Commodity prices plunge on global cues

Commodity prices continued their southward journey on Monday following a crash in international prices. The fall in edible oil prices led to many importers, refiners and traders incurring heavy losses. There were also concerns over a payment crisis and likely default in payment smaller importers.

Base metals nosedived 3-4 per cent across all sectors, taking a cue from LME. Copper in the domestic market closed at Rs 269.80 a kg, aluminium dipped by Rs 107.50 a kg, zinc lost Rs 74.90 a kg, while nickel dropped to Rs 701.70 a kg.

In London, however, copper traded at $5,608, aluminium at $2,265, while nickel and zinc were quoting at $14,600 and $1,551 a tonne during early trade on Monday.

Gold and silver surged as investors parked their funds, re-affirming their status a safe-haven investment. Gold shot up to $857, a rise of about $25 from early London trade, while in the local market, the yellow metal stayed at Rs 13,161 per 10 gm.

Crude palm oil for delivery in December plunged over 4 per cent on MCX to Rs 316.70 per 10 kg as the benchmark December contract on the Bursa Malaysia Derivatives Exchange dropped 200 ringgits to 1,800 Malaysian ringgits, the lowest since November 20, 2006.

Palm oil prices were trading at their lowest in more than 22 months and were around 60 per cent below their record levels of 4,486 ringgitt ($1,289) in March. Within a month, palm oil has crashed more than 10 per cent in India.

Platinum for delivery in December fell about 4 per cent on the Multi Commodity Exchange to close the morning session at Rs 1,553 per gram.

“Global prices of commodities have been crashing as investors are selling them to generate cash as they are doing in other assets classes,” said Gyanshekhar, director, Comtrenz.

Bharat V Mehta, executive director, Solvent Extractors’ Association, said “The current fall in edible oil prices has led to a crisis-like situation and the government must address the issue to support the refining industry and farmers.”

Average commodity price ($/tonne)
Commodity	Sept	Aug	July	Jun	May	April
Copper	6,991	7,635	8,414	8,261	8,383	8,685
Zinc	1,735	1,723	1,852	1,894	2,182	2,264
Lead	1,868	1,924	1,945	1,863	2,235	2,823
Aluminium	2,526	2,764	3,071	2,958	2,903	2,959
Tin	18,369	20,026	23,139	22,229	24,062	21,659
Nickel	17,795	18,928	20,160	22,549	25,735	28,763
Gold ($/oz)	829	837	940	891	891	910
Silver ($/oz)	12	15	18	17	17	18
Brent Crude ($/bbl)	99	114	134	133	124	110
Crude Palm Oil (Malaysia, ringgit/tonne)	2340	2,647	3,364	3,593	3,538	3441