News

October 06, 2008

Soft Commodity Prices Get Hammered Despite US Bail-Out

By Sally White

“Pork barrel” politics got the US$700 billion bail-out package voted through on Capital Hill on Friday night on a three-to-one margin. A guesstimate of US$100 billion was put on tax breaks offered, with the agriculture lobbies getting their share to help the bill through the House of Representatives. These ranged from wool producers, Alaskan fishermen, Virgin Island and Puerto Rican rum and Oregon wooden arrow-head makers.

Global agriculture futures markets have been plummeting, with the S&P GSCI Agriculture index down 15.75 per cent in September on fears for the global economy. In the year to date agriculture has reported the largest falls among the Standard & Poor’s indices, with a drop of 16.6 per cent.  Vital news came on exchange traded funds, a major market for agricultural investors. Insurer AIG has confirmed that all obligations will be honoured for over 100 exchange traded commodities offered by ETF...