US Retailers Paying Premium To Place Big Bets On Holiday Sales

Economic

Summary:

Shift in logistics forces importers to move shipments earlier in the year and drives up freight rates in the process.

US retailers are shrugging off a tripling of spot freight prices, rushing to ship holiday goods earlier than expected as they bet that robust consumer demand will offset higher shipping costs.

Attacks on ships in the Red Sea have forced carriers to take longer transit routes, injecting unpredictability into global supply chains that has increased port congestion from Asia to the US east coast.

The latest disruptions to supply chains have strained container capacity and revived fears of empty shelves that retailers confronted during the coronavirus pandemic.

To circumvent delays and get ahead of rising freight costs, retailers have brought their peak shipping season forward, moving goods for the December holidays as early as April and May instead of the July to October increases that were typical before the pandemic.

The combination of supply chain disruptions and strong shipping demand has caused the composite spot rate to surge more than 200 per cent since November 2023, according to the World Container Index from Drewry Supply Chain Advisors. Carriers including Maersk have warned that freight rates may rise further.

US Retailers Paying Premium To Place Big Bets On Holiday Sales_1

“While it makes sense at an individual level, any herd behaviour can overwhelm the liner network and create a vicious cycle whereby extra demand causes more congestion, leading to higher rates,” added Simon Heaney, a senior container shipping manager at Drewry.

Big importers such as Walmart and Target have locked in multiyear contracts with carriers below spot market prices, but smaller shippers and freight forwarders are disproportionately affected by market volatility and must pay higher prices to receive goods earlier.

The fixed rates that smaller players negotiated last year for the 2024 season “never really saw the light of day” because of the Red Sea crisis, according to Michael Short, president of global forwarding at logistics group CH Robinson. “If you’re comparing the increase to those rates, you’re looking at a 75 to 100 per cent increase.”

“Clearly, it’s a better problem to have to overpay and have the shelves full for the holidays, a cost that may be passed fully or partially to the consumers, than to having to explain to the shareholders the empty shelves and lost sales,” explained marine shipping expert Basil Karatzas. “Playing probabilities, the former is a scenario with better odds, which of course has a disproportionate impact on smaller shippers and companies.”

However, optimism about consumer spending has helped drive cargo owners’ decisions to ship earlier despite current market conditions.

Retailers were “surprised how healthy the demand is”, said Marcus Reimann, head of sea logistics for global freight forwarder Kuehne+Nagel. “We heard from a couple of customers that they didn’t expect to ship as much volume as they’re shipping right now.”

The National Retail Federation expects US imports to rise to their highest levels in two years this summer, following a 12 per cent decrease in 2023 that brought volumes close to pre-pandemic levels. American port cargo volumes increased by 13 per cent year over year in April, according to the NRF’s Global Port Tracker.

The forecasts suggest the drastic changes to consumer spending patterns seen in recent years continue to reshape retail. Disruptions to supply chains early in the pandemic prompted consumers to start holiday shopping earlier, and more recent inflationary pressures fuelled the trend of spreading out purchases over a longer period of time leading up to the peak shopping season.

“We are buying earlier,” said Daniel Hackett of trade logistics firm Hackett Associates, which produces the Global Port Tracker with the NRF. “We’re seeing retailers have to account for that and bring cargo in earlier.”

The NRF projects retail sales to grow 2.5-3.5 per cent this year, slightly below the 2023 rate. Total US retail sales in May were up 2.3 per cent year on year, according to the US Census Bureau.

“Consumers are continuing to spend more than last year, and retailers are stocking up to meet demand,” said NRF supply chain vice-president Jonathan Gold in a June press release. “The high level of imports expected over the next several months is an encouraging sign that retailers are confident in strong sales throughout the remainder of the year.”

Source:Financial Times

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Warren Takunda

Economic

Forex

The central bank won't alter interest rates but it could be a significant event for the NZ Dollar as Adrian Orr and his team will address the potential for an interest rate cut later in the year.

