Commodity Online
Global economic meltdown and recession fears are leading to a big drop in commodity prices.
A report by India’s National Commodity and Derivatives Exchange (NCDEX) says commodity prices in global markets have declined by up to 61 per cent since July due to slowing demand, firm dollar and robust production estimates of farm items.
It said brent crude oil prices have declined over 60 per cent to $53.24 a barrel in November from $133.87 in July, as industrial activities in major economies slowed down.
While crude oil (Dubai) witnessed a fall of about 61 per cent to $51.38 a barrel last month, the WTI crude oil fell 57 per cent to $57.29 a barrel.
India imports 123 million tonnes of crude oil a year, about 75 per cent of its total domestic consumption. “Prices of crude oil have dipped following lower demand due to slowdown in growth in developed countries, better supplies and higher stocks in the US,” the report said.
It pointed out that the rise of the dollar against the euro and the yen amid fears of inflation has caused the retreat from raw materials.
Investors, who viewed commodities as a hedge against inflation, are scrambling to get out, the report observed. Investors h ad earlier parked their funds with commodities to benefit out of the depreciation of the dollar, the report said.
Metals prices, too, came under severe pressure and declined by up to 56 per cent. Copper saw the maximum fall in prices to Rs 3,717 per tonne from Rs 8,414 four months ago. Steel (rebar) prices have fallen by over 30 per cent to $683 a tonne from $980 during the period. Similarly, tin prices have dipped by 41 per cent to $1,364 a tonne from $2,341.
