December 5, 2013 Leave a Comment

New forward-looking index sees food price deflation till 2015

Macquarie Commodities Research has created a new global agricultural commodity index designed to indicate the future level of food inflation.

The forward looking index, which will be published every Monday could provide a useful guide to food manufacturers and retailers – provided it is more accurate than current forecasts and futures prices.

The index tracks the prices of futures contracts for 28 different agricultural commodities. The index currently indicates a 10% decline in 2014 following an 11% fall this year. Further food price deflation is forecast in 2015.

Related article: Getting closer to a real time commodity market equilibrium

Few details are available as to how the index works. How for example does it capture the risk of another drought in the US and what assumptions are made about the level of substitution between commodities?

Filed Under: Food, manufacturers
December 4, 2013 Leave a Comment

Chart: Libyan oil output falls to post war low

Libyan oil output fell to a post-war low of 210,000 b/d in November, according to the latest Bloomberg estimates as armed protesters disrupt efforts by the oil industry to resume production.

Meanwhile after the Libyan army threatened to use force against armed protesters, the country’s Oil Minister told reporters at an OPEC meeting that he was “optimistic” that pressure on protesters to allow the resumption of production would see Libyan oil output restored to 1.5 million barrels per day (bpd). Then suggesting that all its oil ports would reopen by 10th December the minister estimated that full oil production would resume about a week later.

According to VTB Capital oil strategist Andrey Kryuchenkov “I can’t see Libya reopening all the ports quickly, and then it would take much longer to get back up to 1.5 million bpd full output.”

Related article: Three fundamental factors affecting oil prices

2013-12-04_2110

Filed Under: Charts, Oil
November 29, 2013 Leave a Comment

Chinese manufacturing activity likely to have eased in November

China’s official measure of manufacturing activity, due to be published on Sunday (! Dec) is expected to show that activity eased in November. The HSBC Flash PMI missed expectations (50.4 vs 50.8 exp) and saw its largest month on month drop since May. According to Xiangcai Securities “Activity in the manufacturing sector could weaken in November and December as the current re-stocking cycle draws to an end.” In the short term this may lead to lower base metal prices.

Chart: Chinese manufacturing activity

China PMI
Source: ZeroHedge

Related article: Seasonal price trends in steel and base metals

Filed Under: China, commodities, manufacturers, metal
Next Page»