News

August 26, 2008

Soft Commodities Record Biggest Gains For 33 Years

By Sally White now back from Georgia

Volatile price movements continue to keep traders highly nervous as funds respond to dollar movements, moving money out of many commodities when the US currency rises. Crops for which there are strong fundamentals, however, generally closed last week higher, helping give commodities the largest weekly gain for 33 years. The Reuters/Jeffries CRB Index added 6 per cent on the week, the highest jump since July 1975, recouping some of the recent price collapses.

Fertilisers remain in the news. China announced it is to boost and extend tariffs on fertilizer exports. Reports from Chinese government sources emerged late last week, confirming weeks of marketplace talk that export tariffs totalling 185 per cent will be applied from 1 September through 31 December on urea.

Fertiliser costs are up on average about 286 per cent since 2000. In the US they were about 77 per cent higher in June than in June 2007. Last month, potash and phosphate prices...