Search Results for: commodities

Hot Commodities, The Valentine’s Day Edition

Spend Matters welcomes a guest post from Abigail Green, at Mintec. William Shakespeare once wrote, “If music be the food of love, play on,” linking food and love forever. It’s no surprise then that on Valentine’s Day, edibles such as chocolates, sweets and even wine are traditional gifts. Therefore it’s worth looking at these commodities, along with that old romantic standby of roses, as they are purchased in vast quantities on February 14th—all in the name of love. Valentine’s Day is big business, and every year in the US over 35 million heart-shaped boxes of chocolate are sold, along with […]

2013 Commodity Forecasting: Cost and Supply Management Intersections

Last week, Spend Matters featured a recap of metals-focused commodity management strategies for 2012 (here and here), including offering a forward look into what companies should be considering and forecasting for 2013. Yet what should we make of general commodity management and related trends going into next year? A recent Bloomberg summary captures a number of salient concepts we should take under careful consideration as we plan our overall commodity management strategies going into next year. For one, it's important to keep in mind that "investors almost doubled purchases of commodities" in 2013. While there are various schools of thought […]

The Most Volatile Commodity of 2012: Copper

We don't make this pronouncement lightly. Nor do we do so in a truly scientific manner. Yet according to our sister site, MetalMiner, copper takes the metals cake as the most volatile commodity of 2012. As MetalMiner observes, "Copper earns the dubious distinction of 'most volatile metal' for 2012. And this comes as no surprise. MetalMiner's monthly Copper MMI® registered a value of 97 in January, on par with December's value ... the copper price has ended 2012 at nearly the same place where it started, despite double-digit volatility based on the supply/demand fundamentals and too much copper stock given […]

2012 Commodity Review: Maize, Oil, Sugar, Coffee, Dairy, Plastic, and Coal

Spend Matters welcomes a guest post from James Hutchings, at Mintec Ltd. Whilst the European economy appears to be successfully resisting any and all efforts at recovery, the US has had more promising signs with a continuing rise in consumer confidence and an improvement in the US labor market. China has continued to power global growth, and has for the most part completed its once-every-10-years handover of power to the next generation of political leaders. Below we summarize how 2012 shaped up for several different areas, world-wide. Global maize and wheat prices are up significantly over the past 12 months […]

Commodity Update: The Phenomenal Growth of Quinoa

Spend Matters welcomes a guest post from Robert Miles, at Mintec Ltd. Consumers often seem to be on the hunt for new wonder foods and one example that has seen phenomenal growth in demand in the West over the last few years is quinoa. Quinoa, (pronounced keen-wah), is a grain-like crop primarily grown for its edible seed. The so-called "golden grain of the Incas" is a pseudo-cereal rather than a true cereal, or grain, as it is not a member of the grass family. This makes it a potential alternative for people who cannot easily tolerate the gluten in grains […]

Peanuts: A Snapshot of World Commodity Markets and Pricing in a Nutshell

Spend Matters welcomes a guest post from Nick Peksa, at Mintec Ltd. US peanut prices have fallen in recent months due to improved output from the US and Argentina. At 6.11bn lbs, the US crop is estimated to have been 67% larger than the 3.66bn lbs seen last year, in part because of an expansion in the planted area to a four-year high of 560,000 hectares. On 14th October 2012, 48% of the US crop was reported to have been harvested, with 77% in good to excellent condition, compared to only 40% in the previous year. Argentina is expected to […]

Commodity Caffeine Fix: Wake Up and Smell the Coffee

Spend Matters welcomes a guest post from Robert Miles, at Mintec Ltd. World coffee prices may start to receive additional price support later this year amidst buoyant demand for coffee from export markets and emerging countries such as Brazil, whose accelerating economic growth has helped to make premium-blend coffee drinks more affordable among its rising middle class. There are two main varieties of coffee: Arabica (about 60% of world coffee production) and Robusta (40%). Coffee plants begin producing fruit after three to four years. They need another three years, however, to reach full fruit production. When the fruit of the […]

Commodity Price Management at BorgWarner [Plus+]

In a Supply Chain Management Review article I penned last year, I talked about some research I had done regarding the integration (or lack thereof) of input cost planning and forecasting to the business plan (including the impact on profit). The figure below shows that 39% of procurement organizations perceive that they do a decent job at mitigating price inflation, but less than a third have an integrated cross-functional process for doing so, and only a fourth of firms use centers of excellence, specialized analytics, and third-party services to help them anticipate future input costs.

The Silk Road: Are People Seeking Luxury Goods Again?

Spend Matters welcomes a guest post from Robert Miles, at Mintec Ltd. Silk was once one of the world's most important commodities, traded largely across Asia to Europe by a variety of tortuous land routes known commonly as the Silk Road. It is a natural protein fibre obtained mainly from the cocoons of the larvae of the mulberry silkworm, reared in captivity in a process known as sericulture. It now represents a tiny fraction, less than 0.2% by volume, of the global textile fibre market, but its trading value is well in excess of this. Raw silk currently trades at […]

The More Toppings, The Batter: Pancake Ingredients

Spend Matters welcomes a guest post from Sam Parry of Mintec. First an article covering chicken wings and the Super Bowl and then one on pre-ordering for Valentine’s Day, so now to cover an event that fell between the two. February 12, 2013 marked the day for pancake lovers across the globe to run down to the stores and buy ingredients that they may only use once or twice a year. The standard American pancake recipe involves; plain flour, eggs, milk, baking powder and sugar.  The classic pancake batter can have many interesting twists; whilst thick, fluffy pancakes are a […]

