58630 Commodity Markets Review October 12, 2010 DECPG, The World Bank Non-energy commodity prices in September Agriculture prices rose 3.9 percent in rose for the third straight month, up 3.9 September, up for a fourth straight month, and percent, due to supply constraints and a continued to be led by higher grains prices--up weakening U.S. dollar--down 1.5 percent 11 percent. Sorghum and maize prices soared 29 versus the euro. For the first nine months of and 17 percent, respectively, partly as a lagged the year, non-energy prices are up 17.9 percent, response to tighter conditions in wheat markets. with large gains in iron ore and fertilizers. (Grains prices continued to rise in early October Crude oil prices increased marginally in on lower USDA yield estimates.) Sugar prices September, up 0.4 percent, averaging jumped 22 percent due to unfavorable weather $76.1/bbl which is slightly below the average of conditions in a number of producing countries, the past year. Prices have been supported by e.g., Russia and Pakistan, and concerns about strong demand and OPEC production restraint, dry weather in Brazil. Cotton prices rose 16 but large stocks and non-OPEC supply gains percent on low stocks, weather-related damage have prevented prices from moving higher on a to this season's crop in Pakistan, and harvest sustained basis this year. In early October, delays in India and China. however, oil prices rose above $83/bbl in part Base metals prices surged 5.3 percent in due to depreciation of the dollar (the price in September, up for the third straight month, on euros is little changed). Prices have been pulled lower inventories and supply constraints, higher by strong diesel transport demand in the notably for tin and copper. The largest price U.S., German consumer restocking of heating oil increase was for the precious-metal silver, up 11 ahead of winter, and a crippling strike at percent, due to strong investment demand and France's Mediterranean oil port. OPEC meets macroeconomic-financial-currency concerns that October 14th, and the group is not expected to have prompted investors to seek physical alter crude oil output levels. commodity assets, such as precious metals that Natural gas prices in the U.S. dropped 9.3 are relatively easily stored. Tin prices rose 9 percent in September to $3.9/mmbtu. This percent on a further decline in inventories, level is less than half Europe's import price and strong demand, and a production fall in one-third Japan's delivered LNG price--where Indonesia due to heavy rains. Copper prices rose gas imports are indexed to oil prices. U.S. prices 6 percent on a steady decline in stocks, stagnant have been weighed down by steady growth in mine production, and concerns about future un-conventional shale gas production. supply growth needed to meet rising demand. Major Price Indices Agriculture Prices - Sub-Indices Indices of Nominal US$ Prices (2000=100) Indices of Nominal US$ Prices (2000=100) 400 275 Beverages 350 250 Base Metals 300 225 250 200 Energy Food 200 175 Agriculture Raw Materials 150 150 100 125 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Prepared in the Development Economics Prospects Group (DECPG) by Shane Streifel, John Baffes and Betty Dow. Katherine Rollins is task assistant. 