• According to GFMS Metals Consulting of UK, zinc average prices may drop 39% in 2009 as a decline in supply will be outpaced by a drop in consumption. Zinc surplus is forecast to widen to 210,000 tonnes, compared with 198,000 tonnes a year ago, before narrowing to 46,000 tonnes in 2010 and moving to a deficit of 247,000 tonnes in 2011. Zinc cash prices are forecast to average $1,150 a tonne compared with $1,870 a tonne last year. Prices have averaged $1,171.88 since January.
• Rice prices are likely to decline, especially after elections as the rice curbs imposed by Andhra Pradesh and Karnataka in rice movement will go after the elections. According to the Food Corporation, rice stocks as on 1st March was 21.3 million tonnes (mt) against 14.7mt during the same period a year ago. According to the Food and Agricultural Organisation, Indian rice production is likely to be a record 97.25mt, 1.6% more than last year.
• Gold, seen as a safe haven, fell over the fortnight, as investors shifted more funds into equities amid optimism that the worst of the global economic slump may be over.
Wheat prices are crashing, thanks to an oversupply of the commodity. Nearly 78 million tonnes of wheat has been added to the existing stocks during the current season. This coupled with a two-year ban imposed by the government on export of wheat is creating a much bigger problem. State agencies are expected to buy about 24 mt of wheat in 2009-10 season compared to 22.5 mt they bought last year. Wheat is currently trading at prices much below the minimum support price in major markets like Uttar Pradesh and Rajasthan. What plagues Indian wheat suppliers is, however, the higher taxes in the largest wheat growing states of Punjab and Haryana which could probably keep international agri-trading entities like Cargill, Glencore and the Australian Wheat Board from buying Indian wheat.
Some funds were significantly in cash at the market peak last year. Yet, they were not the...