October 13, 2008
Global financial crisis affects grain market purchase tenders
The global financial crisis may reduce the number of purchase tenders in the global grains market in coming weeks as buyers hope for more commodity price falls, according to traders and analysts.
One trader said buyers are observing that grain and other commodity prices are being pulled down by the financial crisis and seem to be waiting to see how far prices will fall before tendering. By delaying a few days, it could mean hundreds of thousands of dollars saved in the current market.
Andrei Sizov Sr., chief executive officer of Russian agricultural analysts SovEcon, said he does notthink that with the end of Ramadan, importers from Islamic states will boost their activity.
A major increase in tender activity in the international grains market had been expected this week following the end of the Ramadan fasting period in Islamic countries, among the main grain importers.
They will probably be buying relatively small volumes of grain on the falling market at market prices and will not be building stocks. The developing liquidity crisis will be an additional impetus for such a policy.