1 Major Movers September1 Logs (Malaysia) prices increased 5.5 percent on Sorghum and maize prices soared 28.9 percent tight supply of Mercanti logs from Sarawak, and and 17.3 percent, respectively, in response to steady demand from China. tighter conditions in wheat markets and because Rice prices rose 5.4 percent reflecting higher of a lower U.S. maize production outlook. prices in other grains markets, and longer-than- Sugar prices surged 21.9 percent due to extreme normal rains that reduced yields in Indonesia. weather that affected production in a number of Coffee arabica prices rose 5.3 percent due to countries, e.g., in Russia and Pakistan, as well as falling stocks and a threat of drought in Brazil. concerns about dry conditions in Brazil. Groundnut oil prices fell 6.1 percent on Urea, TSP and DAP fertilizer prices rose 16.8, favorable harvests in India and the U.S. 11.6, and 4.5 percent, respectively, due to strong Cocoa prices declined 7.0 percent on positive demand in the U.S., Europe and emerging reports regarding the upcoming West African markets spurred by higher grains prices. crops. Cotton prices jumped 15.9 percent on strong Natural gas (U.S.) prices dropped 9.3 percent demand, low stocks, weather-related damage to on weak seasonal demand, large stocks, and this season's crop in Pakistan, and harvest delays continued gains in non-conventional production. in India and China. September Percent Changes in Price (Nominal US $) Silver prices increased 11.5 percent due to strong investment demand as numerous macro -10 0 10 20 30 40 50 and financial concerns have prompted demand Sorghum for physical and physically-backed assets. Sugar, world Maize Wheat prices rose 10.3 percent because of Urea, bulk weather-related supply losses in Eastern Europe Cotton, A Index 63.5 and Central Asia, and an export ban by Russia. TSP 88.9 Silver Coconut oil and palmkernel oil prices (close Wheat, US, HRW substitutes) increased 9.7 percent and 8.8 Coconut oil 83.2 percent, respectively, due to strong demand and Tin 52.7 Palmkernel oil 80.1 a looming supply shortfall of coconut oil in the Rubber, Singapore 62.7 Philippines. Copper Tin prices rose 9.4 percent due to a continued Nickel Coal, Australia sharp decline in inventories amid strong demand Logs, Malaysia and lower production in Indonesia from heavy Rice, Thai, 5% rain and flooding. Coffee, arabica Lead Rubber prices increased 6.5 percent due to Zinc strong demand and heavy rains in south-east Gold Asian rubber producing countries. DAP 63.7 Copper prices rose 5.8 percent on falling stocks, Soybean oil Tea, avg 3 auctions Sep '10/Aug '10 stagnant production, and concerns about future Soybean meal major increments to supply. Aluminum Sep '10/Sep '09 Nickel prices rose 5.7 percent due to on-going Soybeans Crude oil, average spot strike-related tightness, and expectations of a Palm oil rebound in stainless production in the fourth LNG quarter. Phosphate rock Beef Coal prices increased 5.7 percent as heavy rains Coffee, robusta in Indonesia (world's largest thermal coal Sawnwood Malaysia exporter) are expected to lower that country's Natural gas, Europe Potassium chloride -22.0 output by 10-20 percent. Groundnut oil Cocoa 1 Natural gas, US Percent change of average September 2010 prices compared to average August 2010 prices in nominal U.S. dollars (graph includes 12-month changes in grey). 