Readings: Pawar’s wheat trade, World’s #1 gold producer, Goldminers’ hedges
. . . at the end of this marketing year, the world will be left with the smallest stocks in 26 years. That’s sobering.
In the midst of this scrum, India is standing coolly aloof. Instead of price escalation, we are actually witnessing a stable (if not declining) wheat price scenario. This week, wheat dara prices dipped below the benchmark Rs 10-per-kg mark for the first time since July. Local roller flour mills appear in no rush to buy. In short, the market is calm.
How did we manage it? The good harvest and timely government imports can share the credit 60:40.
India bought wheat from its farmers at a record $200/tonne. It also managed to buy wheat from the world market in the nick of time. The icing is that we are not dependent at all on foreign ships for food. In a year of extreme market volatility, that is an achievement any food minister would be proud to have on his CV.
- Bullion Desk: Fortis Metals Monthly (September 2007 edition)
This year the unthinkable might happen South Africa could cease to be the world’s number one gold producer, possibly losing that top slot to China, as South Africa’s depleting resources and deep mines prove increasingly too expensive to operate.
Latin America is increasingly in the spotlight as potentially the place where the world’s next big gold ore body might be discovered, and the world’s biggest gold producers are beating a path to the continent.
Gold miners are spending billions of dollars to unwind gold hedges taken out at prices well below today’s heady levels of $700 an ounce and more, underscoring the risks in trying to predict bullion prices.
. . . 300 tonnes worth of hedges were lifted in the first half of 2007, led by the world’s four top producers, with a further 80 tonnes to come in the second half. That’s more than all the gold mined in Australia — the world’s No.3 producer — in fiscal 2007
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