Commodities & Futures: Cocoa is our cup of tea in the tips for '93

FULL of new year optimism, we look at Commodities Most Likely to Succeed in 1993, after a dull year in which prices were generally depressed.

But a word of warning: commodities trading is risky and is not for the faint-hearted or thinly capitalised. Consult your stockbroker, your banker and anyone you share your bank account with before investing.

The soft commodities - cocoa, coffee and sugar - could provide some interest and cocoa is our best bet. Talks on a new international agreement to support prices through a withholding scheme enter the final stage next month.

Regardless of their success, cocoa consumption will be greater than production this year. Lawrence Eagles of GNI Research says output has hit a plateau while demand is rising by 2 1/2 to 3 per cent a year. 'In 1994/95 there will be an even bigger deficit, and what are now large stocks could be drawn down quickly.'

Cocoa averaged 50 cents a pound in 1992, and could rise 10 per cent in 1993.

Tea was the exciting dark horse of 1992. A 10 per cent drop in world tea production, buoyant demand especially from Russia, and the fall in the value of the pound after Black Wednesday, caused a price advance of around 26 per cent in 1992. The Economist Intelligence Unit forecasts that tea prices could rise another 22 per cent to 165p/kg this year.

Coffee prices are worth watching, but could disappoint after an unexpected jump at the end of 1992. Estimates for lower production in Brazil, the world's largest producer, boosted the price of arabica coffee by December to around 60 cents, 30 per cent above the year's low. Analysts say there is a 50-50 chance of an international coffee accord being agreed, which could help prices too.

Of the industrial metals, we like nickel for '93. It has fallen the furthest of the major base metals - 10-15 per cent in 1992 - amid large stocks and sluggish demand, and looks to have the most potential for recovery this year.

Graham Roberts, director of mining research for Carr Kitcat and Aitken, sees nickel rising to dollars 2.90 a lb from around dollars 2.67. But large inventories still overhang the market and uneven economic recovery in the industrial world might restrain the upturn.

Tin is a long shot, but it could perform well. One of the most unfashionable metals since the collapse of the tin market in 1985, tin supplies are now below production levels and are likely to stay in deficit because many mines have closed.

Stephen Briggs, of Metals and Minerals Research Services, says: 'It doesn't take much to move a market like this because it is very thin. Tin is one of the better bets for 1993.'

Tin prices rose nearly 10 per cent in 1992, to an average dollars 2.75 a lb, and could climb above dollars 3.50.

Among precious metals, platinum is our favourite. Used for industrial and jewellery purposes, and with increasing demand in the autocatalyst market as clean air laws tighten up around the world, platinum is best positioned to rise this year. After averaging dollars 360 an ounce in 1992, it could reach dollars 380 or dollars 390 and extend its premium to gold to dollars 40.

Rubber also gets our vote. It has been helped by sterling devaluation and a positive shift in supply and demand, including from tyre producers. The EIU forecasts average prices of 66p/kg this year, after 54p last.

Commodities unlikely to be in the ascent in 1993 include wheat, maize and oilseeds. Bill de Maria, senior economist with the International Wheat Council, says: 'Though we don't make price predictions, it's unlikely that prices should rise significantly in the year ahead. There is a lot of grain around and not a lot of money in developing countries to buy it.'

Last but not least, gold is unlikely to shine this year after a disappointing 1992.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Mortgage Advisor - OTE £95,000

£40000 - £95000 per annum: Recruitment Genius: This is an exciting opportunity...

SThree: Trainee Recruitment Consultant

competitive: SThree: Are you passionate about sales?Do you have a keen interes...

Recruitment Genius: Loan Adviser - OTE £30,000

£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Day In a Page

Isis in Syria: Influential tribal leaders hold secret talks with Western powers and Gulf states over possibility of mobilising against militants

Tribal gathering

Influential clans in Syria have held secret talks with Western powers and Gulf states over the possibility of mobilising against Isis. But they are determined not to be pitted against each other
Gaza, a year on from Operation Protective Edge: A growing population and a compromised and depleted aquifer leaves water in scarce supply for Palestinians

Gaza, a year on from Operation Protective Edge

A growing population and a compromised and depleted aquifer leaves water in scarce supply for Palestinians
Dozens of politicians, bureaucrats and businessmen linked to Indian bribery scandal die mysteriously

Illnesses, car crashes and suicides

Dozens of politicians, bureaucrats and businessmen linked to Indian bribery scandal die mysteriously
Srebrenica 20 years after the genocide: Why the survivors need closure

Bosnia's genocide, 20 years on

No-one is admitting where the bodies are buried - literally and metaphorically
How Comic-Con can make or break a movie: From Batman vs Superman to Star Wars: Episode VII

Power of the geek Gods

Each year at Comic-Con in San Diego, Hollywood bosses nervously present blockbusters to the hallowed crowd. It can make or break a movie
What do strawberries and cream have to do with tennis?

Perfect match

What do strawberries and cream have to do with tennis?
10 best trays

Get carried away with 10 best trays

Serve with ceremony on a tray chic carrier
Wimbledon 2015: Team Murray firing on all cylinders for SW19 title assault

Team Murray firing on all cylinders for title assault

Coaches Amélie Mauresmo and Jonas Bjorkman aiming to make Scot Wimbledon champion again
Wimbledon 2015: Nick Bollettieri - Vasek Pospisil must ignore tiredness and tell himself: I'm in the quarter-final, baby!

Nick Bollettieri's Wimbledon Files

Vasek Pospisil must ignore tiredness and tell himself: I'm in the quarter-final, baby!
Ashes 2015: Angus Fraser's top 10 moments from previous series'

Angus Fraser's top 10 Ashes moments

He played in five series against Australia and covered more as a newspaper correspondent. From Waugh to Warne and Hick to Headley, here are his highlights
Greece debt crisis: EU 'family' needs to forgive rather than punish an impoverished state

EU 'family' needs to forgive rather than punish an impoverished state

An outbreak of malaria in Greece four years ago helps us understand the crisis, says Robert Fisk
Gaza, a year on from Operation Protective Edge: The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas

Gaza, a year on from Operation Protective Edge

The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas
How to survive electrical storms: What are the chances of being hit by lightning?

Heavy weather

What are the chances of being hit by lightning?
World Bodypainting Festival 2015: Bizarre and brilliant photos celebrate 'the body as art'

World Bodypainting Festival 2015

Bizarre and brilliant photos celebrate 'the body as art'
alt-j: A private jet, a Mercury Prize and Latitude headliners

Don't call us nerds

Craig Mclean meets alt-j - the math-folk act who are flying high