The July decision comes days after a much-watched survey of Kiwi businesses revealed a further deterioration in conditions, prompting economists to say the central bank has little choice but to consider cutting interest rates.

The latest NZIER Quarterly Survey of Business Opinion showed high interest rates continued to weigh on confidence, and one local bank said the economy is enduring recessionary conditions again.

Following the survey, Auckland Savings Bank brought forward its forecast for when the RBNZ will cut interest rates.

"We have changed our OCR outlook – we expect the RBNZ to cut the OCR from November this year," says Nick Tuffley, Chief Economist at ASB. "Households are starting to buckle more noticeably under the various pressures of high interest rates and high (though easing) living cost inflation."

The NZD can come under further pressure against GBP if the RBNZ points toward a rate cut later in the year. To be sure, it will be coy and won't be generous in raising hopes of a cut.

But any nod to easier monetary conditions later in the year can trigger NZD weakness.

The result would be a further lift to the GBP/NZD exchange rate which is looking increasingly constructive. Pound Sterling has some wind in its sails, rising even as the odds of an August interest rate cut increase, suggesting that some sentiment adjustment is underway following last week's election.

"The pound could be about to stage a bigger recovery as it has momentum on its side now that the UK’s political risk premium has been eradicated," says Kathleen Brooks, an analyst at XTB. "Interestingly, the pound is rising, alongside expectations of a rate cut from the Bank of England next month, there is currently a 66% chance of a rate cut priced in by the OIS market."

The convincing win by Labour in last week's election sets the UK up for a period of political stability, with Labour saying it is already moving to establish closer ties with Europe. Analysts have written that closer EU ties can support the Pound in the coming months as the long-standing Brexit premium the Pound still carries fades.

“We have raised our GBP forecasts in part on better political stability ahead and in part on the signs of a stronger rebound in economic growth than we previously expected," says Derek Halpenny, head of FX research at MUFG Bank Ltd. Pound to New Zealand Dollar Week Ahead Forecast: Setup Increasingly Constructive_1

Pound to New Zealand Dollar Week Ahead Forecast: Setup Increasingly Constructive_1

GBP/NZD has broken above its key moving averages and immediate support is at 2.0845, which is the 100-day moving average. While above here, gains to the 2.10 level can occur in the coming one to two weeks.

Bear in mind that the NZD can find some support and frustrate GBP/NZD upside on Thursday if U.S. inflation numbers undershoot expectations and boost investor sentiment.

This is because a soft reading will raise the odds of an interest rate cut at the Federal Reserve in September. However, an above-consensus reading would risk a setback to AUD, allowing GBP/NZD to test multi-week highs.

Headline CPI is expected to decline to 3.1% year-on-year, down from 3.3% in May, a level last seen in January. The core inflation print is expected to be at 0.2% month-on-month.

Such readings would signal the disinflation process is underway again, having been disrupted by the price acceleration in H1. This will raise the odds that the Federal Reserve will cut interest rates in September and potentially weigh on the Dollar.

The inflation report will follow Friday's labour market report, which confirmed a trend of cooling is underway, and this will continue to bring wage pressures down. Falling wages will ultimately result in easing domestic inflation.

"This week will be a hot one for US macro, with the CPI report for June out on Thursday," says Francesco Pesole, FX Strategist at ING Bank. "There is a clear weakening trend emerging in the US jobs market and that will, in our view, push an FOMC that wants to avoid unnecessary economic pain to cut three times this year, starting in September."

Source: Poundsterlinglive

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Alex

Economic

Political

Israel’s central bank is set to hold interest rates for a fourth consecutive time, a pause likely to stretch for several months amid fears that fighting against regional militant groups Hamas and Hezbollah could escalate.

Economists surveyed by Bloomberg are unanimous that the monetary committee will keep its benchmark at 4.5%, where it’s been since a quarter-point cut to start the year. Governor Amir Yaron will speak to reporters after the rate meeting.

