Trading trends for 2011

Precious metals, such as Gold and Silver, saw big increases in value in 2010. While the same increases are unlikely in 2011, the value will still increase. It is said that in times of low interest rates one should invest in precious metals. However, currently people are rushing to pawnbrokers to SELL their Gold to pay mortgages or rent. While the fat cats at the head of banks around the world get bonuses, the great unwashed [that’s the rest of us] are struggling day to day. We already see demonstrations across the world aimed at austerity measures

The price of Crude Oil is on the rise. However this has less to do with an upturn in demand and more to do with speculation.  The rumor is that oil will reach USD100 a barrel and speculators are getting into the market and artificially making this happen. We doubt that it will reach the 'hundred' mark, at least in the first half of the year, but continued speculation makes it a lottery post-June.

Trading in 2011 - the Siam Trading crystal ball!

2011 is as yet unwritten but is shaping up as a red letter year for Siam Trading (part of the Sutlet Group).

Urea N46, either Prilled or Granular, will be a big part of the effort in 2011. With conditions shaping as better,  next year farmers will be looking for fertilisers to improve crops. We will be supplying Urea, as we did in 2010, at fair prices. Primarily, we sell Russian or Ukrainian Urea as this appears to be preferred to Urea from China or Indonesia.

We will continue with consumer goods, such as sugar, wheat, rice and cooking oil. We see sugar and wheat prices falling, perhaps as early as Q2. Rice will probably remain relatively high, particularly Thai rice as large areas of the North-East suffered floods in November/December and that will affect the harvest. We will supply rice from Vietnam and Pakistan to buyers looking for a cheaper alternative.

Petroleum will again play a large role for our business in 2011. While we will be happy to talk to agents and resellers we will be actively encouraging end-buyers to talk to us. We intend to set up as a Seller’s Mandate in 2011 which will mean that we can get things done smoother and quicker. By dealing directly with the end buyer we cut out the delays, and can get things done.

But we are not going to sit back and take it easy. In 2010 we had some enquiries about Gold, Silver and Diamonds. But it soon became apparent that these markets were even less reliable that Petroleum. So in 2011 we will be looking for real sellers who can supply in a professional manner. 

For buyers who are nervous, or have been victims of rip-offs before, we aim to be an honest broker. Watch for our details of these deals in the next month or so.

So enjoy the New Year break, however long that is. Don’t forget Russia closes for a full week but we will still be open and ready to deal.

Written by Haydn Leseberg, Trade Manager, Sutlet Group

Edited by Stuart Blott, General Manager, Sutlet Group

Trading summary for 2010

2010 posed a number of challenges for the on-line marketing  and trading business.

Petroleum continued to be robust. It also attracted so-called “agents” who saw it as a way for making easy money while having little or no knowledge of the industry. Coupled with shysters and time wasters it proved a mine-field for genuine buyers and sellers alike. Another problem were re-sellers who decided commissions were not enough and tried to be buyer and seller at the same time.

The sugar harvest failed in early 2010, particularly in Pakistan. This caused the sugar price to spiral upwards, sometimes on a weekly basis. Brazil was able to supply sugar but many buyers were shocked at the prices being quoted. It is expected that in 2011 the price will begin to drop as a better harvest is expected around the world.

Wheat was another product which suffered from poor harvests. Russia actually banned the export of wheat to protect the local market. So not only was the price high, but supplies were also hard to find.

The wheat shortage created pressure on rice supplies. While rice was relatively plentiful the market didn’t miss the opportunity and prices rose to very high levels. Even Vietnam was asking prices far higher than normal as people chased a wheat alternative.

So that was 2010. Food shortages and high prices being par for the course... what will 2011 have in store for us. 

Contact Sutlet Group for more information on trends and activities in the global trading world, we specialise in facilitating agreements for petroleum, iron ore, wheat, rice, sugar, chemicals and coal. Learn more at our website.

Posted by Haydn Leseberg, Trading Manager, Sutlet Group
Edited by Stuart Blott, General Manager, Sutlet Group

Beware, it’s in the detail.

