Oil and LNG prices have fallen but coffee prices jump sharply: a monthly review of Papua New Guinea’s commodity and financial markets

Oil and LNG prices have shown weakness but coffee is up. Business Advantage PNG’s monthly review of Papua New Guinea’s commodity and financial markets.

The coffee price over one year. Source: macrotrends.com

The LNG price is 6.7 per cent lower for the month, according to Kina Securities. This represents a fall of 5.1 per cent for the year.

Oil prices are also down. According to Kina, West Texas Intermediate is off by 7.7 per cent for the month and is down 11.9 per cent for the year.

According to Oil Price, the recent fall is due to easing tensions over America’s sanctions on Iran.

‘Prices have fallen but are likely to move even lower over the next few months.

‘The stand out with agricultural commodities was coffee.’

‘The panic attack was caused largely by President Donald Trump’s August 7 announcement that sanctions would be re-imposed on Iran.

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‘Anxiety about the effect on oil supply and prices was reasonable but the reaction was hysterical.’

Coffee

The stand-out with agricultural commodities was coffee, which was up 16.8 per cent for the month. This surge is recovering recent losses, however. Over the year, the price is down 5.2 per cent.

Cocoa continues to be strong. It is up 9.4 per cent for the month and 19 per cent for the year, according to Kina.

Palm oil was weaker, falling 3.4 per cent for the month. It is down by 16.3 per cent over the year.

‘Copper continued to weaken.’

Metals prices were steady. Gold was up by 3.3 per cent over the month, but is down 5.6 per cent from its level a year ago.

The silver price fell by 0.1 per cent but is down 14.3 per cent over the year.

Copper continued to weaken. It was down by 2.3 per cent over the month and is 17 per cent lower than this time last year.

Equities

The stock market did little. The KSI Home Index (PNG-listed stocks only) fell by 0.4 per cent in the month, according to Kina, but is up 5.1 per cent for the year.

‘The kina was mixed against the major currencies.’

The KSI Index (which includes dual listed stocks) had a monthly fall of 1.3 per cent and is down 0.7 per cent over the year.

The Australian All Ordinaries Index fell sharply by 8.9 per cent over the month and is down by 6.6 per cent over the year. America’s S&P 500 performed similarly, with a monthly fall of 8.8 per cent.

The kina was mixed against the major currencies. Over the month it was down by 0.3 per cent against the US dollar, but up by 2.3 per cent against the Australian dollar.

Half-year Treasury Bills are trading at 4.73 per cent, while full-year Bills are trading at 8.04 per cent. Three-year inscribed stock has an interest yield of 9.54 per cent.

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