It has been a bad month for most commodity prices, but not precious metals. The weakness in Liquefied Natural Gas (LNG) prices has continued, but volumes are strong. Business Advantage PNG’s monthly review of Papua New Guinea commodity and financial markets.

The Bloomberg Commodity Index over the last year Source: Bloomberg

According to Kina Securities, the LNG price has come off sharply over the last month, falling by 27.1 per cent. Over the year, it is down by 11.4 per cent.

Volumes in PNG, however, remain strong. According to Platts, Papua New Guinea’s PNG LNG project operated 20 per cent above nameplate capacity in the period from January to March 2017.

‘There is more than sufficient gas available to support this higher level production.’

‘The recent independent re-certification of the resources within the PNG LNG project fields has confirmed that there is more than sufficient gas available to support this higher level production and will enable the project to optimally place additional volumes,’ an Oil Search statement said.

Oil prices have also weakened, according to Kina Securities. West Texas Intermediate fell 3.4 per cent for the month and is down 7.6 per cent over the year.

Precious metals

Precious metals have risen, possibly reflecting heightened concern amongst investors. Gold is trading at US$1,289.10 an ounce, which is up 3 per cent per cent for the month and 11.9 per cent over the year.

‘Copper is slightly weaker.’

The silver price was also stronger. It was up 1.1 per cent over the month and is up 12.2 per cent for the year.

Copper is slightly weaker, however. It fell 3 per cent over the month but is up 1.8 per cent for the year.

Agriculture

Agriculture prices were weaker across the board. Especially affected was palm oil, which fell 7.8 per cent for the month and is down 17.1 per cent for the year.

Cocoa bean prices over the last year Source: Index Mundi

The cocoa price lost last month’s gains, falling 12.8 per cent over the month. The price is down by 12.6 per cent from the same time last year.

Coffee prices were also weaker. They were down by 5.6 per cent over the month and are 5.3 per cent lower than the same time last year.

Equities

Equities moved sideways. The KSI Home Index (PNG-listed stocks only) rose by 0.9 per cent over the month and is up 4.2 per cent for the year, reports Kina. The KSI Index (which includes dual-listed stocks as well) was up 1 per cent for the month and is up 15.1 per cent over the year.

‘The kina has mostly moved sideways.’

The Australian All Ordinaries Index performed similarly, rising by 1.5 per cent over the month, while America’s S&P 500 was up by 0.2 per cent.

The kina has mostly moved sideways. It fell by 0.4 per cent against the US dollar over the last month. It is down by 0.2 per cent against the greenback over the year.

Against the Australian dollar, the currency rose by 0.8 per cent in the month and it is up by 4.1 per cent over the year. It was weaker against the yen, falling by 1.8 per cent over the month; it is 6.3 per cent lower against the yen than the same time last year.

Half-year Treasury Bills are unchanged at 4.73 per cent, while full-year Bills are 7.82 per cent. Inscribed stock for 2018–2020 has an interest yield of 9.41 per cent.