Earlier this year, I had the good fortune to meet Nick Peksa, a Director at UK-based Mintec, a firm that provides an all-you-can-eat software/content platform with detailed commodity forecast data across a smorgasbord of categories. After some emails, a trip to a Sox game on one of his follow-up visits to Chicago and a number of discussions, we decided that it would benefit both organizations to feature Mintec's insights on Spend Matters. Each week, we'll plan to cover updates and trends on a number of commodities courtesy of Mintec, including some you're probably not overly familiar with (and certainly some that don't trade on public exchanges like the LME or CME). We'll also feature relevant charts with trending data with explanation and opinion behind what is driving changes in specific markets. And from time to time, we'll explore in-depth specific commodity areas, featuring Nick's insights about broader changes.
We're thrilled to have Mintec as a new, regular contributor. I hope you find their contributions a welcome addition to Spend Matters. In Mintec's first contribution today, we explore market trends for butadiene, raisins, guar gum, coffee and butter (in the European market). Today's data is dated by just over a week or so, but in the future, it will be up to date. Take it away, Nick...
The prices of butadiene has surged since the start of the year by around $2100/MT or just over 100%. Structural changes in US butadiene production process from cracking naphtha to ethane gas meant that more butadiene had to be imported to cover shortages. Large volumes of imports have come into the US from Asia as strong demand for butadiene continues.
In recent weeks raisins from California have rocked up. Demand for fresh grapes from the wine industry in California is strong, creating fewer grapes destined for raisin production.
India is currently the only supplier to the world market. This rise in global demand coupled with tighter supplies this year. Strong pricing has also been seen a number of other competing gums. 180% increase since the start of the year.
Coffee prices are at a 6-month low as a result of higher availability as well as an expected reduced demand. This is a time of year the market tends to be weak as it is the time of the Brazilian harvest. The next few months will tell whether the coffee stocks can be replenished, if they are not expect the price to rebound.
Butter (W Eur)
The price of butter in Western Europe has risen by 9% year-on-year (in terms of EUR) and is up by 113% since the start of 2009. EU butter production in 2011 is expected to have difficulty covering EU demand as poor weather, CAP reform and high sales of cream, cheese and other dairy products has limited European milk supply. Increasing imports of butter to the continental EU are expected to be aided by the strong EUR.
Stay tuned for Mintec's next contribution, early next week. And please welcome Nick and his team to Spend Matters.
Jason Busch (and Mintec)