Alongside its decision on Monday, the central bank will publish fresh economic forecasts and could revise an outlook from April that showed the key rate at 3.75% in the first quarter of 2025.

“We expect the Bank of Israel to err on the side of caution and not offer any more rate cuts this year,” said Barclays Plc economists including Zalina Alborova. “Even in a scenario of geopolitical improvement, inflation pressure is likely to prevent the bank from delivering a cut.”

Israeli Rate Cuts Are Off the Table as War Complicates Next Move_1

With Israel’s war against Hamas now in its 10th month, risks are growing of an all-out conflict with Iran-backed Hezbollah in Lebanon. While talks on a cease-fire deal in Gaza have resumed, Prime Minister Benjamin Netanyahu’s government is preparing for the possibility of a full-on war with Hezbollah militants in Lebanon.

How the security crisis develops will matter for the central bank, whose assessment since the beginning of the war in October has been that the conflict’s economic impact will gradually decrease as the year unfolds.

“If this assumption changes to a more severe scenario, that would probably wipe out the possibility of an interest rate cut,” said Ronen Menachem, chief markets economist at Bank Mizrahi Tefahot.

The turmoil is spilling over into markets, with the yield on the government’s 10-year shekel bonds reaching a 13-year high of 5.2% this month. The shekel is down close to 4% against the dollar since the start of March, one of the worst performers among a basket of 31 major currencies tracked by Bloomberg.

An escalation of hostilities across the northern border with Lebanon threatens further depreciation of the shekel, supply disruptions and a greater fiscal burden, all of which would intensify inflationary pressures.

Government spending has already soared because of the war. Israel is on track to run one of its widest budget deficits this century with a shortfall the government estimates will reach 6.6% of gross domestic product in 2024.

Israeli Rate Cuts Are Off the Table as War Complicates Next Move_2

“With the Bank of Israel’s cautious stance, we do not expect it to cut against the backdrop of recent shekel weakness, ongoing geopolitical uncertainty and a single positive inflation print that followed two upside surprises,” said Goldman Sachs Group Inc. economists led by Kevin Daly. “The uncertainty makes it difficult to be confident on the likely timing of the next cut.”

Annual price growth is now at 2.8% — within the official target range but on track to exceed its 3% upper limit. Bank Hapoalim sees inflation at 3.3% over the next 12 months and Leader Capital Markets expects it at up to 3.4%, depending on the shekel’s value against the dollar.

A longer wait for US interest rates to come down will likely delay the prospect of monetary easing in Israel, since a wider rate differential would threaten capital inflows and could undercut the local currency.

Federal Reserve officials at their last meeting dialed back their expectations for the number of cuts they see this year. The US central bank has held its key policy rate at the highest level in more than two decades since last July.

“These conditions do not allow for an interest rate reduction,” analysts at Bank Hapoalim’s financial division said in a report. “In a positive scenario assuming the cessation of hostilities, an interest rate cut will be back on the agenda toward the end of the year, but only after the US Fed commences loosening.”

Source:Bloomberg

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Alex

Economic

The German export industry is losing momentum as it enters the second half of the year. The latest figures from May have raised concerns among experts.

German exports have fallen as much as they have since December. Exports shrank by 3.6% in May compared to the previous month, reaching €131.6 billion, according to the Federal Statistical Office. Economists polled by Reuters had only expected a decline of 1.9%. Exports had even risen by 1.7% in April. Imports fell by 6.6% in May to €106.7 billion. Economists had predicted a decline of 1.0%.

The German export industry is losing momentum as shown in a recent survey by the Munich IFO Institute. Export expectations for June dropped to minus 1.0 points, from plus 0.2 points in May. "There is no clear direction at present," said Klaus Wohlrabe, head of the IFO surveys, recently. "The export industry still has room to grow."

May was a weak month for German trade overall. Imports also fell by 6.6% compared to the previous month. Economists had predicted a decline of 2.0%. From a yearly perspective, there was a decline of 8.7%.

