Coffee markets come under pressure, soya prices surge
Coffee markets come under pressure, soya prices surge
LONDON (AFP): The coffee markets in London and New York came
back to a boil this week as the main feature on the commodities
markets, following the summer break, heated up by the prospect of
a low harvest in Indonesia - in third place among coffee
exporters.
Coffee plantations in Southeast Asia have been hit hard by
drought. Experts said that if Indonesia does not get any rain by
the end of the month, the big robusta producer will record a
disastrous harvest.
The abundance of the 1997 arabica harvest in Brazil, the
sector heavyweight, would find it hard to make up for a poor
harvest in Indonesia, as robusta has the advantage of being less
expensive for instant coffee manufacturers.
But Vietnam might help make up for the weakness of Indonesian
exports thanks to an exceptional harvest.
Elsewhere on the commodities markets, soya prices surged on the
Chicago more
GOLD: Under pressure. The announcement this week of the sale
of 31 tons of gold by Russia in August was perceived as "slightly
negative" for the market, according to experts at British
brokerage GNI.
That sale "adds to the concern about central bank sales from
elsewhere", GNI said. Several central banks have recently gotten
rid of part of their gold stocks, shifting to foreign currency
reserves or other investments that are easier to use.
SILVER: Firm. The metal continued to enjoy operator confidence
and the price remained firmly at around US$4.70 an ounce. One
operator said the price had been sustained by bank buying.
Mexico, the world's leading silver producer, will turn out
more than 100 million ounces next year, up 3 percent on this
year, according to a Silver Institute report. It said the rise in
Mexican output is explained by an increase in world demand,
especially for the photo industry and jewelry.
COPPER; Weak. Copper prices remained enfeebled by the constant
increase in stocks on the London Metal Exchange (LME) and
relatively abundant supply.
The reference price (for three-month delivery) was stable by
comparison with last week at US$2,160 a ton.
Chinese imports of copper, high in 1996, shows signs of a
slowdown this year, and various sources say China is expected to
buy 100,000 to 150,000 tons this year against 250,000 last year.
LEAD: Firm. Lead prices were firm, rising by $10 to $650 a
ton. But the increase in lead reserves on the LME made price
prospects uncertain.
ALUMINUM: quiet. Prices slipped a week after LME intervention
to prevent excessive price changes. The reference price (three-
month deliver) fell by $10 to $1.620 a ton.
But according to GNI, the possibility of a price rise cannot be
ruled out.
Last week, the market managers intervened to calm trading down
following a surge of spot prices, by limiting the possibility of
cost fluctuations to borrow the metal overnight in connection
with technical operations.
NICKEL: hard. The price of nickel, used in special steels,
rose by $40 this week to 6,700 a ton as Russian producer Norilsk
continues to run into technical problems, which will probably
force a cut in its exports.
TIN: quiet. There was no news to give this metal a direction,
as the price rose by $40 to 5,460 per ton.
OIL: Calm. Crude oil prices were little changed on the week,
staying at around $18.3 a barrel for North Seat Brent.
The announcement of a decline in U.S. reserves of gasoline
(petrol) and crude oil had a tendency to firm prices. But experts
at Goldman Sachs say prices might decline in the coming weeks due
to a drop in gasoline consumption resulting from seasonal
factors.
RUBBER: Firm. The British rubber index remained firm, up five
pounds to 595 pounds per ton, while the market continued to watch
the monetary turbulence in Southeast Asia, the world's biggest
rubber producing area.
A Lewis and Peat operator said Malaysian producers are now
reluctant to sell their rubber, priced in ringgit, because of the
losses resulting from devaluation of the national currency.
At the same time, western tire makers are tempted to buy latex on
local markets in Southeast Asia, since it has become very cheap
for them.
COCOA: Quiet. Prices fluctuated little over the week, ending
slightly higher, even though the market continues to worry about
the effects of El Nino on producing regions, in west Africa and
Indonesia.
But experts say it is still too early to determine whether El
Nino will have a negative influence on the harvest in west
Africa, which represents two-thirds of world output.
If rain stays absent in the coming weeks, the harvest in
Indonesia, the world's leading robusta producer, could be very
low, experts say. Earlier in the year, the plantations were
damaged by water and wind.
At the same time, brokers are worried about El Nino's possible
effects on Central American harvests.
The prospect of a halt to coffee exports from the Brazilian
port of Santos, the country's main export point, also contributed
to upward price pressure. The port staff might strike on
September 9, according to GNI.
TEA: drop. Demand declined on the London auction market,
pushing prices lower. Medium-grade team traded at around 145
pence per kilo, against 152.5 the previous week.
SUGAR: Passive. The announcement of a marked dip in exports
from Thailand, a leading world seller of cane sugar, did not
surprise the market.
The country is expected this year to sell only 4.16 million
tons against the initial forecast of almost 4.5 million, GNI
says. But the market did not move on the news, nor even on the
announcement of floods damaging the cane crop in Pakistan.
The price in London stood at $325 a ton, the same as last week.