Asian commodity traders grit teeth<\/p>\n
SYDNEY (Reuters): Asian commodity dealers are preparing for a
\nslowing in trade as a new round of economic turmoil squeezes
\nJapan demand, sidelines Indonesian players and makes it even
\nharder to assess future market trends.<\/p>\n
Only Australian exporters are cheering as the Australian
\ndollar is stalled below 50 U.S. cents, boosting local currency
\nearnings from exports. But even they see darkening clouds.<\/p>\n
Volatile currencies, tumbling share values and a bout of
\nconcern over systemic risk in Japan -- plus the threat of a major
\nU.S. economic slide -- have cast a blanket of gloom over Asia's
\ncommodities trade.<\/p>\n
Leading commodities importer Japan, top exporter Australia,
\nand emerging market countries Indonesia and Thailand, are all
\naffected.<\/p>\n
In industrial Japan, any export gains offered by 20-month lows
\nfor the yen against the U.S. dollar are overpowered by flagging
\nAmerican demand.<\/p>\n
\"As 20-30 percent of Asian exports are directed to the U.S.,
\nthe slowdown in the U.S. economy has a major negative impact on
\nindustrial production in Asia, depressing demand for
\ncommodities,\" said Akio Shibata, associate senior officer,
\nindustrial research section, at trade house Marubeni Corp.<\/p>\n
Demand for oil, base metals and rubber in Japan and elsewhere
\nin Asia are all being hurt by the U.S. slowdown, he said.<\/p>\n
In developing Indonesia, gyrations of the local currency the
\nrupiah have driven soymeal, wheat and sugar buyers from the
\nmarket.<\/p>\n
\"Some deals under negotiation have not materialized because
\nthe rupiah is really scary. Traders and feedmillers are staying
\naway from the market...They won't make any purchases right now,\"
\na grain trader at an international house said.<\/p>\n
For big sugar, rubber and rice exporter Thailand, a weakening
\nbut volatile currency - the baht - added to the difficulties of
\nselling into markets suffering from scant demand and low prices.<\/p>\n
\"Nobody can speculate about what prices we would sell for
\nshipments a few months ahead - it is just a gamble,\" one rice
\ntrader said.<\/p>\n
A weakening baht was likely to drive rubber exporters to boost
\nsales, Choosit Opaswongse, president of the Thai Rubber
\nExporters' Association said.<\/p>\n
But even those who see benefits from falling currencies fear
\nthe good times may not last.<\/p>\n
\"Rather than a risk, it (the Australian dollar collapse) is
\nprobably a benefit,\" said Lloyd George, public affairs manager in
\nAustralia for U.S. grains giant Cargill Inc.<\/p>\n
\"(But) at some stage or another that logic starts to fail, I'm
\nnot sure whether its at 45 cents or 35 cents, but a drop in
\ncurrency at this rate isn't good.\" George was speaking as the
\nAustralian dollar remained below 50 U.S. cents after sinking to a
\nnew low of 49.23 U.S. cents.<\/p>\n
Commodity traders in Asia and Australia see medium-term risks
\nfor all commodity prices from the current turmoil.<\/p>\n
Currency gyrations and share market slides could be managed by
\nthe trade, but the factor causing most worry was falling U.S.
\ndemand and its effect on Japanese, Korean and Taiwan output and
\ncommodities buying, an Australian metals trader with a major
\nJapanese house said.<\/p>\n
There is no sign of a flight to commodities as a safe haven in
\neither Asia or Australia, nor do deal-makers see trade grinding
\nto a halt because of financing pressure from banks.<\/p>\n
But deals were taking longer to put together with some major
\nAsian markets very cautious, the trader said.<\/p>\n
Metals were insulated from currency volatility by the normal
\npractice of trading in U.S. dollars. But this would not save them
\nfrom falling demand in Japan, Korea and Taiwan, nor from
\nuncertainty in the U.S., the trader said.<\/p>\n
\"Producers from Australia are still quite bullish. But with
\nthe Australian dollar so low, nerves are on edge with some mining
\nhouses here a very cheap buy.\"<\/p>\n
Cargill's George takes the pragmatic view that life goes on
\nand demand is the key. \"It's still going to be the normal
\nsupply\/demand issues that will drive commodity prices. And
\nthey're the same issues we've been dealing with over the last 12-
\n18 months,\" he said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/asian-commodity-traders-grit-teeth-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}