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Commodity Experts Worried About the Coronavirus

Commodity experts at the International Sweetener Colloquium say announcements on the spread of the coronavirus and the falling stock market are making them nervous about the future. 

The director of dairy market intelligence for High Ground Dairy says fear is gripping the entire supply chain. 

While dairy prices have risen recently after multiple bad years, the coronavirus could pull dairy prices lower. 

That means price forecasting in any agricultural sector is extremely difficult. 

Stephen Nicholson is a senior analyst for Rabo AgriFinance, who says, “We have to be ready for more volatility as we see trade disrupted. We’re going to see economic activity contract and there may be a little more downside than we’d thought.” 

He’s not in the same camp as those who are sure that the Chinese will fulfill their promises to buy $40 billion to $50 billion in agricultural products. 

Nicholson says commodity prices are low, which means China will have to buy a lot of products to spend that much money. 

The Hagstrom Report quotes Nicholson as saying the Trump Administration will have to make a “tough decision on whether to punish China if they don’t live up to their promises.”

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