Bad week for commodities: Oil, gold, nickel, all take a fall

profitstreetCommodities, both agri and non-agri, witnessed a slump in prices this week. In the agri commodity basket, coriander suffered the most, while in the non-agri category prices of crude oil, gold, copper and nickel slipped significantly. 

Crude oil prices have been in a falling territory since past few weeks as prices have declined by around 3.2 per cent since 19th April- 1st May 2017, while MCX oil prices have declined by 4.5 percent in the same time frame. Fading geo-political tension between US and Syria and US and North Korea and increasing oil inventories in the US have resulted in a drop in prices. 

"We have noticed fall in all the risk assets including oil as market sentiments remains weak across the globe. Linkage international prices and domestic prices will not change any basic fundamentals, except the adaptation of price behaviour linked to markets. Oil inventories have to fall constantly, which can only happen if the summer driving season starts with a bang and the inventory overhang is taken care off by increasing refinery operating capacity. We feel oil prices in the international markets can slip to $41 mark while in the Indian markets it is expected to drop to Rs.2600/bbl," said Prathamesh Mallya, Chief Analyst Non Agri- Commodity & Currencies, Angel Broking 

Gold prices too dipped in the physical as well as futures market. Gold fell below Rs 29,000 per 10 gm mark this week,In the local market, gold futures were trading around Rs 28,238 per 10 grams on Friday, down more than 2 percent compared to last week.The benchmark spot gold price is poised to end the week down about 3 percent, the biggest percentage fall since the week ending November 11. 

Copper and nickel have turned out to be the worst performers in the base metal basket this week. Both of them have declined by more than 2 percent. Copper, being an economic barometer, is hurt by global doldrums while nickel is declining following news of rejection of appointment of Regina Lopez as environment secretary by Philippine lawmakers as it is likely to ease the supply woes for the metal used in making stainless steel. 

Coriander futures prices sank to 15 months low on Wednesday after hitting lower circuit on growing concerns of rising supplies from imports and good production expectations from the new season crop in 2016-17 
The most active May coriander futures on National Commodities and Derivative Exchange (NCDEX) plunged about 24% in last one month to Rs. 6,104 per quintal. Moreover, in the current season, coriander on NCDEX witnessed heavy selling pressure during the month of April , dragging prices by 12.8% due to rise in arrivals of the new crop. The arrivals of coriander seed in the country during the first 4 month of current calendar year has increase by 30% on year to 3.31 lakh tonnes compared to 2.55 lt in 2016.

Market participants are worried about constant increase in imports of coriander supported by strong Indian rupee and decreasing export quantities from the country. The production of coriander in the country was adequate despite report of lower acreage during 2016/17 rabi season. 
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