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  • MODERATOR:

    Hello and welcome to the web chat with Naveen Mathur, Associate Director - Commodities & Currencies, Angel Broking on 'Is the worst over for global commodities?'



  • V

    VINAY

    With the ECB cutting rates do you see that the strong rally in gold prices may take a breather for a long time to come? What is your medium term outlook on the yellow metal?

    NAVEEN MATHUR

    The rally in gold prices may take a breather, if US Federal Reserve does a rate hike. However, ECB has also increased the size of QE programme recently. THis action by the ECB will weaken their currency in the longer run, in turn strengthening dolllar and decline in commodities. However, the price rally/decline in gold will not be purely dependent on how ECB places its policy. We are expecting the trend for precious metals would be positive in near term. Currently yellow metal "Gold" is hovering around $1271 per ounce. We are expecting in near term it may touch the level of $1300 to $1320 Per ounces. $1300 levels would be treat as a resistance level.


  • M

    MOHAN

    China has been the trend setter for metals with the nation being the largest consumer. Does China continue to dictate silver prices and if so what trends do you see for the precious metal which has various industrial applications?

    NAVEEN MATHUR

    China central bank is active in doing whatever policy actions in order to prop up growth in the nation. Whether that will be a driver for all the metals including silver is a big question.. The rally in the silver prices is a function of extrreme speculation, besides, supply and demand factor. Hence, how investors place this asset as a part of the overall portfolio will determine the rally in silver prices in 2016. We are expecting the trend for precious metals would be positive in near term and silver will also follows the precious metal's trend, how ever it is also a part of industrial metals so it is also taking cues from industrial metals also. currently silver prices is hovering around $15.50 levels, and we are expecting in near term it may touch the level of $16 to $16.50 levels.


  • D

    DHIREN

    Crude oil prices seem to come off its recent highs after hitting $40/barrel. What trends do you see for crude oil prices till the onset of the winter season later this year when demand for heating oil picks up pace?

    NAVEEN MATHUR

    OPEC's decision to rebalance its oil output has been an idea in right direction in order to prop up prices. Since oil is trading below cost of production, sustainable low oil prices will not do any good for the producers of oil. Oil prices can recover in 2016. The winter gone by in the US and Europe did not do any good to prop up prices, hence, how ever the winter will be crucial for further trajectory of heating demand and oil prices As per the Technical view, it breached the resistance of $35 and trading above it. we are expecting further it may touch the levels of $42 - $44.


  • V

    VIREN

    Global copper prices have been firming up recently. Are the prices sustainable at current levels amid weak global growth?

    NAVEEN MATHUR

    Copper prices had tumbled to multi year low levels in the very first week of 2016 following crash in the Chinese equity markets. To support the ailing markets, PBoC announced some aggressive measures, most important being cut in the Reserve Requirement ratio (RRR) by 50 bps to 17 percent. Additionally, the major consumer took steps to support its flagging housing market. Along with this, widespread expectations of additional QE by the Euro Zone buoyed the metal. This led to sharp recovery in the prices. As of now, the European Central Bank eased aggressively but suggested it was running out of room to cut interest rates, pressuring the risk appetite. Moreover, highly disappointing trade data is likely to take toll on prices. So, a correction is likely in the coming few weeks


  • B

    BRIJESH

    What is your take on global sugar prices which have been in an uptrend?

    NAVEEN MATHUR

    We expect the price to move higher in coming months as the global deficit for current marketing year further widen to 5 million tonnes compared to 3.5 mt estimated in November. Again due to El Nino, the production of sugar in key production countries have taken a hit in 2015-16. In the domestic front, ISMA reported that Indian mills have achieved 2 per cent increase in sugar production for Oct-Feb period. However, there is expectation of better exports from the country as International prices have improved significantly which may help in reducing excess sugar. Moreover, rains in Brazil delaying harvesting and crushing of sugarcane, while stronger real and more cane may be diverting to ethanol in Brazil due to higher taxes on crude oil will be bullish for sugar prices.


