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 Agri-Biz & Commodities - Outlook


Outlook positive for commodity sector

G. Chandrashekhar

Barclays Capital: Copper, zinc to continue rising

There is scope for a further shift up in oil prices beyond $ 70 per barrel.

Mumbai , June 4

Following is a summary of the latest commodity market outlook report of Barclays Capital - Commodities Research.

  • Positive on outlook for the commodity sector as a whole; but with some strong divergences between sub-sectors and individual commodities.

  • Outlook for base metals appears positive, with copper and zinc, in particular, continuing their long cycle upwards.

  • Macro-economic environment for precious metals and, in particular, gold is turning more favourable. Gold market fundamentals viewed as weak; but an increasingly bearish picture for the US dollar and a move up in financial market inflation expectations means gold will continue to attract investor buying.

    This should keep gold price momentum to the upside, though the market remains highly vulnerable to any change in sentiment.

  • Within agriculture, exposure to sugar is preferred, as also corn (maize), given that ethanol concerns are now starting to be priced in.

    Overall, however, prefer to remain underweight in agricultural and livestock commodities.

  • Within energy, there is scope for a further shift up in oil prices beyond $ 70 per barrel, fed by supply-side weakness, robust demand and the associated benign balances, together with geo-political issues and continuing stresses caused by low levels of spare capacity along the supply chain.

    More Stories on : Outlook | Commodities

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    Outlook positive for commodity sector

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