2 COMMODITY PRICE DATA Annual averages Quarterly averages M onthly averages Jan-Dec Jan-Dec Jan-Sep Jul-Sep Oct-Dec Jan-Mar Apr-Jun Jul-Sep Jul Aug Sep Commodity Unit 2008 2009 2010 2009 2009 2010 2010 2010 2010 2010 2010 Energy Coal, Australia a/ $/mt 1 0 27.1 71.84 96.07 71.31 77.66 95.19 99.49 93.55 95.98 89.78 94.88 Crude oil, avg, spot a/ $/bbl 96.99 61.76 76.91 68.21 75.50 77.06 78.18 75.51 74.58 75.83 76.1 2 Crude oil, Brent a/ $/bbl 97.64 61.86 77.25 68.37 74.97 76.65 78.69 76.41 74.74 76.69 77.79 Crude oil, Dubai a/ $/bbl 93.78 61.75 75.96 68.07 75.46 75.86 77.98 74.04 72.65 74.1 8 75.27 Crude oil, West Texas Int. a/ $/bbl 99.56 61.65 77.54 68.21 76.08 78.67 77.85 76.08 76.35 76.60 75.29 Natural gas Index a/ 2000=100 267.9 153.5 158.8 123.3 149.4 170.3 147.5 158.7 157.3 157.8 61 1 .0 Natural gas, Europe a/ $/mmbtu 13.41 8.71 8.20 6.91 7.81 8.84 7.51 8.26 8.04 8.45 8.28 Natural gas, US a/ $/mmbtu 8.86 3.95 4.58 3.17 4.36 5.15 4.32 4.28 4.63 4.31 3.90 Natural gas LNG, Japan a/ $/mmbtu 12.53 8.94 10.90 7.91 9.33 10.32 10.95 1 1 .44 1 .32 1 1 1 .50 1 1 .50 Non Energy Commodities Agriculture Beverages Cocoa b/ c/kg 257.7 288.9 319.0 296.4 341.8 329.7 321 .0 306.2 322.2 309.1 287.4 Coffee, Arabica b/ c/kg 308.2 317.1 404.7 322.7 341.7 353.7 392.0 468.5 448.0 466.5 491.0 Coffee, robusta b/ c/kg 232.1 164.4 165.0 160.1 156.4 150.8 61 1 .0 183.2 188.0 182.3 179.2 Tea, auctions (3), average b/ c/kg 242.0 272.4 284.4 303.6 301.9 279.0 276.4 297.8 286.4 299.3 307.8 Tea, Colombo auctions b/ c/kg 278.9 313.7 324.5 356.1 338.0 335.1 31 6.2 322.1 304.5 327.0 334.9 Tea, Kolkata auctions b/ c/kg 225.5 251 .5 272.9 273.0 284.4 215.8 274.0 328.7 323.3 320.3 342.7 Tea, Mombasa auctions b/ c/kg 221.8 252.0 255.9 281 .7 283.2 286.1 238.9 242.7 231.5 250.8 245.8 Food Fats and Oils Coconut oil b/ $/mt 1,224 725 984 711 734 834 955 ,1 1 62 1 ,031 ,1 1 70 1,284 Copra $/mt 816 480 654 469 491 557 634 772 689 772 854 Groundnut oil b/ $/mt 2,1 31 ,1 1 84 1,335 ,1 1 33 ,1 1 52 1,359 1,352 1,296 1,300 1,334 1,253 Palm oil b/ $/mt 949 683 831 679 732 808 813 873 807 905 906 Palmkernel oil $/mt ,1 1 30 700 1,040 700 761 922 1,034 ,1 1 64 1,059 ,1 1 65 1,268 Soybean meal b/ $/mt 424 408 363 431 412 369 342 377 356 383 393 Soybean oil b/ $/mt 1,258 849 925 856 921 917 876 981 907 1,002 1,033 Soybeans b/ $/mt 523 437 425 454 439 417 409 451 429 457 466 Grains Barley b/ $/mt 200.5 128.3 150.8 122.0 145.5 143.6 146.9 61 1 .9 156.4 61 1 .2 168.1 Maize b/ $/mt 223.1 165.5 167.4 51 1 .3 167.8 162.7 157.7 81 1 .7 163.8 175.6 205.9 Rice, Thailand, 5% b/ $/mt 650.2 555.0 481 .7 539.0 542.3 535.3 452.4 457.2 441 .8 452.8 477.0 Rice, Thailand, 25% $/mt n.a. 458.1 431 .5 441 .4 462.8 477.0 399.1 41 8.5 395.6 41 2.0 448.0 Rice, Thailand, 35% $/mt n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. * Rice,Thai, A1.Special / Super $/mt 482.3 326.4 370.6 309.7 346.1 400.7 333.8 377.1 349.8 369.0 41 