Commodity Blog

Posts Tagged ‘South Africa’

Sugar prices declined, but some analysts expect the rebound. Bullish forecasts say that global sugar inventories will decline to 32 percent of total consumption, 52.8 million metric tons, in the year to September 30th. While sugar prices decline after reaching the record level, the inventories still need to be resupplied and current low prices may help in this, which, in turn, may drive prices up. With civil unrest in Thailand and South Africa’s exports being lower than expected demand may exceed supply.

Bears point out on signs of increasing supply. Thailand’s government claims that it has restored order. India may turn from the largest consumer in the world to a net exporter, while Brazil’s output continues to grow. This expected to cause global sugar supplies to turn to surplus in the year from October.

July delivery for raw sugar fell 4.9 percent to $0.1419 per pound last week on ICE Futures U.S. in New York. Thus, prices resumed their bearish trend, which was reversed this month.

Platinum is mainly used in manufacture of the autocatalysts. It is also used in petroleum, electrical, chemical and glass industries as well as investment asset. In 2009 demand for the metal fell as car demand declined because of global economy recession. What future can be expected for platinum in 2010?

As global economy rebounds so demand for platinum from industries, particularly car industry, grows. Jewelry industry showed astounding 80% growth of demand for the metal. Demand in China is steadily growing, expected to add 900,000 oz.

Will supply catch up demand in the next year? Opinions differ at this matter. Supply from South Africa fell 10.6% in 2009. Production in Russia declined 11% in the previous year. But in 2010 output from these countries can rise in response for growing prices. In other regions production slightly grew. Some analysts predict deficit as demand climbs, while other analysts forecast oversupply.

But even in case of oversupply platinum price may in fact grow due to investor involvement. Platinum ETFs increased 89% in 2009. Analysts say that the commodity will be traded in range $1,100-$1,900 in the next year, $1,350 being the most likely price.

Sugar went above the 3-year high level on ICE Futures in New York today. The shortfall of this commodity in India (which is the world leading consumer of sugar) and the elevated global level of deficit spur speculations among the traders that the sugar will continue rising in the world. Analysts believe that the global hedge funds will increase their positions in sugar on deficit expectations. October delivery sugar futures rose to $0.1847/pound on ICE as of 11:11 today — that’s 0.2 percent compared to the Friday’s close level.

The platinum is expected to grow back to $1,500 level per ounce during next two years, according to some commodity analysts. The gain in demand conjoined with the decline of the supply from the South African mines can lead to a slow recovery of this industrial and precious metal. Platinum immediate delivery contracts rose to $1,199.75 per ounce (or 1 percent) during today’s trading session at SICOM as of 11:30.