Soft commodity prices under pressure

30 July 1997

Soft commodity prices under pressure

SOFT commodity prices are under pressure despite tightening fundamentals in markets such as grains and sugar.

The Economist Intelligence Unit (EIU) projects that its soft commodity index will fall by 5.5% this year. This rate of decline would ease in the next two years.

The EIU says growth in Chinas domestic sugar production and its use of artificial sweeteners could hit sugar imports – perhaps down 20 % in 1996-1997.

It forecasts world wheat trade to increase by 4m tonnes to 95m tonnes in 1997-1998, but much will depend on Chinas requirement.