Oil prices recover and coffee and cocoa up: a monthly review of Papua New Guinea’s commodity and financial markets

Oil prices have recovered and coffee and cocoa are strong. Business Advantage PNG’s monthly review of Papua New Guinea commodity and financial markets.

Crude oil prices over five years. Source: MacroTrends

According to Kina Securities, the oil price has recovered strongly over the month. West Texas Intermediate rose by 10.8 per cent over the month after falling 13.2 per cent in the previous month. The light crude oil price is still down by 12.3 per cent over the year, however.

Reports that China will reduce its consumption are likely to keep a lid on prices. China’s oil demand dropped by 0.3 per cent in April 2017, with gasoline demand slumping 6.3 per cent, the first drop since September last year.

‘Precious metals prices have moved sideways.’

The LNG price has remained unchanged over the month, but it is down 18.6 per cent over the year.

Precious metals

Precious metals prices have moved sideways. Gold is US$1242 an ounce, which is down 0.3 per cent per cent for the month. But it is up 7.8 per cent over the year, according to Kina.

‘The cocoa price rose sharply.’

The silver price was down 0.8 per cent over the month, although it is up 1.9 per cent for the year.

Copper continued to be strong. It was up 3.7 per cent over the month and has risen 8.2 per cent over the year. Good news for Ok Tedi.

Agriculture

Cocoa prices over the last three months. Source: Markets Insider

Agriculture prices were mixed. The palm oil price fell 0.3 per cent for the month, according to Kina. It has fallen 19.8 per cent over the year.

The cocoa price rose sharply, however. It was up 7.2 per cent over the month, although it is 8.6 per cent lower than the same time last year.

Coffee prices were also much stronger. They were up by 9.9 per cent over the month and are 11 per cent lower over the year.

Equities

The stock market was slightly stronger. The KSI Home Index (PNG-listed stocks only) fell by 0.9 per cent over the month but it is up 5 per cent for the year, reports Kina. The KSI Index (which includes dual-listed stocks as well) rose 2.3 per cent in the month and is up 3.7 per cent for the year.

‘The Kina continued to fall against the Australian dollar.’

The Australian All Ordinaries Index rose slightly. It was up by 1.3 per cent over the month and has risen just 1.1 per cent over the year. America’s S&P 500 was up 1.6 per cent in the month and has risen 10.5 per cent over the year.

The Kina was steady against the US dollar but continued to fall against the Australian dollar. It was down 4.7 per cent against the Australian dollar in the last month and has fallen by 9 per cent over the last year. It has fallen by 4 per cent against the yen over the last year.

Half-year Treasury Bills are 4.74 per cent, while full-year Bills are 7.96 per cent. Inscribed stock for 2020-2018 has an interest yield of 9.41 per cent.

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