2.5 Sorghum $/mt 207.8 51 1 .1 1 .0 51 139.3 163.8 156.9 142.6 153.6 132.4 143.4 184.9 Wheat, Canada $/mt 454.6 300.5 288.7 271 .2 283.4 279.0 260.9 326.1 287.5 326.0 365.0 Wheat, US, HRW b/ $/mt 326.0 224.1 203.6 208.8 205.4 195.4 177.4 237.9 195.8 246.2 271 .7 Wheat US SRW $/mt 271 .5 186.0 1 21 .3 165.2 195.6 193.5 186.9 253.4 222.3 261 .6 276.3 Other Food Bananas EU $/mt ,1 1 88 1 45 ,1 992 ,1 8 11 1,032 ,01 1 4 1,029 933 959 865 974 Bananas US b/ $/mt 844 847 855 826 813 781 862 922 985 899 880 Fishmeal $/mt ,1 1 33 1,230 1 2 ,71 1,276 1,535 1,660 ,81 1 4 1,662 1 5 ,71 1,629 1,643 Meat, beef b/ c/kg 31 3.8 263.6 329.1 273.2 273.5 31 4.2 342.4 330.9 321 .0 336.5 335.1 Meat, chicken b/ c/kg 169.6 71 1 .7 172.1 173.9 165.1 167.2 173.0 176.0 176.1 176.0 175.9 Meat, sheep c/kg 458.5 427.6 480.8 453.3 450.1 447.6 486.8 508.0 462.3 528.3 533.4 Oranges b/ $/mt ,1 1 07 909 1,083 861 ,1 1 07 1,009 1,084 ,1 1 58 1,302 ,1 1 39 1,031 Shrimp, Mexico b/ c/kg 1,069 945 874 970 864 827 945 n.a. n.a. n.a. n.a. Sugar EU domestic b/ c/kg 69.69 52.44 44.11 55.43 49.11 46.38 42.66 43.29 42.77 43.21 43.90 Sugar US domestic b/ c/kg 46.86 54.88 77.38 57.31 70.48 84.31 69.62 78.20 73.28 77.1 7 84.1 5 Sugar, world b/ c/kg 28.21 40.00 43.23 46.98 50.29 51 .82 34.93 42.94 38.49 40.71 49.63 Raw M aterials Timber Logs, Cameroon $/cum 526.9 421.5 421.9 414.9 449.5 431.4 408.0 426.3 421.4 425.6 432.0 Logs, Malaysia b/ $/cum 292.3 287.2 266.9 279.6 271.1 253.6 253.5 293.5 274.9 294.7 310.9 Plywood c/sheets 645.5 564.6 565.3 561.5 558.4 557.2 566.3 572.3 569.7 571.8 575.4 Sawnwood, Cameroon $/cum 958.3 748.9 801.0 779.0 806.3 804.1 787.1 1 81 .8 794.5 813.7 827.1 Sawnwood, Malaysia b/ $/cum 889.1 805.5 833.4 771.4 807.4 787.8 832.6 879.8 871.2 892.2 876.0 Woodpulp $/mt 820.2 614.6 857.7 627.7 715.6 780.9 875.5 916.8 914.2 918.0 918.0 Other Raw M aterials Cotton A Index b/ c/kg 157.4 138.2 194.4 41 1 .9 157.7 178.8 199.3 205.2 185.5 199.2 230.9 Cotton Memphis c/kg 61 1 .3 145.3 91 1 .9 148.8 172.4 183.6 200.1 n.a. n.a. n.a. n.a. Rubber, US c/kg 284.1 214.6 362.4 221.0 284.7 345.2 381.5 360.7 349.7 356.5 375.9 Rubber, Singapore b/ c/kg 258.6 192.1 342.9 199.3 256.5 318.6 372.7 337.4 327.4 331 .6 353.3 continued on next page a/ Included in the energy index (2000=100) b/ Included in the non-energy index (2000=1 00) c/ Steel not included in the non-energy index d/ base metals plus iron ore e/ Includes aluminum, copper, lead, nickel, tin and zinc $ = US dollar ¢ = US cent bbl = barrel cum = cubic meter dmtu = Dry Metric Ton Unit kg = kilogram mmbtu = million British thermal units mt = metric ton toz = troy oz n.a. = not available n.q. = no quotation 3 COMMODITY PRICE DATA Annual averages Quarterly averages M onthly averages Jan-Dec Jan-Dec Jan-Sep Jul-Sep Oct-Dec Jan-Mar Apr-Jun Jul-Sep Jul Aug Sep 2008 2009 2010 2009 2009 2010 2010 2010 2010 2010 2010 Fertilizers DAP b/ $/mt 967.2 323.1 471 .6 309.6 316.9 464.8 458.2 492.0 461.3 496.1 518.5 Phosphate rock b/ $/mt 345.6 1 .7 21 1 1 7.4 90.0 90.0 102.1 125.0 125.0 125.0 125.0 125.0 Potassium chloride b/ $/mt 570.1 630.4 328.1 506.8 423.0 334.0 316.1 334.2 320.0 345.0 337.5 TSP b/ $/mt 879.4 257.4 354.3 224.7 235.7 31 6.9 357.4 