Consumption off oil, gas,metals, grain and rubber rise in India and China. The surge in oil, gas, metals, gold, grain, sugar, rubber prices amidst supply concerns, now the global concerns have shifted to rubber with supply-demand mismatch leading to surge in futures prices.
Consumption in India, China, Brazil, Japan, US, EU and emerging markets are zooming in recent times due to heavy industrial demand. The farmers in Ivory Coast are abandoning cocoa and turning to rubber production as low yields, caused by diseases and ageing trees, trump benefits from 10-year highs in up-country farmgate prices. Despite these highs, few farmers say they have improved their lot and some agronomists estimate that thousands in the top grower may join the exodus from cocoa to rubber.
Chinese manufacturers produced 654.64 million tyres between January to December in 2009, up 18 per cent compared with 2008. According to data released by the China National Bureau of Statistics (CNBS), 57.19 million tyres were produced in China in December 2009, up 52 per cent compared with the year before.
Chinese Customs statistics show that China imported 170,000 tons of natural rubber up 190.3 % in January 2010. Imports of synthetic rubber rose 182.3 per cent to 1,271,290 tons. Indian government’s chief economic adviser, Kaushik Basu said economic growth was expected to rise to 8.5 per cent.
To achieve 7.2 per cent growth for 2009-10, as estimated by the Central Statistical Organisation, the economy must grow over 8 per cent during the fourth quarter.
Government data showed the food price index rose an annual 16.22 per cent in the week-ended March 13, lower than the previous week's annual reading of 16.30 per cent.The fuel price index rose 12.68 per cent in the year to March 13, flat on the week. The Government had raised motor fuel prices in late February.
India's crude oil imports jumped up 13.2 per cent in February even though domestic fuel demand dropped marginally, according to data released by the Oil Ministry. Domestic fuel sales at 11.39 million tonnes in February were 0.2 per cent lower than 11.41 million tonnes of petroleum products consumption in the same month a year ago.
The worst drought in a century has been ravaging China's southwest provinces of Yunnan and Guizhou and the region of Guangxi, leaving 20.5 million residents and 12.6 million heads of livestock with insufficient drinking water.
The drought centres on China's major sugar and rubber areas and could have a big impact on output, forcing the country -- already a major rubber importer -- to source more from overseas. A reduction of sugar output will expand domestic shortages and require more imports later in the year
Another factor which is weighing on the metal prices is the concern of Chinese government raising interest rates.
It is expected that China may very soon increase interest rates to control inflation which may slow down growth in the world’s fastest growing economy. There is a belief that the ministers in the Euro-zone are agreeing to help Greece partly through IMF. This may help the base metal prices as investor sentiment may get a boost. Investors will continue using oil, gold, metals as a hedge to protect against risk, sovereign debt issues and inflation. in the long term oil, gas, gold, metal prices will rise due to trillions of dollars of stimulus money injected into the world economy.
The weaker dollar has been a key factor behind the recovery in oil, gold and metal prices. Metal inventories have meanwhile continued to come under pressure. Declining inventory, in a month which traditionally sees stocks build, has been one of the factors helping to underpin the oil, gold and metal’s recent price strength.
Strong growth in China, India, and some other countries will rise demand and prices. Albanian Minerals in New York and her sister company Bytyci ShPK in Tropoje Albania forecast that global growth will move from a decline in 2009 to a astonishing gain in the future. Demand for oil, gold, food, raw materials to pick up in 2010.
(online.wsj.com)
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