To position Germany as a strong competitor in industry, exports, and innovation on the global stage, the Federation of German Industries (BDI) sees crucial leverage in public investments, bureaucracy reduction, corporate taxes, and the improvement of other framework conditions. According to the BDI, there will be a shortage of funds for investments and funding programs of around €400 billion over the next ten years. Therefore, the Association considers it acceptable to set up precisely earmarked and clearly defined special funds.

The economic situation of Germany, heavily influenced by its export industry, is causing concern due to the decline in German exports. The fall in German exports in May was significantly more than expected, reaching a level not seen since December. The German export industry's momentum is also reflected in the decreased export expectations for June, as indicated by the Munich IFO Institute's survey.

Source:ASB

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Warren Takunda

Cryptocurrency

Bitcoin enters the second week of July in a dangerous place with traders scared of further BTC price downside.

After its lowest weekly close in four months, Bitcoin is giving bulls nightmares as unrealized losses mount and with forecasts of more pain ahead.

Where will the market end up?

The trading community, already surprised at the extent of recent losses, is nonetheless primed for lower levels. Historically, the current drawdown is still small, leaving the path open for a trip toward — or even below — $50,000.

With such an unsavory situation in the back of their minds, longtime market participants are waiting to see how major players weather the storm.

In focus are various investor cohorts: both speculators and a portion of Bitcoin’s “diamond hands” are now underwater on their holdings.

At the root of the downtrend appears to be a combination of selling by the United States and German governments, as well as reimbursements of Bitcoin owed to creditors of defunct exchange Mt. Gox.

Sentiment underscores market sensitivity to these topics: the Crypto Fear and Greed Index is knocking on “extreme fear,” having dived 60% over the past month.

As uncertainty over how these forces will play out prevails, Cointelegraph takes a look at various opinions as to how BTC price strength might react.

Bitcoin: More downside “probable”

Bitcoin looked as if it might be back in action over the weekend as a $5,000 bounce from prior lows made traders hopeful.

Everything changed at the weekly close, however, with BTC/USD returning to $54,300, going on to trade around $2,000 higher on heightened volatility, per data from Cointelegraph Markets Pro and TradingView. BTC Price Risks 'Double Top' - 5 Things to Know in Bitcoin This Week _1

BTC Price Risks 'Double Top' - 5 Things to Know in Bitcoin This Week _1

BTC/USD 1-hour chart. Source: TradingView

“With Bitcoin closing its weekly below the May low, the strength on Friday makes we think more of a dead cat bounce and continuation lower over the next few weeks,” popular commentator Mark Cullen wrote in part of a gloomy response on X.

Research firm Santiment underscored the scope of the poor performance on both Bitcoin and altcoins.

“After a brief bounce to get trader hopes up, crypto has again shown retraces to bring fear back on the menus as the weekend comes to a close. Bitcoin is -2.3% in the past 24 hours, -8.6% in the past week, and -18.4% in the past month,” it summarized.

“Most altcoins have shown far larger dips.”

Crypto market cap (excluding top 10 tokens) 1-day chart. Source: TradingView

With that, per popular trader Tony “The Bull” Severino, it is time to brace for impact.

“Bitcoin closed below the lower Bollinger Band on the weekly,” he warned alongside a chart showing the Bollinger Bands volatility indicator.

“This is a sell signal. More downside is probable.”

BTC/USD chart with Bollinger Bands data. Source: Tony “The Bull” Severino

Fellow trader and commentator Matthew Hyland, known for his normally optimistic price perspectives, had similar news for X followers.

“BTC has confirmed a weekly breakdown out of the multi-month consolidation range,” he acknowledged.

“BTC still remains in an uptrend, it would need to go below $38k to end the uptrend so the uptrend is still fully intact however with this weekly breakdown it opens the doors for lower price targets.”

BTC/USD 1-week chart. Source: TradingView

Sub-$50,000 BTC price targets hinge on RSI

On the topic of where BTC/USD could put in a floor during the latest correction, traders diverge.

