Fri, Feb 21 04:55 AM EST
SINGAPORE (Reuters) - Global cocoa prices have rallied to 2-1/2-year
highs on worries El Nino could return in 2014, while other agricultural
commodity markets could also be hit by the specter of the weather
El Nino - a warming of sea-surface temperatures in the Pacific - affects
wind patterns and can trigger both floods and drought in different
parts of the globe, curbing food supply.
The worst El Nino on record in 1997/98 was blamed for massive flooding
along China's Yangtze river that killed more than 1,500 people.
El Nino means "boy" in Spanish and was first used by anchovy fishermen in Ecuador and Peru in the 19th century.
Below are some of the key commodities that could be affected by its return.
GRAINS, OILSEEDS, LIVESTOCK
El Nino could bring dry weather to Australia, which is already
struggling with a drought that has forced ranchers in the world's
third-biggest beef exporter to cull cows, raising fears of a global beef
shortage. El Nino could also curb wheat, sugar and cotton production in
An El Nino episode usually results in below-average rainfall in main
palm oil producers Indonesia and Malaysia, cutting yields and pushing up
It could also hurt crops in Thailand, one of the world's largest rice
exporters, potentially worsening drought conditions usually seen in
El Nino would bring milder-than-normal temperatures to the major crop
production areas of the U.S. Midwest. Iowa and Minnesota would benefit
from the event's tendency for wetter-than-normal summers as the western
Corn Belt continues to recover from a drought.
But excessive rains in the saturated soils of the eastern Corn Belt
could be troublesome, particularly following this year's overly snowy
winter. Drought-hit California, a major dairy and wine grape state,
could see more rain than normal.
In China, El Nino could bring more rain to areas south of the Yellow
River and cause flooding in the country's major rice and cotton growing
Lower-than-normal temperatures could also occur in the country's top
corn and soy areas in the northeast, leading to frost damage and lower
A strong El Nino in India would trigger lower production of summer crops
such as rice, sugarcane and oilseeds. India is the world's No.2
producer of rice and wheat.
The Philippines' weather bureau already expects rainfall to be "way
below" normal by April in most parts of the country, including
rice-growing provinces in the Central Luzon region and sugar plantations
in the Visayas provinces. El Nino could worsen that.
Previous El Nino episodes caused severe dry spells in the archipelago
affecting vast tracts of farmland. A rice shortfall due to typhoons and
drought connected to El Nino in 2010 prompted record imports of the
Global cocoa prices jumped to their strongest in more than two years in
February on concerns a returning El Nino could cut output in main
producers Ivory Coast, Ghana and Indonesia. The global market is
expected to experience a second straight deficit in 2014.
Erratic weather could affect the development of coffee cherries and
cocoa pods. In Indonesia, the world's third-largest cocoa producer, El
Nino usually means extremely dry weather.
Indonesia's coffee output is forecast to fall to 9.5 million 60-kg bags
in 2013/14 from 10.5 million in 2012/13 after dry weather at the start
of the season reduced flowering and excessive rain during cherry
development cut yields, according to the U.S. Department of Agriculture.
Indonesia competes in the robusta market with Vietnam, which would also suffer from an El Nino.
The Central Highlands region, which produces about 80 percent of
Vietnam's coffee, has entered the dry season, and falling waters in
rivers and streams coupled with strong wind would raise the risk of
water shortages, according to the Science and Technology Department in
the central highland province of Kontum.
El Nino usually brings warmer winters to Brazil, the world's top coffee
producer, reducing the risk of coffee frost. But heavy rains would crimp
Drier weather could also help beat back moisture-loving roya or leaf
rust fungus that is ravaging coffee plantations in Central America.
In 2009, El Nino turned Indian monsoon patchy, leading to the worst
drought in nearly four decades which helped push global sugar prices to
their highest in around 30 years.
(Reporting by Lewa Pardomuan in Singapore, Ho Binh Minh in Hanoi,
Apornrath Phoonphongphiphat in Bangkok, Anuradha Raghu in Kuala Lumpur,
Yayat Supriatna in Jakarta, Colin Packham in Sydney, Peter Murphy in
Bogota, Dominique Patton and Niu Shuping in Beijing, Chris Prentice and
Marcy Nicholson in New York, Erik Dela Cruz in Manila, Ratnajyoti Dutta
in Delhi and Karl Plume in Chicago; Editing by Joseph Radford)
me @ LOTS Trading Club (LTC)
Senin, 24 Februari 2014
Rabu, 19 Februari 2014
Feb. 18 (Bloomberg) -- Indonesia’s rupiah is set to snap its world-beating gains of the past week, trading patterns suggest, amid concern a clampdown on commodity exports will swing the nation’s trade balance back to the red.
