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COMMODITY ROUND UP [Vol. 3]

October, 2011

In the month of October, 2011 a downward trend has been observed in commodity markets. Further commodities bounced a little on last days of month. Metals: After making all time high of US $ 1,900 / toz gold slumped by almost 11 % later part of this month. Market observed a biggest drop of 30% in the prices of Silver. Energy: Oil, headed for a second straight month of decline, was also buoyed by tighter U.S. stockpiles, as investors speculated U.S. fuel demand will increase on signs the economy of the worlds biggest crude user is expanding faster than estimated.

SUGAR
Pakistan: Pakistan is expecting a bumper crop of up to 4.5 million tonnes from the 2011/12 crop despite losses to the sugarcane crop by floods in the countrys south. Traders and officials said last month there was no need to import sugar. Despite this Pakistan is going to import 100,000 tons of sweetener well ahead of the Muslim fasting month of Ramazan, expected in the last week of July 2012. In the month of September prices slumped by 5 % in local markets. Sugar opened at Rs 7,170 /100kg where it slides to Rs. 6,800 on last trading day of month. Global: A steep decline has also been witnessed in international prices. So for near month sugar futures prices slumped by 15% over the month of September, 2011 on LIFFE. Year to date prices drooped by 24%.

A very strong correlation is observed in between local and LIFFE futures prices in the month of September.

7,300 7,200 7,100 7,000 6,900 6,800 6,700 12-Sep 15-Sep 20-Sep 23-Sep 28-Sep 1-Sep 7-Sep
Sugar - Karachi Rs/100kg [LHS] LIFFE Near Month Future US $/ton [RHS]

740 720 700 680 660 640 620 600

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COTTON
Pakistan: The country will expectedly achieve a bumper lint crop in 201112 season, provided all fundamental and weather conditions remain favorable. Fortnight cotton arrival on October 1, 2012 stood at 2.8 million bales, which is 181,455 bales more than same period last year, Pakistan Cotton Ginners Association said. Prices pushed up by 7 % in the month of September where as year to date slides downward by 30.5 %. Prices open at Rs. 6,000 / mound on first day of trading and closed at Rs. 6,400 /mound on last day Global: After attempting to move higher early in September, cotton prices retreated in the middle of the month. The strengthening of the dollar that accompanied the recent increase in market volatility may have contributed to the downward move by cotton and other commodity prices. Prices slides downward by almost 7 % over the curse of September, where as year to date it already slides by 31%. The latest USDA report, which featured a 2.9 million bale increase to world ending stocks in 2011/12, could be expected to put additional downward pressure on prices. Octobers increase to the world ending stocks figure is the result of an 896,000 bale upward revision to 2010/11 ending stocks (equivalently, a 896,000 bale increase to 2011/12 beginning stocks), a 1.2 million bale increase to the 2011/12 world production projection, and a 844,000 bale decrease in world consumption expectations.
7,500 7,300 7,100 6,900 6,700 6,500 6,300 6,100 5,900 5,700 5,500 6-Sep 115 113 111 109 107 105 103 101 99 97 95 22-Sep 27-Sep 30-Sep
25-Sep 29-Sep

KCA Spot Rs. /37.324 kg [LHS] ICE Near Month Futures Cents / lb [RHS] 14-Sep 19-Sep 9-Sep

RICE [IRRI6]:
Rice: IRRI6 prices were remained in a narrow band of Rs. 3,525 & 3,775 /100 kg. On 1st of September market opened at Rs, 3,700 where it closed at Rs. 3,600. A 2.7 % decline over the month so for
3,800 3,750 3,700 3,650 3,600 3,550 3,500 13-Sep 17-Sep 21-Sep 1-Sep 5-Sep 9-Sep IRRI6 Rs /100 k g

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Production Consumption / Trade Ending Stocks [August] The 2011/12 global rice production forecast was raised by 2.1 million tons this month to 458.4 million tons (milled basis).Global disappearance in 2011/12 is projected at a record 456.0 million tons, up 0.8 million tons from last months forecast and still more than 7 million tons larger than 2010/11. Global ending stocks for 2011/12 are projected at 98.7 million tons, up 0.7 million tons from last month and 2 percent larger than a year earlier. Global trade for 2011 was raised by 455,000 tons this month to a record 33.2million tons.