As Cointelegraph reported, $45,000 is emerging as one of the more popular assumptions based on drawdowns from previous highs

“The Weekly close for Bitcoin was ugly,” Keith Alan, co-founder of trading resource Material Indicators, wrote on the topic.

“There’s a lot of chatter on CT about the bottom being in, but I’m not seeing any validated confirmation of that yet. A retest of support could give us the confirmation we are looking for, but I’m not confident $53.5k will hold.”

Alan, along with Hyland, flagged the relative strength index (RSI) for signals that Bitcoin is truly “oversold” at current levels.

“I’m watching the Weekly RSI very closely,” he confirmed alongside a chart of one of Material Indicators’ proprietary trading tools showing potential bounce zones.

“If 42 on the Weekly RSI doesn’t hold, pack your bags for a trip to Bearadise.”

BTC/USD chart. Source: Keith Alan

Weekly RSI measured 45.6 at the time of writing on July 8, with Hyland seeing the probability of lower readings to come.

“The weekly RSI has nearly pulled back to the August/September lows of last year when BTC was trading at 25k,” he noted.

“Another red weekly candle would likely push the RSI lower which would then give opportunity for Bullish Divergence.”

BTC/USD chart with RSI data. Source: Matthew Hyland

Bringing up the ghost of 2021, meanwhile, veteran trader Peter Brandt entertained the idea that Bitcoin’s latest all-time high formed part of another “double top” formation.

While not confirmed, he forecast a target of $44,000 if BTC/USD continued to break down. BTC Price Risks 'Double Top' - 5 Things to Know in Bitcoin This Week _7

BTC Price Risks 'Double Top' - 5 Things to Know in Bitcoin This Week _7

Source: Peter Brandt

Bitcoin speculators in the red

While the last week has sparked its fair share of liquidations among overly enthusiastic traders both long and short BTC, others have no choice but to sit and wait.

An increasingly large swathe of the Bitcoin investor base is now underwater on its holdings.

Analyzing unrealized profit and loss, Axel Adler Jr., a contributor to onchain analytics platform CryptoQuant, suggested that this could be a ticking time bomb.

“There is mild panic in the market due to the small-scale sales of Mt.Gox/Govt coins, but no one is talking about the unrealized losses of STH whales, which currently equal 218K BTC. I have no idea what will happen to the market if they lose their nerve,” he warned on X.

An accompanying chart showed unrealized profit and loss for short-term holder whales (STHs) — largescale entities hodling a given unit of BTC for 155 days or less. BTC Price Risks 'Double Top' - 5 Things to Know in Bitcoin This Week _8

BTC Price Risks 'Double Top' - 5 Things to Know in Bitcoin This Week _8

Bitcoin STH whales profit and loss (screenshot). Source: CryptoQuant

On the topic of the broader STH base, now on aggregate in the red with its cost basis at around $64,000, fellow CryptoQuant contributor Mignolet offered a glimpse of hope.

The spent output profit ratio (SOPR) for the cohort, which monitors onchain transaction profitability, he noted, is now echoing behavior seen ten months ago.

“If the current cycle is still in a bullish phase and not a season out, short-term SOPR data indicates that the price is nearing the bottom. This pattern is very similar to the period in September last year,” he commented in one of CryptoQuant’s Quicktake blog posts. BTC Price Risks 'Double Top' - 5 Things to Know in Bitcoin This Week _9

BTC Price Risks 'Double Top' - 5 Things to Know in Bitcoin This Week _9

Bitcoin STH-SOPR (screenshot). Source: CryptoQuant

CPI, PPI and Fed’s Powell line up

As if Bitcoiners did not have enough on their minds this week, the coming days will see a fresh deluge of macroeconomic data to test the resolve of risk assets.

This comes in the form of US Consumer Price Index (CPI) and Producer Price Index (PPI) prints for June on July 11–12.

Inflation remains a hot topic when it comes to market sentiment, and adding to the mix is testimony to the US Senate by Jerome Powell, chair of the Federal Reserve.

