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G. Chandrashekhar

Robusta up 59 pc following output disappointments in Vietnam

Mumbai, Sept. 10

In the international market, investors in metals (base and precious ) and coffee have had a good quarter so far.

With three weeks left for the quarter to end, the list of winners and losers among commodities in terms of price performance across the quarter is becoming clearer. Interestingly, in Q3 so far, it is metals and some soft commodities that have done best, while energy has fallen back. The strongest price rise among the main markets has been in robusta coffee, which has risen 59 per cent following output disappointments in Vietnam, the largest producer. By contrast, higher quality Arabica beans, mainly from Brazil, are in better supply and have risen by just 5 per cent this quarter.

Base metals up

All base metals have risen this quarter, except aluminium which has by far the weakest fundamental balances. The strongest rises in base metals (among three month prices) are for lead (36 per cent) and nickel (35 per cent). While zinc has gained only 11 per cent this quarter, it remains the commodity with the greatest year-on-year rise (152 per cent).

Precious metals shine

Precious metals have also performed well this quarter with silver up by 22 per cent and palladium by 9 per cent. Gold has risen by 2 per cent. However, the energy sector has performed badly with every major energy related contract falling in all trading centres. Coal is off by 8 per cent, Brent and WTI crude have fallen by 10 per cent, US natural gas by 11 per cent, and the extreme gasoline futures have come off by 20 per cent in New York. Interestingly, those agricultural commodities linked to oil prices have performed worst of all. Ethanol is down by 21 per cent and sugar by 28 per cent. Rubber, the worst performing commodity, dropped by 32 per cent.

"There is still time for the pieces of this picture to move around a bit, but the strong out-performance of metals over energy looks set to be the defining feature of the quarter," observed a perceptive analyst.

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