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Global Commodity Watch - March 2012
Non-energy commodities rose by 2.9 percent in February—a second straight monthly increase—on various supply shortfalls and, in part, due to depreciation of the U.S. dollar (down 1.7 percent against a broad group of major trading partners). Agriculture and metals prices increased as weather-related supply losses affected tin output in Indonesia and soybean crops in Latin America, but there were also supply constraints elsewhere. Crude oil prices surged higher on supply losses and geopolitical tensions over Iran’s nuclear program.
 jumped 5.2 percent in February</strong> to $112.7/bbl on rising supply concerns, notably from Iran, but also in South Sudan, Syria, Yemen, the North Sea and elsewhere. Brent prices have surged above $126/bbl in early March due to low stocks and tight market conditions in Europe. The EU embargo on Iran’s exports and U.S. sanctions penalizing companies doing business with Iranian banks do not come into full force until July, but European and Asian buyers are already curtailing Iranian imports. EU buyers need to replace 0.6 mb/d of Iranian imports. In addition, geopolitical problems have left nearly 0.9 mb/d off the market from Yemen, South Sudan and Syria, and technical difficulties are limiting production in the North Sea. OPEC has said that it will make up for losses from Iran, but this raises the concern of reducing spare capacity. Meanwhile the spread between Brent and WTI stands at $20/bbl in early March, as stocks at Cushing OK are again rising rapidly.</p><p>[{42h5dgpq.x5z}]<br><br><strong>A</strong><strong>gricultural prices rose by 2.3 percent in February</strong> —a second monthly gain—on various supply shortfalls. Rubber prices posted the strongest increase, up 10 percent, due to strong import demand by China for tire manufacture and stock rebuilding. Robusta coffee prices rose 5 percent as Vietnamese growers held back beans on expectation of higher prices. The soybean complex was up 3-5 percent due to further deterioration in prospects for South American soybean output, while palm oil prices rose 4 percent on weaker production in East Asia. Partly offsetting these increases were a 6 percent decline in arabica coffee prices due a larger than expected Brazilian crop, while tea prices fell 3 percent due to a sharp drop in Indian prices because of the seasonal decline in tea quality. Logs (Malaysian) prices decreased 3 percent on weak demand in Asia. </p><p>[{pp4fpz1v.1wg}]<br> <br><strong>Metals and minerals prices rose 3.6 percent in February</strong>—a second straight monthly increase—on supply disruptions and falling stocks (and in the case of aluminum and zinc, limited access to exchange inventories). Tin prices surged 13 percent due to falling stocks and a sharp drop in Indonesia’s tin exports because of wet weather that affected both offshore and on-land production. Zinc and aluminum prices rose 3-4 percent—despite rising stocks—as a significant portion of inventories are tied up in warehouse financing arrangements. Silver and gold prices rose 11 and 5 percent, respectively, on strong investment demand but dropped in early March in part because of the expected slowdown in China’s economic growth.</p><p>[{jvswnnhi.5gp/chart-small.png)
Get detailed analysis and commodities prices datasets: For price data and detailed analysis on commodities price movements in January, click here (pdf).
For price data and forecasts click here.