Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


HSBC Global Research Commodity prices snapshot

HSBC Global Research

Commodity prices snapshot: Down in August, on falling oil and grain prices

Global commodity prices fell in August, with declines across a broad range of commodity types. Our indicator suggests the IMF commodity price index is likely to have fallen by -4.0% in August, to be -4.2% lower than a year earlier. For the second month in a row, oil prices fell noticeably despite on-going geopolitical tensions. Meanwhile, the prospect of a good harvest in the northern hemisphere continued to weigh on a broad range of agricultural commodity prices, particularly grains and vegetable oils. Metals prices were more mixed, with aluminium continuing its recent price gains, while copper and nickel prices fell.

Good weather during the northern summer looks likely to produce a bumper harvest through the US, Europe and Russia. The anticipated surge in supply has been weighing on grain prices for several months now. Since May, wheat prices have fallen by -20% and corn prices by -27%. Soybean prices are also falling (down -6% in August alone) and this is flowing through to vegetable oils too. The price of soybean oil fell -8% in August and is down around -20% from a year ago. The fall in grains prices is also impacting competing products that are not directly impacted by the crop harvest, such as palm oil which fell by -10% in August.

One of the biggest price moves during August was for pork, which fell -17% in the month, as supply has ramped up recently following a porcine virus that swept through the US earlier in the year. While pork prices have now begun to ease back, they are still +35% higher than at the turn of the year. Beef prices rose by a further +1% in August to be +33% higher over the past year.

Metals prices were mixed during August. Iron ore prices steadied, following larger declines in earlier months, but are still down -31% since the end of 2013. Meanwhile, aluminium prices continued to gain ground, up +4% over the month and +16% since the start of the year. Several years of low supply growth looks to finally be feeding through into a sustained recovery in aluminium prices.

Uranium prices halted a long slide as the temporary closure of the world’s largest uranium mine (due to strike action) pushed prices up by +8.5%. The global uranium market has had a significant oversupply in recent years due to the shutdown of Japan's nuclear power plants following the Fukushima disaster. Uranium prices are still down -12.5% from a year ago.

Broader energy prices eased further during August, with oil down -4.7% in the month and natural gas prices down -3.4%. Coal prices were flat. The oil price continues to fall despite geopolitical tensions, possibly helped by strong US oil production – US oil stocks are at the highest levels since 1990 – and signs of slower growth in China.

Australia's commodity price index rose by +0.6% in USD terms in August and by +1.5% in AUD terms. Over the past year, the price of the basket of Australian commodities has declined by -13.6% in AUD terms, reflecting the strength of the AUD in the face of falling metals prices. New Zealand's export prices have also continued to fall, reflecting a decline in dairy prices. The global dairy trade price index fell by -13% in August and is -40% lower than its February peak.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Shocking Dairy Footage: MPI Failing Our Animals And Damaging Our Reputation

Greens “Nathan Guy needs to urgently look into how his ministry is enforcing animal welfare standards, how these appalling incidents happened under its watch and what it’s going to do prevent similar incidents happening again in the future." More>>


Land & Water Forum: Fourth Report On Water Management

The Land and Water Forum (LWF) today published its fourth report, outlining 60 new consensus recommendations for how New Zealand should improve its management of fresh water and calling on the Government to urgently adopt all of its recommendations from earlier reports. More>>



Welcome Home: Record High Migration Stokes 41-Year High Population Growth

New Zealand annual net migration hit a new high in October as more people arrived from than departed for Australia for the first time in more than 20 years. More>>


Citizens' Advice Bureau: Report Shows Desperate Housing Situation Throughout NZ

CAB's in-depth analysis of over 2000 client enquiries about emergency accommodation shows vulnerable families, pregnant women and children living in cars and garages, even after seeking assistance from the Ministry of Social Development and Housing New Zealand. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news