  • K

    KARTIK

    The government is launching the third tranche of gold bonds this week. However, bond prices, which are linked to gold prices, are at Rs 2,900/gm -- over 10 per cent higher than the earlier bond prices. What is your advise to investors on the same?

    NAVEEN MATHUR

    It is the choice of the investors depending on the risk appetite whether to put money in these bonds or not. However, people who are not fond to hold the metal, but for investments purpose one might consider it as a good option. The bonds are linked to the price of gold, hence, the current trance of Rs.2900/gm is a no surprise higher issue price than the previous ones. However, if is for investments, one can take a decision to invest in it taking in to consideration the liquidity and other avenues depending on the risk profile of the investor


  • R

    RASHI

    Indian agriculture is facing crisis on the back of two consecutive poor monsoons resulting in a decline in the commodity prices especially edible oils, pulses, basmati rice, soya meal and sugar. According to you are there any initiatives listed in the Union Budget to address the problems?

    NAVEEN MATHUR

    Yes, In this budges the first piller out of nice is - Agriculture and farmer welfare with an aim to double farmers' income in the next five year - which is the biggest step towards the helping the farmers. In budget the provision for Crop Insurance, Agricultural credit and funds to long term Irrigation funds will definitely help the farmers in case of drought and crop failure. Crop insurance • The Pradhan Mantri Fasal Bima Yojana to protect the farmer from the adverse consequences of nature where farmers have to pay a nominal amount of insurance premium and get the highest ever compensation in the event of any loss suffered. Agriculture Credit • Special focus given to ensure adequate and timely flow of credit to the farmer • Target of 8.5 lakh crore of agricultural credit in 2015-16 Ground water management and Long-term irrigation fund • Rs. 6,000 crore collected through multilateral funding for Programme for sustainable management of ground water • Major programme for ground water restoration under MGNREGA - 5 lakh farm ponds and dug wells in rain fed areas Moreover, provision for Soil fertility card, connectivity from farm to market, organic farming initiatives, pulses procurement from Price Stabilisation Fund, Storage Capacity to enhancement, and ensuring MSP to all farmers are some of the initiative taken in this budget.


  • M

    MICKEY

    What is your outlook on silver for the current calendar year? Is it a good time to buy gold and silver? Do you expect the prices to soften from the current levels over the next six months?

    NAVEEN MATHUR

    We are expecting the trend for precious metals would be positive in near term and silver will also follows the precious metal's trend, how ever it is also a part of industrial metals so it is also taking cues from industrial metals also. currently silver prices is hovering around $15.50 levels, and we are expecting in near term it may touch the level of $16 to $16.50 levels. It has strong support at $13 - $14. We are not expecting correction in silver prices, we are recommending buy on dips in the silver counter. Yes this is the right time to buy gold and silver.


  • R

    RASHI

    India from being an exporter of maize has now become an importer of the same for animal feed production due to lack of monsoons. What is your outlook on the same? How do see this commodity performing in the near term?

    NAVEEN MATHUR

    As per second Advance Estimates, maize production estimated to falls by more than 13 per cent for the first time since 2009-10 to 21 million tonnes due to lower rains in Bihar and Karnataka during monsoon. However, production of maize in India is under taken during Rabi and again during summer in some part of country which may be more this year as prices were at higher side in the country. Overall, there will be a supply concern in the country this year. For that PEC has floated tenders to import corn from various origins to gap the shortfall. In our view, the prices will be a lower side in short term on anticipation of good production from Rabi crop and arrival of imported corn.


  • A

    AASTHA

    I'm doing SIP into gold fund since last 5 years which gave a negative returns. Shall I continue to do SIP in this space to shift to some other segment? My investment horizon is 5 years.

    NAVEEN MATHUR

    In last 5 year gold touched the highest levels of 35000 levels and the lowest of 24451 levels. If you did SIP in a proper manner than now your position is very near to the cost, In my view please stay with the same product, because our view on gold is optimistic and we are expecting with in a 2-3 months it may again touch 32000 - 33000 levels.


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