The Fed’s next meeting to decide interest rate changes is in around three weeks, making the upcoming data key to assessing the overall climate.

“Buckle up for a busy week ahead,” trading resource The Kobeissi Letter forecast on X.

The latest estimates from CME Group’s FedWatch Tool nonetheless see hardly any chance of the Fed changing rates in July, with the odds at just 6.7%. BTC Price Risks 'Double Top' - 5 Things to Know in Bitcoin This Week _10

BTC Price Risks 'Double Top' - 5 Things to Know in Bitcoin This Week _10

Fed target rate probabilities for July meeting. Source: CME Group

As seen previously, unexpected macro data results have the ability to influence crypto market trends.

“We have to see how this week pans out with CPI data etc... but until otherwise I'm still betting lower to come,” commentator Cullen concluded.

Sentiment retraces bull market gains

The Crypto Fear and Greed Index is now back at the start of the Bitcoin bull market.

Despite BTC/USD being down 25% versus all-time highs from March, in that period, the classic sentiment gauge has gone from “extreme greed” to knock on “extreme fear.”

As of July 8, the Index measures just 28/100, having shed nearly 50 points in the past month to reach its lowest levels since early 2023.

The irony is plain for popular trader Moustache, however, one of the increasingly rare positive voices among the trading community.

Bitcoin is circling levels corresponding to its first high from 2021, and at that time, the sentiment was, conversely, sky-high.

“The Crypto Fear & Greed Index signals ‘Fear’ while $BTC retests its ATH from 2021. Just like in 2017...just like in 2020,” he noted in late June, drawing historical comparisons.

“I think there is hardly a more bullish sign than this.”

Crypto Fear and Greed Index (screenshot). Source: Alternative.me

Source: Cointelegraph

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Warren Takunda

Economic

Political

With doubts growing about whether President Joe Biden will remain a candidate for re-election in 2024, some investors are preparing to game out potential economic scenarios and trades if a stronger Democratic candidate emerges.

Bond yields rose following Biden's stumbling performance against Republican rival Donald Trump in the first presidential TV debate last month. Growing speculation that Trump would regain the White House on Nov. 5 pushed investors to anticipate higher fiscal deficits and inflationary policies.

Which party holds the White House could determine key issues on trade, regulations and fiscal policies. U.S. stocks rose over the past week partly as prospects for a Republican victory led some investors to expect lower taxes and less regulation.

Biden was emphatic about seeking re-election in an interview with ABC News on Friday . However, some Democrats are increasing calls for Biden to halt his campaign and a meeting of senators was being planned by one senator for Monday to discuss Biden's candidacy. The uncertainty could complicate economic forecasts and spur fluctuations in markets.

"For the stock market or bond market, if there's candidate change it's going to add uncertainty to the market," said Michael Schulman, partner and chief investment officer at Running Point Capital Advisors. "Investors have to prepare a strategy for what to do if Biden is no longer the candidate."

Vice President Kamala Harris is the leading contender to take Biden's place in the Nov. 5 election if he were to drop out, sources have said.

"Markets are going to have to figure out in real time what a new potential candidate stands for," including on issues such as tariffs and the potential expiration of tax cuts, said Michael Reynolds, vice president of investment strategy at Glenmede.

Some in the market expect Harris would not materially alter the Biden-Harris economic policy platform.

"I wouldn't see an appreciable policy differential," said Alex McGrath, Chief Investment Officer for NorthEnd Private Wealth.

Research firm Capital Economics said in a note on Friday that alternative candidates such as Harris or California Governor Gavin Newsom "would avoid making any major proposals and run on platforms that were very similar to Biden’s."

'FRAYED NERVES'

If Biden were to pull out, stocks could sell off over the short-term because of the uncertainty following such a decision, especially given equities broadly are at high valuations, said John Lynch, chief investment officer for Comerica Wealth Management. The S&P 500 was last trading at 21.4 times forward 12-month earnings estimates, versus its long-term average of 15.7, according to LSEG Datastream.

