude for April, known as West Texas Intermediate (WTI), gained 35 cents to $97.32…………………………………….Full Article: Source

Posted on 02 March 2011 by VRS |  Email |Print

From Bloomberg: The cost of oil imports for the U.S., European Union and Japan may rise about 29 percent to $900 billion this year if crude prices average $100 a barrel, according to estimates from the International Energy Agency.

This would be almost $200 billion more than the U.S., Europe and Japan might have to spend on crude imports this year, “potentially threatening their economic recoveries,” Fatih Birol, the Paris-based agency’s chief economist, said today in an e-mail…………………………………….Full Article: Source

Posted on 02 March 2011 by VRS |  Email |Print

From Myiris.com: The Government said there is no proposal to ban forward trading in essential commodities. In a written reply in the Lok Sabha today, the Minister of state for Consumer Affairs, Food and Public Distribution K V Thomas said a report submitted by a committee constituted by the government had said that forward trading was not the reason for inflation in the prices of commodities in the country.

Thomas said report found that inflation was primarily due to structural constraint in augmenting supplies coupled with rising demand in a fast growing economy…………………………………….Full Article: Source

Posted on 02 March 2011 by VRS |  Email |Print

From Risk.net: Academics and industry participants in Malaysia are advocating further developments of treasury and money market products, notably via a new exchange initiative. But commodity murabaha structures developed to facilitate liquidity management by banks based on palm oil have attracted criticism from some quarters.

The world’s Muslim population is projected by the International Journal of Environmental Science and Development to account for a quarter of the world’s estimated 7.8 billion people by 2020…………………………………….Full Article: Source

Posted on 02 March 2011 by VRS |  Email |Print

From Truth-out.org: In contrast to the rapidity with which governments moved to use taxpayer funds to rescue the “too big to fail banks” in 2008, the pace of financial and commodity market reform since then has been agonizingly slow.
One factor frustrating re-regulation is financial industry resistance to reform, aided in the United States by Republican Party efforts to reimburse the financiers of their November 2010 electoral victory with initiatives to defund the regulatory agencies responsible for implementing the “Dodd-Frank Wall Street Reform and Consumer Protection Act.”……………………………………Full Article: Source

Posted on 02 March 2011 by VRS |  Email |Print

From Strategyeye.com: South Korea plans to introduce an emissions trading scheme from the beginning of 2015, according to Reuters. The country’s government had planned to bring the scheme into effect in 2013, but has revised its plans following strong opposition from industry groups.
The groups argue the carbon trading scheme will put them at a competitive disadvantage to exporters in countries such as the US, Australia and Japan which, have scrapped or postponed cap-and-trade plans. The revised bill is yet to be approved by parliament, but will reportedly increase the percentage of free carbon allowances for companies from 90% to 95%…………………………………….Full Article: Source

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