Commodity News Snapshot-Pakistan

Flash floods cause over Rs 300 billion loss to agriculture sector

ISLAMABAD (September 23, 2010): The estimated loss to agriculture sector of Pakistan in recent flash floods is over Rs 275-300 billion. The representatives of farmers, cotton industry and leather industry while talking to Business Recorder said that the recent floods have caused severe damage to the standing crops along with shortage of livestock hence the government should provide maximum assistance for revival of the agro-economy.

Country has sufficient stock of wheat, rice: Kaira

ISLAMABAD: The federal cabinet was on Wednesday informed that the country had sufficient stock of wheat, rice and pulses despite massive crop losses in floods.

Over 800 containers of Pakistani rice held at Kenyan port: laboratory analysis reports awaited

KARACHI (September 23, 2010): Over 800 containers of Pakistani rice worth $8.0 million have been held at the Kenyan port as the authorities refused to release them until laboratory analysis reports. Kenyan customs have imposed restrictions that all rice imported into the country will not be released from the port until laboratory analysis reports (LAR) in respect to grading have been received in the station of clearance.

THE RUPEE: dollar crosses 86

KARACHI (September 23, 2010): The dollar was trading at 86 versus the rupee on the open market, it, however, shed its gains on the interbank market on Wednesday in process of trading, dealers said. The rupee fell in terms of dollar, shedding five paisa for buying at 85.90 and it also dropped by 15 paisa for selling at 86.10, they said.

TCP to offload 50,000 tons of sugar in open market

KARACHI (September 23, 2010): Following the Economic Co-ordination Committee (ECC) decision, the state run grain trader is all set to offload 50,000 tons imported white sugar in open market, a high official told Business Recorder on Wednesday. The ECC on Tuesday decided to offload imported sugar in the open market, after provinces failed to sell subsidised imported sugar in domestic market at low rates during Ramazan, following which sugar price surged to peak level of Rs 86 per kg in open market.

 

Cotton rates remain stable in improved activity as exporters enter market

KARACHI (September 23, 2010): Improved business was seen on the cotton market on Wednesday as exporters entered the market to make deals, dealers said. The Karachi Cotton Association (KCA) official spot rate did not show further rise, holding the overnight level at Rs 7,250, they said. In the ready business approximately, 13000 bales of cotton changed between Rs 7050-7400, they said.

 

Gold up by Rs 400 per tola

KARACHI (September 23, 2010): Gold on Wednesday touched a fresh peak of Rs 41,150 per tola while silver price equalised its previous record high of Rs 620 per tola on the local market, trader said. Gold was selling for Rs 40,750 per tola a day before and went up hitting a new high of Rs 41,150 on the local market, posting a rise of Rs 400. Price of gold per 10 gram touched Rs 35,271, up from Rs 34,942, they said.

Bullion Rates

KARACHI (September 23, 2010): Gold and silver rates in rupees per 10 grams prevailing in major cities on Wednesday (September 22, 2010).

International News

Malaysian palm oil rises

KUALA LUMPUR (September 23, 2010): Malaysian palm oil and its rival US soyaoil recorded small gains on Wednesday as traders waited for more news on weather in key grain producing regions in the Americas and Asia. Chinese financial markets are closed for the rest of this week, giving few cues to vegetable oil trade.

US wheat futures recover

HAMBURG (September 23, 2010): US wheat futures rose by more than one percent in European and Asian trade on Wednesday, buoyed by a weaker dollar as well as a fresh tender by Egypt, the world's largest wheat importer. The US Federal Reserve's determination to prevent deflation, revealed on Tuesday, also lent support, given that investors often buy commodities as a hedge against inflation.

Oil falls below $75 a barrel

LONDON: Oil fell below $75 a barrel on Wednesday, reversing earlier gains after government inventory data showed a rise in crude and oil product stocks.

Gold hits record high, above $1,295 an ounce now

* Silver also hit a 2½-yr peak, edges closer to its highest in 30 yrs

LONDON: Gold hit record highs for a fifth consecutive session on Wednesday after the Federal Reserve signalled it stood ready to inject fresh cash into the economy, knocking the dollar and whetting investor appetite for bullion.

Commodity News Snapshot-Pakistan

THE RUPEE: divergent trend

KARACHI (September 20, 2010): The rupee moved both ways on currency market during the week ended on September 17, 2010. On the interbank market, the rupee showed no major change against dollar for buying and selling at 85.72 and 85.75 despite higher demand for the US currency.

Short supply, globally rising prices cause panic buying shooting spot rate to Rs 6,950, in ready business to Rs 7,250

KARACHI (September 20, 2010): Nearly panic lifting in cotton was marked on the very opening day of the market after Eid holidays for India's change in perception to hold back cotton exports up to October 1, 2010 - which pushed spot rate by Rs 550 higher by the close of the week on September 18-2010. The prices in ready business touched the peak of Rs 7,250.

Cotton market fast approaching saturation point

KARACHI (September 20, 2010): The Pakistan Cotton Ginners' Association (PCGA) have released their fortnightly cotton arrival and disposal report which placed seed cotton arrivals equivalent to 1,447,596 bales, total unsold bales at 202,676 bales (14.0% of total arrivals) and fortnightly flow at 452,405 bales (Per day Average 30,160 bales).

FAO official says: floods devastated crops, irrigation system, livestock

MULTAN (September 20, 2010): FAO Country Head Mauji Damianie has said that the recent flood damages assessment report shows that in all the four provinces of Pakistan and Azad Jamu Kashmir (AJK), an area of 1,313,756 hectares of field crops was reportedly destroyed.