The internet has made it easy for legitimate companies to buy and sell petroleum. The problem is that it has also made it easy for illegitimate companies to operate. It has gotten to the point where buyers and sellers are wary of anyone who deals in petroleum products.

However it is possible to find real sellers, if one is prepared to look. But, as the heading warns, the traps are in the detail. Always be on the guard because the illegitimate buyers and sellers out there have more tricks up their sleeve than a circus magician. Here are some tips to stay ahead of them.

1.      When you get the SCO check the procedures. Be on the lookout for requests for fees/charges in addition to the actual cost of the product. Commonly this will be fees for contract registration or transfer of title. These should be included in the cost of the product already and is a good sign that this deal is one to be avoided.

2.      When you receive the FCO check the wording against the SCO. Many buyers will assume the wording to be the same. Often this has been changed in small but important way and they will also set a tight turnaround time for a buyer to return the FCO, giving a buyer less time to check.

3.      When you get the Draft Contract again check the wording, and not just the main parts. These documents are often 10-12 pages long and it isn’t hard to slip something in hoping that the buyer will not check every page. Of course you have to sign every page so if you don’t check you have no-one to blame but yourself.

4.      Finally check the Final Contract before you sign it. Until you have established a relationship with the seller, including the completion of a successful transaction, be alert.  

Written by Haydn Leseberg, Trade Manager, Sutlet Group.

Sutlet Group provides professional trading services via our contacts of buyers and sellers all over the world.

Contact us for pricing on coal, petroleum, rice, urea, chemicals, iron ore and sugar.

Wheat – the grain drain

In 2009-2010 the harvest in Russia was so short of expectations that the government banned exports to protect the internal market. This lead to shortages in the market, high prices and a move to other grains like rice. This, in turn, lead to higher prices for rice too.

Figures that are available for 2010-2011 show continued shortfall in the current harvest which means a continuation of lower output in both Russia and the Ukraine. This has been caused, for the most part, by an unusually hot summer and a continuation of the drought. It is rather ironic that Pakistan will also have shortages, but that their shortages are caused by floods.

Additionally, while the wheat harvest yield is below expectation there is also real pressure on rice. Most of the north and north-east of Thailand is underwater and the floods in Pakistan put its own rice production in danger. 

Written by Haydn Leseberg, Trade Manager, Sutlet Group

Thai govt agrees to export 50,000 tons of rice to Indonesia

The Commerce Ministry has agreed to sell 50,000 tons of rice at low price to Indonesia, which has been facing both the volcanic and tsunami disasters.

The rice will be sold at a very low price through a Government-to-Government (G2G) agreement. The Thai Commerce Ministry has not selected a private company to handle the task so far, as the agreement has yet to be signed.

Meanwhile, the Fiscal Policy Office Director Naris Chaiyasut said the Office had been assigned to thoroughly study the agricultural insurance program, which was scheduled to be implemented next year to insure losses against drought.

From http://www.siamdailynews.com

The rice market

At the moment the supply of rice is a problem. But just how much is caused by poor crops and how much is caused by government interference with the supply?

We know that the latest harvest in Pakistan was 40% down on previous harvests. This caused a real problem as Pakistan not only consumes rice domestically but earns valuable export dollars. Add to this the poor wheat harvest and a sugar shortage and that weighs heavily on their GDP as well.

The wheat harvest was so bad in Russia that they stopped exporting. This had the effect of causing shortages in importing countries and they then turned to rice as a substitute. This also effected rice stocks. But a check of stocks in the local market here in Thailand show that stocks are plentiful even as the price climbs,

But we shouldn’t get too excited because right now huge areas of land used primarily for rice growing are currently underwater from unprecedented floods in the north and north-east of Thailand. It may well be that those reserves, which were seen as a government manipulation of the market, will come in handy when domestic production falls. In a country where rice is a staple any shortage of rice would be a total disaster.

Written by Haydn Leseberg, Trade Manager, Sutlet Group