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June 2008

Commodity crash

By Raman Jokhakar, Tarunkumar Singhal, Chartered Accountants
Reading Time 1 mins
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24 Commodity crash


The sudden price crash in global commodities markets last
week, after they had peaked at all-time highs at the start of the month, took
most observers by surprise. The shock value was all the more because it was the
steepest weekly drop in 50 years, exceeding by a substantial measure the
previous record weekly slump of 9.2%, way back in December 1980. That drop had
been triggered chiefly by a 20% hike in interest rates by US banks on
instructions from the Federal Reserve, which wanted to tame rampant inflation.
The present cave-in is also remarkable in that it has cut across the gold, crude
oil, metals and agro commodities markets, including corn, wheat and vegetable
oils.

(Source : Business Standard, 25-3-2008)

 

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