Death of Commodities?

Some people say that the Commodity business is dead. If you’re looking at the prices now, I believe you’re inclined to concur. It’s normal.

I have been the proponent of Commodity business. The prices may be go up and down, but the demand will always be there. I used to take long view on Commodities: the prices may go down, but in long term it is increasing. Think about this, with growing population and lusts (yeah, lusts!), do you think the demand for Commodities will tend to decline?

There’s an analysis in Reuters about Commodities. They said, the Death of Commodities are exaggerated. Couldn’t agree more.

To some the six-year bull run in commodities is definitely over, but depressed markets and deep cuts in output may yet set the stage for another bubble.

When that will be is uncertain given the crisis engulfing financial markets, but many investors take the view a significant recovery could be at least two years away.

“Bubbles have happened in the past and they will happen again,” said Ian Morley, a director at fund manager Quantum.

“It’s not just hot money, but actually mass self-delusion by people in the market, including the so-called experts.”

“The lower prices go and the longer they stay low, the bigger the next boom will be,” said Stephen Briggs, analyst at RBS Global Banking & Markets.

Analysts say when the global economy returns to trend growth — between 3.25 and 3.5 percent — the mismatch between demand and supply will once again dominate sentiment.

“Then you have the problem of finding five, six, seven million barrels a day of new oil from somewhere — a massive challenge,” Lewis said, adding that prices of agricultural products could be the first to start climbing.

“Supplies could be cut because farmers have no money, they can’t access capital or bank lending. They can cut the use of fertilizers and crop planting,” he said.

“All these things actually impact quite quickly.”

Click here to read full article.

If you have money, it’s time to invest in plantation and mining.

Or…wait few months ahead, you’ll see the selling spree of plantations and mining sites…:)

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1. Devi Girsang says:

   December 15, 2008 at 10:54 pm

   Too bad I’m not that rich. If I were billionaire, I’d splurge on stocks for sure. LOL.

   Reply
2. Irene says:

   December 16, 2008 at 5:56 pm

   well…one things for sure. whoever said the commodity business is dead obviously didn’t take Economy 101.

   Reply
3. boy says:

   December 17, 2008 at 11:41 am

   Devi: sama…
   Irene: agree

   Reply