The currency strengthened 3.3 percent in the five days through yesterday to 11,785 per dollar, sending a measure known as its 14-day relative-strength index to 24, the lowest since May 2011. Readings below 30 indicate a turnaround is likely. The rupiah also breached its Bollinger band as it climbed to a three-month high this week, adding to signs the rally may be overstretched.
December’s trade surplus was the biggest in more than two years and helped rein in a current-account deficit that spurred an exodus of funds from Indonesian assets in 2013, when the currency sank 21 percent. The nation banned shipments of unprocessed ore last month to encourage investment in smelters and refineries, a policy that Nomura Holdings Inc. and Bank of Tokyo-Mitsubishi UFJ Ltd. say led to front-loading of exports that distorted trade figures toward the end of last year.
“There’s very little room for the rupiah to gain because it has already strengthened so much,” Leong Sook Mei, the Southeast Asia head of global markets research at Bank of Tokyo-Mitsubishi in Singapore, said in an interview. “The quality of Indonesia’s current-account improvement remains suspect. And of course we still have electoral risk.”
A legislative election is scheduled for April and Indonesians will vote again in July to choose a successor to President Susilo Bambang Yudhoyono, who has led the country since 2004. Joko Widodo, the reform-minded Jakarta governor who is leading in opinion polls, has yet to secure his party’s nomination to run.
The rupiah rose as much as 1.4 percent to a three-month high of 11,658 yesterday, according to prices from local banks compiled by Bloomberg. The currency fell 0.5 percent to 11,844 per dollar in Jakarta today, while one-month non-deliverable forwards dropped 0.5 percent to 11,740.
Indonesia’s current-account deficit shrank to 1.98 percent of gross domestic product in the fourth quarter, from 3.8 percent in the previous period, the central bank said Feb. 13.
The gains in the Indonesian exchange rate in the five days through yesterday were the most among some 150 currencies tracked by Bloomberg. Overseas investors have pumped $1.2 billion into the country’s stocks and local-currency bonds this year on the improving economic data.
The country posted a $1.5-billion trade surplus for December on Feb. 3 as exports rose 10.3 percent from a year earlier, more than the median estimate in a Bloomberg survey, which saw a 1.7 percent increase.
Bank Indonesia raised its benchmark interest rate by 1.75 percentage points last year to slow the economy and rein in the current-account shortfall, which ballooned to a record 4.4 percent in the second quarter. The central bank said last week the deficit in the broadest measure of trade would probably be 2.5 percent this year, from 3.26 percent in 2013.
“Because of the front-loading of the ore exports, we don’t think the trade surplus will continue in the first quarter and beyond,” Enrico Tanuwidjaja, a Singapore-based economist at Nomura, said in a phone interview yesterday.
Goldman Sachs Group Inc. estimates “fair value” for the rupiah at around 11,800 per dollar, Singapore-based analyst Mark Tan wrote in a Feb. 12 note. The U.S. bank had forecast the currency to reach that level in 12 months.
A gauge of expected fluctuations in the rupiah is the highest among its Southeast Asian peers. Three-month implied volatility rose 10 basis points, or 0.1 percentage point, to 11.41 percent today. That compares with 7.23 percent for Malaysia’s ringgit and 6.6 percent for Thailand’s baht.
“Volatility in the rupiah could still be high in the first half,” Dian Ayu Yustina, a Jakarta-based economist at PT Bank Danamon, majority-owned by Singapore’s Temasek Holdings Pte, said in an interview yesterday. “We’re still cautious on the rupiah because the trade surplus could have been distorted.”
After the rupiah’s daily trading range breached the lower end of its Bollinger band in October and the relative-strength index fell past the 30 threshold, the rupiah weakened from that month’s high of 10,930 to a five-year low of 12,285 on Jan. 7.
Developed by John Bollinger in the 1980s, the bands are used by technical analysts to identify the turning point in an asset’s trajectory. The limits represent two standard deviations from the 20-day moving average, implying that the likelihood of a currency moving outside the band is small.
The dollar’s 20-day period commodity channel index against the Southeast Asian currency dropped below minus 100 last week, suggesting the dollar was oversold, data compiled by Bloomberg show. The index was minus 126 today.
The rupiah may weaken to around 12,000 per dollar in the short term and trade in a range of 11,500 to 12,000 over the next three months or so, said Koji Fukaya, chief executive officer and currency strategist at FPG Securities Co. in Tokyo.
“I wouldn’t be surprised if the rupiah sees some correction from quite a sharp rally,” he said in a phone interview from Tokyo. “It may be stabilizing overall, but there needs to be technical corrections from time to time.”
To contact the reporters on this story: Lilian Karunungan in Singapore at email@example.com ; Yumi Teso in Bangkok at firstname.lastname@example.org
To contact the editor responsible for this story: James Regan at email@example.com
me @ LOTS Trading Club (LTC)
Posted by Saham Pilihan at 09.06
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