COMMODITIES NOW
A good example of this comes in a recent position paper from the
EDHEC-Risk Institute which reveals that French President Nicolas Sarkozy’s view that “the financialisation of agriculture markets… is a contributory factor in price volatility…” is contradicted by Dr. Pierre Jacquet, Chief Economist of the Agence Française de Développement, who notes that a number of market-based solutions could potentially help developing countries better manage commodity price volatility, including increasing access to risk-hedging instruments.3
“Right now, market sentiment seems at odds with the robustness of commodity fundamentals”
New investors have poured into commodities in the last decade leading to this financialisation of markets, altering price behaviour and market dynamics. So politicians and regulators, who know that voters are getting angry about price increases and volatility, are set to unleash new rules and restrictions on activity.
Footnotes: 1. Remarks at the Royal Institute for International Affairs - Chatham House by By Christine Lagarde, Managing Director, International Monetary Fund (September 2011).
2. A Commodities Recession Chart Book, Standard Bank, August 2011. 3. A Review of the G-20 Meeting on Agriculture: Addressing Price Volatility in the Food Markets, Hilary Till, Research Associate with EDHEC-Risk Institute.
Commodity professionals will continue agonising over the details as they emerge more fully, and we will endeavour to give you our advice and opinions: go to the Commodities Now website for updates. In the meantime, and although
the past few weeks have been difficult for all growth-sensitive assets, commodities are holding up better than most. But the jury is still out as to whether recent commodity price falls are merely a repeat of a familiar pattern of the upward path in commodity prices being interrupted by macroeconomic and financial uncertainties. So, volatility will prevail and as BarCap recently noted, “Right now, market sentiment seems at odds with the robustness of commodity fundamentals, and any brightening of the gloom could boost prices quite quickly. •
www.commodities-now.com
Amazing speaker line-up includes:
H.E. Amina Benkhadra
Minister of Energy, Mines, Water and Environment Morocco
24 - 27 October 2011, Shangri-La Hotel, Dubai, UAE How to access mining projects, licenses and investors
H.E. Fekry Youssef Undersecretary
Ministry Petroleum and Mineral Resources Egypt
Meet all of the Middle East and North Africa’s major mining ministries Form relationships with government officials from Saudi Arabia, Egypt, Morocco, Yemen, Afghanistan, Jordan and more, as they outline the latest regulatory developments
Dr Abdallah Attas
Assistant President Technical Affairs Saudi Geological Society
Learn from the experiences of international mining companies Hear success stories from companies established in the region, including Rio Tinto, Ma’aden, Managem and more
Discover the latest project and development opportunities Get first-hand information on exploration opportunities in emerging mining markets
Connect with investors and raise capital Partner with local and international investors in search of high potential mining investments
H.E. Ameer Salem Al-Aydaroos Minister Oil and Minerals Yemen
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H.E. Wahidullah Shahrani Minister of Mines Afghanistan
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