WHEAT:
Wheat remained in between Rs. 2275 & 2,480 / 100 kg. A 6.50 % increased in prices has been witnessed in the month of September, where as a fall of 4.90 % observed over the period of year to dat. Production Consumption / Trade Ending Stocks [August] World wheat production in 2011/12 is forecast at 678.1 million tons. Foreign wheat consumption for 2011/12 is forecast up 2.0 million tons this month to 642.5 million. World wheat supplies for 2011/12 are projected up this month by 7.6 million tons to a new record of 871.5 million, more than 20 million tons higher than the previous year. The world wheat trade estimate for 2010/11 (JulyJune) is increased slightly this month by 0.4 million tons, to 131.7 million. World wheat ending stocks for 2011/12 are projected to reach 194.6 million tons, up 5.7 million this month, 1.3 million higher than in 2010/11.

2,500 2,450 2,400 2,350 2,300 2,250 11-Sep 14-Sep 17-Sep 20-Sep 23-Sep

Wheat Rs. /100 kg

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MAIZE:
An upward trend has been observed in maize prices over the month of September. Overall a 6.45 % rise in prices is being observed so for in the month of September, 2011. Prices opened at Rs 1,938 /100 kg on first week of trading and closed at Rs. 2,063 /100 kg. So far prices slumped by 14.5 % year to date. Production / Trade [August] World coarse grain production in 2011/12 is projected at 1,131.2 million tons, down 5.1 million this month. U.S. corn production in 2011/12 is forecast at 12.5 billion bushels, down 417 million from last month and only 50 million bushels above 2010/11, despite a 4.6percent increase in planted area. World corn trade forecast for 2010/11 was adjusted down 0.3 million tons to 91.7 million tons

2,300 2,200 2,100 2,000 1,900 11-Sep 14-Sep 17-Sep 20-Sep 23-Sep

Maize Rs /100 kg

26-Sep

PALEMOLEIN:
Prices slumped in the month of September by 8 % in both domestic & International markets where as 25% decline has been witnessed in International markets so far. A very strong correlation exists in domestic & International markets. Domestic prices are collected from Jodia bazaar Karachi.

3,200 3,150 3,100 3,050 3,000 2,950 2,900 12-Sep 19-Sep 22-Sep 27-Sep 2-Sep 7-Sep
US $/Ton Palm Olein Rs. / 37.324

29-Sep
5,300 5,200 5,100 5,000 4,900 4,800 4,700

8-Sep

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GOLD
Gold rallied to a lifetime high around $1,920.20 an ounce in early September after the euro fell against the dollar on growing doubts about Europe's ability to solve its debt crisis. Prices slumped below $ 1,650 week ended on 30th of September. Gold Prices fluctuated between $ 1611.2 1920.2 per ounce in the whole month of September, 2011.

1950 1850 1750 1650 1550 13-Sep 17-Sep 21-Sep

Gold US $ /t Oz

25-Sep

SILVER
The price of silver has plummeted. In a similar fashion to the early May 2011 silver selloff, this recent selloff has taken more than $10 off the price of silver in less than a month. Thats more than 30.01%. Max price was $ 43.27 an ounce on 2nd of September and min price was $ 29.10 on last trading day of September.

45 42 39 36 33 30 27 13-Sep 17-Sep 21-Sep

Silver US $/t Oz

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CRUDE OIL
Oil rose, paring the steepest quarterly drop since 2008, as investors speculated U.S. fuel demand will increase on signs the economy of the worlds biggest crude user is expanding faster than estimated Crude Oil price fell from $ 88.73 at the start of month and declined further to $ 78.59 dollar a barrel at the end of this month, before it bounced back by 4.7 % on Thursday. Following an initial rebound in broader markets after Germany's lower house approved new powers for the euro zone's crisis fund and U.S. economic data beat expectations.

92 89 86 83 80 77 13-Sep 17-Sep

Crude Oil US $/barrel

21-Sep

25-Sep

EXCHANGE RATE
Rupee touched the highest ever figure of 90 / US$ during the month of September. Over all 1.80 % depreciation was observed during the month.

91 90 89 88 87 86 13-Sep 17-Sep

Exchange Rate

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