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COMMODITY NEWSBRIEFS: 11 DECEMBER 2015

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Natasha.Havenga@transnet.net

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FAST MOVING CONSUMER GOODS BER EXPECTS INFLATION TO RISE TO 6.2% (Engineering News, 11/12/2015) The Bureau for Economic Research’s (BER’s) fourth-quarter Inflation Expectations Survey revealed that average inflation could increase by 0.1 percentage points to 6.2% in 2016, based on the expectations of analysts, business people and trade union officials. The average inflation expectation for 2017 was also 6.2% in the fourth quarter. Analysts and business persons had revised their forecasts slightly upwards to 5.6% and 6.6% respectively. In contrast, trade unions raised their forecast by a noticeable 0.4 percentage points to 6.3%. Although household inflation expectations rose from 6.7% to 6.9% in the fourth quarter, it remained below the 7.1% recorded in the second quarter. Respondents retained their expectation of 1.5% economic growth during the year, and slightly lowered their forecast for 2016 from 1.7% to 1.6%. On average, the survey respondents still expected salaries and wages to increase by 7.1% during 2015 and 2016. “The deterioration in inflation expectations for both 2016 and 2017 is unlikely to sit well with the South African Reserve Bank, which maintains that it remains committed to anchoring inflation expectations which it deems “uncomfortably high”. “The sharply weaker moves in the rand over the last 24 hours in the wake of the Finance Ministry ‘shake-up’ is likely to make matters worse and, in our view, increases the chances that the Reserve Bank opts to raise policy rates by a further 25 basis points come its January 28 Monetary Policy Committee meeting, versus our current baseline view that the bank would wait until March before raising rates again,” BNP Paribas Cadiz Securities economist Jeffrey Schultz said. BUMPER GRAPE EXPORTS OUT OF SA (FTW, 11/12/2015) South African grape growers have produced a bumper crop this year due to good climatic conditions. “For the first time we are expecting volumes of over 60 million cartons to be exported from South Africa,” said Basjan Bruwer, spokesperson for local producer, SA Freshgold. “The good climatic conditions are giving us good quality and excellent growth potential.” According to him, the first consignment left for Europe last month. The Red Globe and Dan ben Hannah varieties will be harvested later this year and early next year in Namibia, along with Sugarone and Thompsons varieties. The Northern Cape and Limpopo harvesting will begin soon. GRAIN WHITE CORN GAINS BY EXTENDED LIMITS AS RAND SLUMPS (Moneyweb, 11/12/2015) South Africa white-corn futures jumped by an extended limit in Johannesburg after the rand fell to a record low against the dollar, making imports of the grain more expensive and boosting the attractiveness of local varieties. White corn for delivery

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in July rose 3.2% to R3 860 ($256) a metric ton by midday on the South African Futures Exchange. Futures rose a fourth straight day, extending trading limits to R120 after the contract moved by the R80 limit in the previous two sessions. Yellow corn for delivery in March increased 1.3% to R3 419 a ton. The currency dropped to an all-time low of 15.3857 per dollar on Wednesday before paring losses in overnight trading after South African President Jacob Zuma fired Finance Minister Nhlanhla Nene and replaced him with a little-known lawmaker. “The dry conditions still have an impact on the maize prices, but today’s higher levels were mostly propelled by the weakening of the rand,” Wandile Sihlobo, an economist at the Grain SA farmers’ lobby, said by phone on Thursday. South Africa is the continent’s biggest corn producer and the El Nino weather pattern has caused dry conditions in the sub-Saharan region. The nation’s worst drought in 23 years hurt crops in the Free State and North West provinces, which accounted for almost two-thirds of corn output in 2014. White corn, which is consumed by humans as a staple food, has surged 80% this year, while the yellow variety, fed mainly to animals, climbed 58%. TRANSNET DEPUTY MINISTER LASHES OUT AT TNPA OVER DELAYS AT SALDANHA (FTW, 11/12/2015) Transnet National Ports Authority (TNPA) received a tongue-lashing from the Deputy Minister of Transport, Sindisiwe Chikunga, over lack of delivery on proposed developments at the Port of Saldanha Bay. She was speaking during an open imbizo of the maritime economic sector (oil and gas subsector), convened to evaluate reports on TNPA’s progress with plans for a Marine Transport and Manufacturing (MTM) lab – one of five targeted for prioritisation in the revitalisation of the country’s maritime economic sector as part of Operation Phakisa. In terms of the MTM lab recommendations, the port of Saldanha was approved by government for the establishment of a purpose-built oil and gas port infrastructure, with TNPA charged with facilitating the development, unlocking investment in new and existing port facilities around the country, and creating and implementing a public procurement and localisation programme. Port of Saldanha manager, Willem Roux, said the oil and gas infrastructure intended for development at the west coast port represented an investment of R10 billion, including a proposed Mossgas quay extension, a general maintenance quay, a new oil and gas repair berth as well as an extension of the current iron ore berth. However, tempers flared at times during the imbizo, according to a Samsa report, after it emerged that the facilities would most likely be ready for utilisation by 2019 rather than the scheduled 2017. This, according to Transnet, was due in part to the need for the relocation of manganese ore from both the port of Saldanha as well as the port of Port Elizabeth to the Ngqura deep water port. This would take three years through to 2019 to complete, the parastatal reported. Chikunga lashed out at TNPA, commenting: “The issue for me is that we do not respond quickly as South Africans, why is that? If you are saying we as the Department of Transport are appointing people who do not know what they are doing, then tell us, so that we can look into the issue!” CURRENCIES AND PRICES

