Page 86 - MEX-Yearbook-2017

MEX Almanac

January 2017

Precious Metals gas declined by 11.63%. Its price was driven by the changing weather.
The precious metals basket has undergone a bullish trend during the month As the weather moderated, natural gas usage fell as heating needs
of January as all the four metals traded north. The election of President of decrease. The decrease in demand for natural gas decreased inventory
the USA, Donald Trump and the Brexit of the United Kingdom from the in storage.
European Union had a severe effect in the investment and price of precious
metals. The newly elected president of America, Donald Trump’s initiatives Brent Crude Open Close % Change
began that month. The weak US dollar gave rise to the increased investment Crude Oil 5701 5584 -2.05%
in safe-haven assets like gold and silver. There was a lot of uncertainty and Heating Oil 5410 5337 -1.35%
lot of backlash over the administration that caused huge uncertainty in the Natural Gas 45.61 43.16 -5.37%
market that brought back the life of gold market. Silver was also correlating 355.2 313.9 -11.63%
with gold making it an excellent alternative investment with an inflation
hedge. The increasing demand for platinum and palladium from international Agro
investment had increased its prices to great extent i.e. above 10% in the All of the agro commodities during this month had witnessed bullish market
month of January. The price also increased as a result of declining output other than cocoa and soybean oil. The abundant supply of the cocoa in
from top producer South Africa which together with Russia is responsible for West Africa caused by favorable weather conditions and the strong pace
more than 80% of global supply of the metals. of port arrivals in top producer Ivory Coast had caused the price of cocoa
to decline. Coffee farmers across East Africa faced a biting drought that
Gold Open Close % Change reduced the output of coffee and increased the price. Besides drought, the
Silver 37005 38907.5 5.14% farmers also faced rising costs of labor and inputs, infestation by pests and
Platinum 513.5 563.5 9.74% diseases, competition from other land use and poor governance of marketing
Palladium 29125 32070 10.11% cooperatives. The price of corn remained bullish that was consistent with
21851 24301 11.21% downward movement of global corn stocks. The price of cotton reached
a five-month high at this time. Soybean oil prices reduced due to weak
Base Metals international market situation and weak demand from buyers. However the
In the month of January, the copper market has undergone bullish. It was price of soybean increased by 1.93% since the production of soybean in
experienced that the supply met solid demand growth, setting aside the Argentina was reduced due to flood which was the world’s largest exporter of
impact of strong investor sentiment lifting prices. The result had raised soybean. Sugar price hit the highest in seven years this season. India’s sugar
prices on the basis of a relatively balanced market. In addition, the copper production dropped after back-to-back drought ravaged cane crop in the top
market was in bullish posture as the U.S dollar index was sharply lower producing western state of Maharashtra. The price of wheat had declined to
and crude oil prices were solidly higher. the extreme point where farmers were discouraged to do the production. But
this month, the price of wheat increased by 1.60%.
Open Close % Change
Copper 552.6 600 8.58%

Energy Cocoa Open Close % Change
The price of energy contracts saw strong bearish trend for the month of Coffee 212.5 209.4 -1.46%
January as all four energy commodities being traded in MEX terminal Corn 303.4 328.3 8.21%
moved south. The main reason of oil price fall included rapid expansion Cotton 13.87 14.12 1.80%
in unconventional supplies, shift in the OPEC policy after a period of Soybean Oil 156.6 164.98 5.35%
high prices, market sentiments and rising demand in Asia- Pacific area. Soybean 76.82 74.68 -2.79%
OPEC’s biggest producer strategy of cutting down the output to try to Sugar 36.82 37.53 1.93%
draw down oversupply and prop up prices had motivated U.S shale to Wheat 43.22 45.14 4.44%
increase drilling and manufacturing activity and also selling the oil in 15.02 15.26 1.60%
high discounts which kept the price of oil lower. The price of natural
The figures above are the percentage change in the prices of corresponding commodity over the
corresponding month. % change is calculated as ((Close-Open)/Open*100)

85 | MEX NEPAL YEAR BOOK 2017