Commodity Price Management at BorgWarner Part 1: The Tip of the Iceberg in Supply Analytics

BorgWarner gave a terrific presentation at this year’s ISM annual conference regarding Commodity Price Risk Management that I thought I'd share.  Borg Warner is a global Tier 1 automotive firm (60 locations in 19 countries) that buys 80,000 metric tons of commodities globally, including Steel, Copper, Resin, Aluminum, Powdered Metals, etc. The presentation could have just as easily been called “profit risk mitigation”.  The homegrown system (called 'commodity engine') they developed out of their Morse TEC division allowed them to help mitigate commodity price risk by linking commodity purchase price forecasts and resultant contracts to the final assemblies sold to […]

The Butterfly Effect (And How It Relates to Commodities)

Time and again we find a strong relationship between seemingly entirely unconnected commodities. However, often as we begin to delve deeper into the relationship between those commodities, the connection becomes apparent. For example, historically, there has been a very strong correlation between crude oil and edible oil prices. This relationship was in existence long before the introduction of biofuels and, therefore, is not solely due to the recent substitutability for fuel.

The Sting in Honey Prices

Spend Matters welcomes another guest post from Abigail Green of Mintec. US honey prices have been rising steadily and significantly over the past couple of years, up 4% year-on-year and 50% higher compared to 2008 prices. Declining US production has resulted in supplies becoming increasingly scarce, and for the 2013 season US demand for imports is expected to reach its highest level ever.   The rise in honey prices stems from the drastic decline in bee populations in 2006. This reduction in bee numbers was later called colony collapse disorder, and it has affected the health of bee colonies ever […]

Ethanol vs. Corn: Weathering Hot Conditions

Spend Matters welcomes a guest post from Nick Peksa, at Mintec Ltd. On the December 3, 2012, the New York Mercantile Exchange, Inc. (NYMEX or Exchange) delisted 59 energy products. There was no open interest in these contracts. One of these was the New York Harbor Ethanol Futures - New York Harbor is a key hub for the import, storage and distribution of ethanol on the East Coast. So this reflects a physical market for delivery on a 36-month forward-rolling contract. "The biofuel industry was pleased that Congress in the hard-fought fiscal cliff legislation approved several measures to support biofuels. […]

US and Chinese Comparative PVC Price

Spend Matters welcomes a guest post from Mark Kozlowski, at Mintec Ltd. The prices of PVC from the US and China usually track each other fairly closely, but they diverged significantly during 2012. Prices in the US rose in the second half of 2012 as a limitation in domestic supply due to plant closures coupled with an increase in domestic demand as the US housing market improved and Hurricane Sandy led to an increase in PVC demand for reconstruction. PVC prices in China were kept stable by a low level of domestic demand and a high level of production overcapacity. […]

Sugar Cost Management: Prices Falling Steadily

Spend Matters welcomes a guest post from James Hutchings, at Mintec Ltd. Despite the rise in use of corn syrup over the last 40 years, sugar remains the world's most commonly used sweetener. It is produced from sugar beet and sugar cane, with beet grown in temperate climates like those found in large parts of the US and EU, whilst cane is grown in tropical climates, including Florida and Hawaii (but predominately Brazil, India and Thailand). World sugar prices have fallen steadily since the last spike in prices seen in summer 2011. World production in 2012/13 has been revised down […]

Rubber: Both Natural and Synthetic Prices Falling

Spend Matters welcomes a guest post from James Hutchings, at Mintec Ltd. Back in July, we specifically looked at rubber used for tire manufacture, but let's take a more general look at the rubber marketplace. The world's rubber is sourced from two very different origins. 40-45% is still produced naturally (in the form of latex from the sap of the rubber tree), mostly from Southeast Asia, but the majority is now produced from crude oil derivatives such as styrene and butadiene. Tires, as mentioned in our earlier post, are the primary use for both natural (80%) and synthetic (55%) rubber. […]

Gelatin: Rising Prices; Growing Asian/South American Demand

Spend Matters welcomes a guest post from James Hutchings, at Mintec Ltd. Gelatin, when mixed with water, provides texture and thickens as it forms a gel around five-to-ten times its original weight. It's mostly produced as a by-product from the meat and leather industries, as it is derived from collagen, a protein manufactured from pig skins, cattle hide and bones. A small proportion is also obtained from the skin of deep water fish such as cod, haddock and pollock; this is partly for religious reasons. Annual production is currently slightly more than 0.33m tonnes and is projected to grow at […]

Rare (Or Not So Rare?) Earths

Spend Matters welcomes a guest post from Vajid Idrees, at Mintec Ltd. Have you ever wondered how energy saving light bulbs shine, the permanent magnetics in consumer electronics attract and repel or how catalysts, catalyse? Well I haven't either, but I know that without rare earth metals the chances are that these applications products would not work as well as they do. Rare earth metals (REMs) are a group of 17 elements, consisting of the 15 lanthanides (lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium and lutetium) plus scandium and yttrium. The name suggests […]

Mustard Seed: Even Hotter This Year?

Spend Matters welcomes a guest post from Robert Miles, at Mintec Ltd. Mustard is a plant native to the temperate regions of Europe and, well known to the ancient Romans and Greeks, one of the world's first domesticated crops. It was also one of the first species actually introduced into North America by Europeans. Three types of mustard are typically grown today: yellow (Sinapis alba), brown (Brassica juncea), and oriental (Brassica juncea). Around 700 million pounds of mustard is consumed worldwide each year. Canada is the world's largest producer of mustard seeds, with about a third of the world's current […]