by Editor | Aug 2, 2022 | Business, Commodities News
Energy, metals and agriculture prices have all tumbled from their March peak on inflationary recession fears amid a slew of economic warning signs, but a commodity bust is far from inevitable, S&P Global Commodity Insights said in a report.
New Delhi, Aug 2, 2022: Energy, metals and agriculture prices have all tumbled from their March peak on inflationary recession fears amid a slew of economic warning signs, but a commodity bust is far from inevitable, S&P Global Commodity Insights said in a report.
The commodity market boom is over, the report said. Since early 2020, more and more analysts have been championing the idea of a new commodity supercycle, with an economic recovery turbo-charged by low interest and pandemic-led fiscal stimulus measures, and as investment into decarbonization projects accelerated to meet net-zero targets.
Global manufacturing is creaking, with the July PMI data, a leading barometer of economic health, at its lowest in two years. The US Federal Reserve has raised interest rates by 75 basis points for the second month in a row in a bid to thwart runaway inflation at over 9 per cent in June. And it’s a similar pattern of inflation risks and monetary tightening seen across Europe.
S&P Global Platts Analytics sees global GDP growth below 3 per cent in 2022 and “the balance of risks is clearly on the downside with recession probabilities rising” amid “very concerning” inflation trends, after 2021’s booming GDP growth of 6 per cent, Paul Hickin, Associate editorial director, S&P Global Commodity Insights said.
Oil and agriculture prices have also come off March highs, with the key Dated Brent crude benchmark and the Russian wheat price falling by close to 20 per cent. Energy and agriculture have not fallen at the same rate as metals given tighter supply balances, with Russia a crucial energy and crops supplier, amid uncertainties that these crucial commodities will continue to be exported at the same rate.
The key debate is how high prices are leading to demand destruction amid fears of an inflationary recession and how much commodities are trading off their own fundamentals and still tight supply and demand balances. If oil and wheat stay high despite the economic weakness, even more damage could be inflicted on the global economy and, ultimately, commodity demand, pointing to the urgency of OPEC+ to bring on extra barrels and the US to keep strategic petroleum reserves flowing, the report said.
Dated Brent remains in triple digits after peaking at close to $140/b in March and well above the $80/b at the start of 2022, while Russian wheat 12.5 per cent FOB Black Sea is also still comfortably above levels seen at the start of the year.
by Editor | Jun 18, 2022 | Business, Commodities News
As large parts of India remained monsoon deficit, Kharif 2022 witnessed lesser area under rice, pulses, and oilseeds while only sugarcane area is up compared to 2021 with a decline of 8.66 lakh Hectare in total area sown, government data said on Saturday.
New Delhi, 18th June 2022: As large parts of India remained monsoon deficit, Kharif 2022 witnessed lesser area under rice, pulses, and oilseeds while only sugarcane area is up compared to 2021 with a decline of 8.66 lakh Hectare in total area sown, government data said on Saturday.
A total of 99.63 lakh Ha area has been sown during the Kharif 2022 season compared to 108.29 lakh Ha in 2021, i.e. minus 8 per cent as on Saturday, June 18.
Rice is sown over 8.73 lakh Ha, compared to 12.52 lakh Ha in 2021, which is 3.80 lakh Ha less (minus 30.32 per cent). Pulses have been sown over 4.39 lakh Ha, compared to 4.74 lakh Ha in 2021, which is 0.35 lakh Ha less (minus 7.43 per cent), among them, Urad has witnessed the least sowing with 0.53 lakh Ha this year compared to 0.73 lakh Ha last year (minus 27.95 per cent).
Total coarse cereals has also witnessed decline with 6.81 lakh Ha compared to 9.74 lakh Ha in 2021, a decline of 2.98 lakh Ha (minus 30.07 per cent). Of them, Bajra has seen the least sowing with 0.45 lakh Ha compared to 2.85 lakh Ha in 2021 (minus 84.10 per cent).
Even the Oilseeds saw sowing over 4.75 lakh Ha compared to 5.79 lakh Ha (minus 17.86 per cent).
The government data showed only sugarcane has seen an increase with 6.51 lakh Ha compared to 6.76 lakh Ha last year, up by 1.86 per cent.
India Meteorological Department (IMD) data showed that as on June 16, the all India cumulative rainfall during this year’s monsoon (between June 1-15) is minus 32 per cent, of which the largest gap was over northwest India, which was minus 77 per cent below the long period average for the region.
Meanwhile, major 143 reservoirs across the country have the Full Reservoir Level (FRL) capacity of 177.46 billion cubic metres (BCM), which is about 68.83 per cent of total reservoir capacity of 257.81 BCM in the country. Data as on June 10 showed that the live storage in these 143 major reservoirs had decreased to 52.82 BCM from the previous week’s level of 54.51 BCM.
“However, current year’s storage position is higher than last year’s storage position of 49.14 BCM and the average of last 10 year’s storage position of 39.58 BCM,” said an official, adding, “There were 112 reservoirs with more than 80 per cent of normal storage, 15 reservoirs with storage between 51 per cent to 80 per cent, 4 reservoirs with storage between 31 per cent to 50 per cent and 12 reservoirs with storage up to 30 per cent.”
