AGRI/SOFT | Bearishness
With a
Whimper
Agri-commodities went through the wringer last year and there seems no end in sight for the low demand and oversupply scenario in 2016 either
30
the new year, as El Nino weather aberration is likely to continue to have a bearing on crops. The food price index of the Food and Agriculture Organisation (FAO) stood at an average 154.1 points in December, down one per cent compared to November as most commodities in the index barring sugar and edible oils declined. The twelve month (January- December, 2015) average was 164.1 points, almost 19% lower than 2014. 2015 was the fourth consecutive year of decline in the index.
T
he challenges faced by the agri commodities market in 2015 has not vanished in
The index is based on
international price movement of five major food commodity groups: cereals, meat, dairy products, vegetable oils and sugar. Abundant supplies in the face of a timid world demand and an appreciating US dollar are the main reasons for the general weakness that has dominated food prices in 2015, notes the FAO. The international wheat market is bearish and projected to remain so in 2016. The supply demand condition is unbalanced and projections for 2015-16 crop is at a record 735 million tonnes, up almost 10 million tonnes from
www.wealth-monitor.com | February 2016
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