POINTERS: Edible Oils & Oilseeds, Globalised Commodities Coverage

By: Ali Muhammad Lakdawala

Ali Muhammad Lakdawala : Procurement in charge for Edible Oils & Fats at India’s premier FMCG conglomerate, ITC Ltd, India.

Prior to joining ITC Ltd, he worked as a Senior Commodity Research Analyst and Trader at Anand Rathi Commodities Ltd, India the only analyst given the opportunity to operate with three different commodity verticals (Energy Market, Edible Oil & Oilseeds and Spices). Previous work experience also includes as Research Analyst with renowned organization, Unit Trust of India (UTI) Commodities.

This culminated in numerous international report publications, being quoted in various business press (Bloomberg, Dowjones, Reuters, Economic Times, Platts, etc), and invited as a Guest Speaker for Commodity Markets & Commodity Risk Management at various National & International Conferences and a Visiting lecturer at Mumbai University India.

An invited Member of : - Solvent Extractors Association of India (SEA of India) - Imported Vegetable Oil Processors Council - Indian Vegetable oil Producers Association (IVPA) - Steering Committee

Paper presented at various national & international forum on Commodities that specialises "looking beyond fundamentals for price direction”.

Education - A Commerce Graduate with Masters in Management Studies (Specialization in Finance: Rank Holder in Economics) from Mumbai University (India) and Diploma holder in Supply Chain Management - from the Confederation of Indian Industry (CII).

VIEW PROFILE

Financial Globalisation is the in thing these days which includes financial instrument market and commodities market. The term globalisation means cross-border trade in real goods and services, in turn it has led to development of emerging economies and ever increasing appetite of developed economies.

So is financial globalisation good???

It sure sounds like finance is great but it‘s proven that a growing financial system is great for a while – until it isn‘t. For instance by encouraging borrowing, the financial system encourages an excessive amount of residential construction in some locations. The results – vacant car garages – do not suggest a more effectual use of capital. Financial development can create brittleness. When credit extension goes in reverse gear, or even if it just stops, it can induce economic instability and crises. Bankruptcies, credit crunches, bank failures and depressed spending are now the all too familiar landmarks of the bust that follows a credit-induced boom.

EU gets flu (financial crisis) global economies go running for doctor’s prescription (IMF).

So does it mean that financial globalisation is bad???

Financial globalisation might only be good up to a point. It is about making it extraneous to investors and borrowers where the services and the funds they draw on are actually located. But the spillovers during the financial crisis, when one country‘s troubles spread to others, raise the question: does it matter where the funds are coming from? That is, how should we ponder about cross-border flows and financial specialisation? Policy makers (economist) are trained to think that speculation is great. Wherein, if one exploits comparative advantage it benefits everyone. With this debate we start the paper on "Edible Oils & Oilseeds - Globalised Commodities Coverage".

The basic purpose of the paper is to review how commodity markets gets impacted by global news and data flow besides its own fundamentals as they are not localised anymore. It starts with reviewing health of global economy and its outlook going forward. Influence of global growth on key commodities and its linkages, followed by a review of Edible Oils & Oilseeds, its correlated complexities and the way forward. Finally it‘s been concluded by price outlook (highs & lows) for 2013 CPO, Soybean, Soy oil and Brent Crude.

Please login to post Question & Answer;

Questions & Answers (6) :

Ali Muhammad Lakdawala

11 years ago

Dear Mr.Irfan, you welcome

Ali Muhammad Lakdawala

11 years ago

Thanks Sufyan for your comments

Irfan

11 years ago

Thanks for sharing an economic side linking edible oil and oilseeds segments

Sufyan

11 years ago

An insightful paper on commodities linkage with economic growth.The way forward for analysing the demand,supply and price forecast

Ali Muhammad Lakdawala

11 years ago

Well cobweb cycle in the paper has taken into consideration producers' expectations about prices and are umed to be based on observations of previous prices. Biodiesel does impact the avaliability of edible oil for food consumption. Edible oils are easily susutable in turn does influence each others price movement (CPO,SBO, etc)However, there has been shift as more used oil is used as bio-diesel replacing virgin edible oil. In turn avaliability of edible oil for foods consumption is less impacted.

Aarti

11 years ago

. It is an interesting and informative paper. Many thanks for sharing it. I had a few questions. a). your paper discusses the Cobweb cycle- although this is pertinent- it neglects to take into account the enlements and access to productive resources farmers need to have grow oilseeds. What are your thoughts on the sustainability of the palm crop in countries such as Malaysia and Indonesia- when we know that a substantial percentage growing oil palm are small farmers and face issues of climate change. b). To what extent does biodiesel demand impact the availability of the crop? Is there quanative evidence suggesting a significant price increase of SBO/CPO/RPO etc?