There are four reservoirs with no live storage, the official said, but that will not make much difference as the monsoon rains have started.
by admin | May 25, 2021 | Commodities, Commodities News, Commodity Market, Investing, Mutual Fund
New Delhi : The Securities and Exchange Board of India (SEBI) on Friday allowed mutual funds (MFs) and portfolio managers to invest in commodity derivatives to strengthen the market offerings and attract more players.
“The Board deliberated and approved the proposal contained in the memorandum to enable the participation by mutual funds and portfolio managers in exchange traded commodity derivatives in India subject to certain safeguards,” SEBI said after its board meeting here.
“Further, Category III alternative investment funds, which are already permitted to participate in commodity derivatives, have now been permitted to deal with goods received in delivery against physical settlement of such contracts, if any,” the regulator added.
Currently, the commodity markets are dominated by retail level traders and a few corporate hedgers and speculators. The entry of mutual funds and portfolio managers will attract more hedgers to the market and lead to its overall development.
Market players said the SEBI move could offer structured and attractive products to deepen the commodity derivatives market. It would also lead to more participation from the funds.
Institutional participants like mutual funds and portfolio managers will add long-term liquidity to the markets, said the member of a commodity exchange.
The participants in the commodity derivatives market comprise retail and wholesale commodity traders and a few corporate clients and punters across asset classes.
The SEBI also allowed Category III alternative investment funds to trade. Foreign companies with exposure to Indian commodities not having presence in India were also allowed to trade recently.
—IANS
by admin | May 25, 2021 | Business, Commodities, Commodities News, Economy, Markets, Medium Enterprise, News
Canberra : Australia and Brazil have decided to escalate a trade dispute with India over sugar subsidies before the World Trade Organisation (WTO), Canberra said.
Trade Minister Simon Birmingham announced this late Wednesday after it was decided that subsidies paid to Indian sugar farmers was leading to an abundant global supply of sugar and significantly lower prices, disadvantaging other country’s farmers.
The global sugar price has hit a 10-year low, crippling sugar farmers in Australia who have also had to combat drought and floods, he said.
“That’s hurting canegrowers and sugar millers whether they’re in Australia, Brazil, or any other country in the world,” Birmingham told reporters.
Birmingham said that Australia has voiced its concerns to India to no avail, leaving the government with “no other choice but to initiate formal WTO dispute action, together with Brazil”, Xinhua news agency said.
“Last year, we saw around 1 billion Australian dollars (AUD) of additional new subsidies to Indian sugar farmers,” he said.
According to the Australian Sugar Mining Council, the subsidies could amount to 360 million AUD in losses for Australian farmers over the 2017-2018 and 2018-2019 financial years.
—IANS
by admin | May 25, 2021 | Commodities, Commodities News, Economy, Markets, News
Mumbai : A day after market regulator SEBI declared the commodity broking arms of Motilal Oswal and India Infoline (IIFL) as not “fit and proper” in the NSEL case, the scrip price of both the companies fell up to 5 per cent and 9 per cent respectively on Monday.
Stock price of Motilal Oswal on BSE declined up to 5.11 per cent but pared some of its early losses trading 2.85 per cent down at Rs 594.85 per share, while IIFL Holding Ltd. tanked up to 9 per cent.
The Securities and Exchange Board of India (SEBI) is probing as many as 300 brokers for violation of rules colluding with the National Spot Exchange Ltd (NSEL) to defraud investors. In fact, the regulator has named brokerage firms in a first information report (FIR).
What this meant was that NSEL did not maintain sufficient underlying stock on trades it allowed even as brokers sold lucrative contracts to investors.
This builds defaults and resulted in the exchange denying payments worth Rs 5,600 crore in 2013.
“In view of the seriousness of the matter, facts and circumstances of the case, the conduct of the noticee in its functioning as a commodity broker is questionable and has certainly eroded its general reputation, record of fairness, honesty and integrity and has therefore affected its status as a ‘fit and proper person’ to be an intermediary in the securities market,” the designated authorities said in the report submitted to SEBI.
In an order uploaded on its website on February 22, SEBI said that the brokers had a close association with NSEL and allowed themselves to “become a channel”.
“Thus the noticee is not a fit and proper person to be granted registration/to operate as a commodity derivatives broker,” the order said.
SEBI has also ordered both Motilal Oswal and IIFL to transfer securities of all their clients and allow withdrawal within 45 days of the order.
Failing this, “the noticee shall transfer its balance clients with their corresponding securities and funds to another person, holding a valid certificate of registration to carry on such activity, within a further period of 30 days”, the order said.
—IANS
by admin | May 25, 2021 | Commodities, Commodities News
New Delhi : India’s annual rate of inflation based on wholesale prices eased to 2.76 per cent in January 2019 from 3.02 per cent reported for the corresponding month of 2018.
—IANS