JSE AS AT 17:10PM 10 DECEMBER 2015

All Share Index 10/12 48,985

- 539.03 - 1.09%

Industrials Index 10/12 39,297

- 1,976.39 - 4.79%

Financials Index 10/12 38,558

- 3,381.89 - 8.06%

Top 40 Index 10/12 44,251

- 294.79 - 0.66%

Industrial 25 Index 10/12 70,117

+ 740.69 + 1.07%

Financial 15 Index 10/12 14,242

- 1,358.60 - 8.71%

Resources 10 Index 10/12 25,183

+ 788.07 + 3.23%

Alt-X Index 10/12 1,540

+ 3.04 + 0.20%

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WORLD INDICATORS

FOREX

Rand/Dollar 06:30 15.4152

+ 0.52 + 3.48%

Rand/Pound

06:30 23.2690

+ 0.65 + 2.88%

Rand/Euro 06:30 16.8285

+ 0.40 + 2.44%

COMMODITIES

Gold (usd/oz) 06:30 1,067.40

- 6.10 - 0.57%

Platinum (usd/oz)

06:30 851.16

- 0.34 - 0.04%

Brent (usd/barrel) 06:30 39.50

- 0.61 - 1.52%

WORLD MARKETS

Wall St (DJIA) 10/12 17,575

+ 82.45 + 0.47%

Germany (DAX)

10/12 10,599

- 74.67 - 0.70%

Japan (Nikkei) 06:30 19,231

+ 183.96 + 0.97%

3 month

(Business Report, 11/12/2015)

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(TFR Commercial Management: Business Performance Dept)

Petrol/ Diesel Price

YR2015

07-Jan-

15

04-Feb-

15

04-Mar-

15

01-Apr-

15

06-May-

15

03-Jun-

15

01-Jul-

15

05-Aug-

15

02-Sep-

15

07-Oct-

15

04-Nov-

15

02-Dec-

15

COASTAL

95 LRP (c/l) 1083.00 990.00 1086.00 1246.00 1246.00 1293.00 1334.00 1283.00 1214.00 1218.00 1196.00

95 ULP (c/l) 1083.00 990.00 1086.00 1246.00 1246.00 1293.00 1334.00 1283.00 1214.00 1218.00 1196.00

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Diesel 0.05% (c/l) 997.49 895.49 969.49 1090.09 1085.09 1134.09 1138.09 1062.27 1008.27 1061.27 1052.27

Diesel 0.005% (c/l) 1001.89 899.89 973.89 1096.49 1091.49 1137.49 1141.49 1067.67 1016.67 1067.67 1057.67

Illuminating Paraffin (c/l) 697.728 595.728 668.728 690.828 685.828 727.828 733.828 663.828 608.828 658.828 656.828

Liquefied Petroleum Gas

(c/kg) 1829.00 1679.00 1833.00 1918.00 1935.00 2035.00 2091.00 2002.00 1887.00 1898.00 1851.00

GAUTENG

93 LRP (c/l) 1102.00 1009.00 1105.00 1261.00 1261.00 1308.00 1352.00 1301.00 1232.00 1230.00 1208.00

93 ULP (c/l) 1102.00 1009.00 1105.00 1261.00 1261.00 1308.00 1352.00 1301.00 1232.00 1230.00 1208.00

95 ULP (c/l) 1124.00 1031.00 1127.00 1289.00 1289.00 1336.00 1377.00 1326.00 1257.00 1261.00 1239.00

Diesel 0.05% (c/l) 1028.09 926.09 1000.09 1122.79 1117.79 1166.79 1170.79 1094.97 1040.97 1093.97 1084.97

