News

October 27, 2008

Commodity Prices Continue To Tumble As Demand Slows Down

Sally White

It was a week when all one could do was watch awe-struck, as share prices fell internationally into a apparently bottomless pit on fears that economic slowdown would turn into a global slump, taking other markets with them. The Baltic Dry Index, a benchmark for commodity-shipping rates, fell to the lowest in more than six years. In fact it has fallen by nearly 70 per cent in the three months to September 30, the largest quarterly drop since the exchange began compiling the data. It is down 62 per cent so far this month at 1,221 points, after rising to a record high of 11,793 points on May 20.

"Demand for commodities is definitely slowing down,'' Yu Mengguo, a senior analyst at Jinpeng International Futures was reported as saying from Beijing. "That's being reflected in tumbling prices,  for which we can't see a  bottom  right now."  The Reuters/Jefferies CRB Index, which tracks commodity futures prices for 19 raw materials, plunged to the lowest in four years in the widespread de-leveraging by funds of all sorts. Prices for all agriculture...