Global commodity bourses bounce back

Written by Commodities Bureau | New Delhi, Oct 17 | Updated: Oct 18 2008, 06:05am hrs
After continuously declining since Monday, the investors in the global commodities market had a sigh of relief as most of the commodities prices saw an upward trend. The commodities prices on Friday rose after incurring the previous sessions hefty losses as financial market turned higher again after rise in US stocks.

Two commodities with would significantly impact the prices at home crude and palm oil, as the significant portion of countrys domestic consumption is sourced from abroad, saw an upward trend in the prices after steadily declining during last few weeks.

Palm oil futures in Kuala Lumpur had been declining consistently due to concern drop because of a worldwide recession and on expectations for increased supply. Palm oil for January delivery gained as much as 3% to 1,700 ringgit ($482) a metric tonne on the Malaysia Derivatives Exchange, rebounding from the lowest since November 2006 on Thursday. The contract was trading at 1,678 ringgit on Friday.

International crude oil prices rose above $ 70 after Organisation of the Petroleum Exporting Countries (OPEC) said that it might slash production to stop a price slum. The OPEC on Thursday said its special ministerial meeting on the impact of the financial crisis on oil prices would be re-scheduled to October 24 instead of November 18.

The crude prices recovered from a 16 months low. Oil has tumbled more than 50% since reaching a record $147.27 a barrel in July as the worst financial crisis since the 1930s threatens to push the world into a recession, curbing fuel demand. Oil prices rebounded in Asian trade Friday above $ 73 a barrel, climbing from Thursdays close of $69.85 per barrel

According to a Bloomberg report, Crude oil for November delivery rose as much as $3.17, or 4.5%, to $73.02 a barrel, and was trading at $70.48 at mid-day on the New York Mercantile Exchange.

The copper gained more than 6%, zinc jumped 9% and sugar and coffee also saw a upward trends. However, gold extended the previous sessions losses as the dollar firmed up. According to Reuters reported that European shares jumped in early trade, tracking gains in the United States and Asia. The Dow Jones industrial average jumped 4.7% while the broader Standard & Poors 500 Index climbed by 4.2%.

But commodity prices remain well below where they started the year with fears about demand and aversion to risk making investors rush from the sector.

At the London Metal Exchange copper surged as much as 6.4% to a high of $4,960 a tonne, after declining more than 5% to a 33-month low at $4,545 during the previous session.

Aluminium rose $7 to $2,247 a tonne, but is still a third off its all-time high it reached in July, weighed down by a 1.47-million-tonne stockpile in LME warehouses. Analysists said that with huge stocks, aluminum prices should come down further.

At LME, Gold eased below $800 an ounce, extending the previous sessions 5% drop, on pressure from a stronger dollar. Spot gold was quoted at $798.65/801.15 an ounce, down from $804.50 late in New York on Thursday. Prices tumbled in that session as funds liquidated gold holdings to cover losses on other markets.

Sugar, coffee and cocoa futures rose on Friday although gains had been trimmed by midday as the commodities tracked fluctuations in global equity markets.

At the Multi Commodity Exchange (MCX) at home, December 2008 contracts for Gold went down by 6.03% to Rs 12784 per 10 grams while January 2009 contact fell by 6.4% at Rs 12786 per 10 grams. The December 2008 contract for silver lost by 12.12 % to Rs 17381 per kg.

According to a MCX statement, platinums December 2008 contract shrank by to Rs 1568 per 10 grams. The December 2008 contact for aluminium lost by 4.85% to Rs 104.85 per kg, The coppers November 2008 contract by went down by 11.58% to Rs 231.40 per kg,