Diesel 0.005% (c/l) 1032.49 930.49 1004.49 1129.19 1124.19 1170.19 1174.19 1100.37 1049.37 1100.37 1090.37

Illuminating Paraffin (c/l) 747.928 645.928 718.928 743.828 738.828 780.828 786.828 716.828 661.828 711.828 709.828

Liquefied Petroleum Gas

(c/kg) 2011.00 1861.00 2015.00 2100.00 2117.00 2217.00 2273.00 2184.00 2069.00 2080.00 2033.00

YR2014

01-Jan-

14

05-Feb-

14

05-Mar-

14

02-Apr-

14

07-May-

14

04-Jun-

14

02-Jul-

14

06-Aug-

14

03-Sep-

14

01-Oct-

14

05-Nov-

14

03-Dec-

14

COASTAL

95 LRP (c/l) 1320.00 1359.00 1395.00 1398.00 1383.00 1361.00 1392.00 1392.00 1325.00 1320.00 1275.00 1206.00

95 ULP (c/l) 1320.00 1359.00 1395.00 1398.00 1383.00 1361.00 1392.00 1392.00 1325.00 1320.00 1275.00 1206.00

Diesel 0.05% (c/l) 1260.55 1284.75 1311.95 1299.15 1269.37 1245.79 1259.79 1254.17 1228.79 1215.79 1154.79 1101.49

Diesel 0.005% (c/l) 1263.95 1288.15 1316.35 1304.55 1274.77 1249.19 1263.19 1258.57 1234.19 1221.19 1161.19 1106.89

Illuminating Paraffin (c/l) 963.828 975.828 991.828 953.028 934.028 924.028 947.028 940.028 921.028 907.028 855.028 805.728

Liquefied Petroleum Gas

(c/kg) 2260.00 2314.00 2372.00 2350.00 2346.00 2319.00 2377.00 2365.00 2257.00 2269.00 2164.00 2039.00

GAUTENG

93 LRP (c/l) 1336.00 1375.00 1411.00 1416.00 1401.00 1379.00 1408.00 1408.00 1341.00 1343.00 1298.00 1229.00

93 ULP (c/l) 1336.00 1375.00 1411.00 1416.00 1401.00 1379.00 1408.00 1408.00 1341.00 1343.00 1298.00 1229.00

95 ULP (c/l) 1357.00 1396.00 1432.00 1439.00 1424.00 1402.00 1433.00 1433.00 1366.00 1361.00 1316.00 1247.00

Diesel 0.05% (c/l) 1287.15 1311.35 1338.55 1329.75 1299.97 1276.39 1290.39 1284.77 1259.39 1246.39 1185.39 1132.09

Diesel 0.005% (c/l) 1290.55 1314.75 1342.95 1335.15 1305.37 1279.79 1293.79 1289.17 1264.79 1251.79 1191.79 1137.49

Illuminating Paraffin (c/l) 1009.728 1021.728 1037.728 1003.228 984.228 974.228 997.228 990.228 971.228 957.228 905.228 855.928

Liquefied Petroleum Gas

(c/kg) 2442.00 2496.00 2554.00 2532.00 2528.00 2501.00 2559.00 2547.00 2439.00 2451.00 2346.00 2221.00

(SAPIA online)

Daily prices for 10 December 2015

LME Official Prices, US$ per tonne

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Contract Aluminium Alloy Aluminium Copper Lead Nickel Tin Zinc NASAAC

Cash Buyer 1550.00 1478.00 4571.00 1683.50 8525.00 14425.00 1501.50 1710.00

Cash Seller & Settlement 1555.00 1479.00 4572.00 1684.00 8530.00 14450.00 1502.00 1720.00

3-months Buyer 1560.00 1481.00 4569.00 1689.00 8550.00 14405.00 1519.00 1720.00

3-months Seller 1570.00 1481.50 4570.00 1690.00 8560.00 14410.00 1520.00 1725.00

Dec 1 Buyer 1560.00 1513.00 4560.00 1703.00 8605.00 1548.00 1760.00

Dec 1 Seller 1570.00 1518.00 4570.00 1708.00 8705.00 1553.00 1770.00

15-months Buyer 14315.00

15-months Seller 14365.00

Dec 2 Buyer 1558.00 4570.00 1728.00 8690.00 1575.00

Dec 2 Seller 1563.00 4580.00 1733.00 8790.00 1580.00

Dec 3 Buyer 1615.00 4570.00 1753.00 8770.00 1593.00

Dec 3 Seller 1620.00 4580.00 1758.00 8870.00 1598.00

(London Metal Exchange, 11/12/2015)

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