Gold hits new high of Rs 40,600 per tola

KARACHI (September 19, 2010): Global gold value surge continues pushing gold prices to a new peak of Rs 40,600 per tola on the local market on Saturday, a trader said. Gold trading began today after one day of markets closure, (because the city mourned the assassination of an MQM leader - Dr Imran Farooq in London) with Rs 40,550 per tola and Rs 34,757 per 10-gram on the local market.

 

International News

Thai white sugar premiums hold near record levels

SINGAPORE (September 19, 2010): Premiums for Thai white sugar held near record levels on steady purchases from Southeast Asia, but consumers turned their back on raws as futures prices surged to a 7-month high, dealers said on Friday. There were no offers for the widely-traded high polarisation, or Hi-pol Thai raws, for prompt shipment. Trading of raw sugar for the Japanese market, or J-spec, slowed to a trickle after some cargoes were traded at record premiums last week.

Gold strikes record high close to $1,300

LONDON (September 19, 2010): Gold prices struck record highs close to 1,300 dollars last week as investors sought alternatives to the dollar amid heightened fears about the fragile state of the US economic recovery. Gold prices hit an all-time peak of 1,282.97 dollars an ounce on Friday as the dollar waned on mounting expectations that the Federal Reserve will pump more money into the flagging US economy.

 

Philippine rice output seen 3.2 million tonnes

MANILA (September 19, 2010): The Philippines' unmilled rice output will be about 3.2 million tonnes below target in 2010, but stockpiles are ample and imports for 2011 will be lower than this year's record levels, the head of the national grains agency said. "There will be an expected shortfall in production of palay (unmilled rice) of about 3.2 million tonnes and the harvest is delayed," Angelito Banayo, the head of the National Food Authority (NFA) told Reuters in an interview at his office in Quezon City.

Rice Prices `Worrisome' as Global Supplies Tightening, Biggest Buyer Says

Rice prices are becoming “worrisome” as global supplies tighten because of crop losses in some of the largest exporters, according to an official in the Philippines, the world’s biggest buyer. 

The global supply-and-demand balance is “not at the 2008 level yet, but it’s pretty worrisome because of the prices,” Lito Banayo, head of the National Food Authority, which handles state rice purchases in the Philippines, said in an interview in Manila yesterday.

The United Nations Food & Agriculture Organization’s global Food Price Index surged in August to the highest level since September 2008 as wheat and rice prices advanced after Russia, the world’s third-largest wheat grower last year, banned exports and flooding in Pakistan damaged rice crops, curbing supplies of Asia’s two main staple grains.

The FAO pared its estimate for global rice production on Sept. 1 for the second time since April as lower water levels in the Mekong River curbed yields in Thailand and Vietnam, the world’s two biggest exporters, and flooding slashed the harvest in Pakistan, the third-largest shipper.

The agency’s Rice Price Index, which tracks 16 export prices around the world, climbed to a five-month high of 215 points in August.

“We feel the market could be subject to a supply crunch,” Jonathan Barratt, managing director at Commodity Broking Services Pty. in Sydney, said in an e-mail to Bloomberg News today. “Already we have seen a strong movement in rough rice” prices, he said.

Thai Prices

Rice futures advanced to a record $25.07 per 100 pounds in Chicago in April 2008 as exporting countries including India and Vietnam restricted shipments, adding to concerns about a global food shortage that sparked riots from Haiti to Egypt. The Thai export price, the benchmark for Asia, surged to an all-time high of $1,038 a metric ton a month later.

Futures in Chicago have gained 23 percent since slumping to the lowest in almost four years in June. The December-delivery contract traded at $11.685 at 11:18 a.m. in Singapore.

The Thai export price may rise to $525 a ton in October, according to the median estimate in a Bloomberg News survey of 10 exporters and traders last month, as supply tightens ahead of the country’s harvest, which has been delayed because of drought. The price, updated weekly by the Thai Rice Exporters Association, climbed to a five-month high of $495 a ton yesterday.

The FAO cut its rice production forecast for this year to 467 million tons on Sept. 1, compared with 474 million tons in April, and 472 million tons in a June report.

Pakistan Losses

Crop losses in Pakistan “could negatively affect the rice trade,” the FAO said. The agency reduced its forecast for next year’s global exports to 29 million tons, from an estimated 30 million tons this year.

Exports from Pakistan may slump as much as 35 percent to 3 million tons in the year that began July 1, from 4.6 million tons a year earlier, after the deadliest flood in the nation’s history destroyed crops, Malik Jahangir, chairman of the Rice Exporters Association of Pakistan, said Sept. 1.

Shipments from India of basmati rice, which is at least twice as expensive as the regular variety, may surge by about 22 percent after the floods in Pakistan, Anil Mittal, chairman of KRBL Ltd., the country’s biggest exporter, said yesterday.

“Timing of when to buy is important” for the Philippines, Banayo said. The country’s government is still “validating” production figures to gauge the volume of rice it needs to purchase for 2011, he said.

Supply in the Philippines may tighten after drought caused by El Nino delayed planting. The nation’s main harvest, which typically begins mid-September, may be delayed by at least a month, Agriculture Secretary Proceso Alcala said in July.

Drought may cut rough rice production in the Philippines by 15.2 percent to 9.24 million tons in the first nine months of the year, compared with the same period last year, according to a July report by the nation’s Bureau of Agricultural Statistics.

To contact the reporters on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net Cecilia Yap in Manila at cyap19@bloomberg.net