388.6 360.0 380.8 425.0 Urea, E. Europe, bulk b/ $/mt 492.7 249.6 266.2 241.6 248.3 281 .0 237.2 280.4 249.5 273.0 318.8 M etals and M inerals Aluminum b/ $/mt 2,573 1,665 2,1 6 1 ,81 1 2 2,003 2,1 63 2,096 2,090 1,988 1 2,1 8 2,1 62 Copper b/ $/mt 6,956 5,150 7,1 68 5,859 6,648 7,232 7,027 7,243 6,735 7,284 7,709 Gold $/toz 872 973 1 77 ,1 960 ,1 1 02 1 09 ,1 ,1 1 96 1,227 1 93 ,1 ,21 1 6 1,271 Iron ore b/ c/dmtu 140.6 1 .0 01 157.7 01 1 .0 1 .0 01 01 1 .0 167.0 205.0 205.0 205.0 205.0 Lead b/ c/kg 209.1 1 .9 71 206.8 192.8 229.3 222.1 195.0 203.2 183.7 207.5 21 8.4 Nickel b/ $/mt ,1 1 21 1 14,655 21,209 17,700 17,528 19,959 22,476 ,1 21 91 1 8 9,51 ,41 21 3 22,643 Silver c/toz 1,500 1,469 ,81 1 1 1,477 1,760 1,693 1,838 1,901 1,794 1,849 2,061 Steel products index c/ 2000=100 289 227 228 211 207 21 1 241 232 232 230 235 c/ $/mt Steel cr coilsheet, Japan, Reinstated 966 783 804 700 700 725 838 850 850 850 850 c/ $/mt Steel hr coilsheet, Japan, Reinstated 883 683 704 600 600 625 738 750 750 750 750 Steel, rebar, Japan, Reinstated c/ $/mt 760 486 567 500 522 546 621 533 540 530 530 c/ Steel wire rod, Japan, Reinstated $/mt ,01 1 0 969 732 857 81 4 751 767 678 694 670 670 Tin b/ c/kg 1,851 1,357 1,854 1,459 1 7 ,51 1,721 1,786 2,055 ,81 1 9 2,075 2,270 Zinc b/ c/kg 187.5 165.5 21 0.9 176.1 221 .4 228.9 202.6 201 .3 184.4 204.5 21 5.1 NEW World Bank commodity price indices for low and middle income countries( 2000 =100) Energy 342.0 21 4.3 264.6 230.3 256.1 266.1 267.7 259.9 257.4 260.1 262.2 Non Energy Commodities 272.0 21 3.2 257.8 21 9.8 235.2 244.2 255.3 274.0 262.3 274.6 285.2 Agriculture 229.5 197.8 220.2 199.5 21 2.6 21 6.6 21 5.4 228.5 21 9.5 228.6 237.5 Beverages 21 0.0 21 9.9 249.7 226.4 247.9 242.5 246.9 259.6 261 .7 260.4 256.6 Food 247.4 205.1 1 21 .9 206.4 21 3.7 21 3.1 201 .0 221.7 209.4 222.2 233.4 Fats and Oils 277.3 21 6.2 228.3 220.9 224.5 224.7 21 9.7 240.5 225.0 246.2 250.4 Grains 281 .7 21 4.9 201 .4 202.3 21 0.8 205.1 186.6 212.5 192.3 21 0.8 234.4 Other Food 177.1 1 .6 81 199.9 91 1 .2 202.0 205.1 189.4 205.1 204.3 201 .1 210.0 Raw Materials 195.7 168.7 225.2 168.9 192.0 1 21 .9 234.4 229.3 222.5 227.8 237.7 Timber 150.5 138.9 140.2 133.6 137.3 132.7 138.6 149.4 146.1 51 1 .2 150.9 Other Raw Materials 245.3 201 .4 31 8.2 207.5 251 .8 298.6 339.1 316.7 306.0 1 31 .5 332.7 Fertilizers 566.7 293.0 263.7 252.1 242.8 259.0 253.3 278.9 259.4 276.4 300.8 Metals and Minerals d/ 325.7 235.6 334.4 257.6 280.8 299.0 337.3 366.8 350.4 368.7 381.2 Base Metals e/ 287.9 208.9 284.8 236.0 264.6 287.0 280.9 286.5 266.4 288.9 304.3 a/ Included in the energy index (2000=100) b/ Included in the non-energy index (2000=1 00) c/ Steel not included in the non-energy index d/ base metals plus iron ore e/ Includes aluminum, copper, lead, nickel, tin and zinc $ = US dollar ¢ = US cent bbl = barrel cum = cubic meter dmtu = Dry Metric Ton Unit kg = kilogram mmbtu = million British thermal units mt = metric ton toz = troy oz n.a. = not available n.q. = no quotation 4 Selected Commodity Prices, Nominal US dollars, 2005-2010 5 Selected Commodity Prices, Nominal US dollars, 2005-2010 Cont'd 6 Selected Commodity Prices, Nominal US dollars, 2005-2010 Cont'd 7