"Nerves can be frayed in an expensive market," Lynch said.

Stronger chances for the Democrats arising from the appointment of a new nominee could lead to a reversal of the Treasuries sell-off that followed the debate, which hit long-term bonds in particular, some bond investors said.

"If a new candidate comes in... maybe the election tightens up a little bit, which could lead to a divided government," said Jack McIntyre, a fixed-income portfolio manager at Brandywine. Congress is currently divided, with the House of Representatives narrowly controlled by Republicans and the Senate by Democrats. A divided government is often seen by investors as positive for markets as it reduces the chances of dramatic policy changes.

Government bond prices could benefit as this would reduce the chances of excessive fiscal stimulus in case of a Republican sweep, said McIntyre. Price gains could be capped, however, as an economic slowdown could play well for the Republican campaign over the next few months.

"It's a little too early to be making structural changes around the election, but we're in that window where it certainly gets more important in the investment decision-making and asset allocation decision," said McIntyre.

NO CERTAINTY FOR STOCKS

The S&P 500 had gained over 1% since the June 27 debate between Trump and Biden.

A greater chance of a Trump win in the wake of that debate could be a "contributing factor" to the rise in the benchmark stock index, said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

"I'm sure among some investors and prospective investors seeing a higher likelihood of a pro-business president or at least a more pro-business president ... has factored into decisions about putting money in the market," Tuz said.

Still, since 1945, the S&P 500 has posted an average annual return of 11.1% when a Democrat has been president versus a 7.1% return when a Republican has held the office, according to Sam Stovall, chief investment strategist at CFRA.

A second Trump presidency could mean lower corporate taxes, which could give a boost to U.S. equity markets, and tougher trade relations and could be a boon for domestic manufacturers, investors have said, although a weight on multinationals at risk if there are higher tariffs on Chinese goods.

Among specific areas of the market , expectations that Trump would seek to reduce regulations are seen as benefiting financials and small cap companies. Solar and other clean energy companies are expected to benefit more from a Democratic administration.

"It's very nuanced and uncertain," said Schulman. "Even if you predict the elections right, how stocks react could go either way," he said.

Source: Reuters

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Samantha Luan

Economic

Commodity

After securing record high procurement of wheat in India in 2021, Madhya Pradesh saw a 33% dip in 2024 as compared to 2023, the highest for any state in India, according to data provided by the state agricultural department. The sale of wheat also dipped by 10% across 175 open markets in the state.

In absolute terms, MP is the only state in India where procurement decreased from 7.1 million tonnes (MT) in 2023 to 4.8 MT in 2024 even though the production fell from 22.41 MT in 2023 to 21.21 MT in 2024.

In 2020-21, MP beat Punjab at state procurements, purchasing 12.5 MT of wheat. However, since then the government procurement from farmers has reduced, as private players buy wheat directly from farmers.

The latest data showed that compared to last year, the sale of wheat in 175 grain markets of MP was 5,00,000 tonnes less. In 2023, from March to June 30, 6.4 MT wheat had been sold and this year only 5.9 MT wheat has been sold, according to data provided by the Mandi Board that manages all grain markets in the state.

Farmers are getting ₹2,800 to ₹3,100 per quintal for the best quality Sharbati and Lokman wheat while the state government was giving a bonus of ₹125 per quintal on MSP of ₹2,275 per quintal. But farmers are expecting further increase in prices.

“The reason behind lesser sale of wheat at the procurement centres and mandis is the high price of wheat in the private market due to the ongoing Ukraine-Russia war. Lesser production of wheat is also a reason behind the fall in sales at markets and at the procurement centre. India, including MP, saw the hottest February and March, which are the ripening season of wheat, and untimely rainfall and hailstorm, affecting the production and quality,” said Paramjeet Singh, a farm activist.

Om Prakash Dhakad, a farmer who owns 13 acres of land in Baraha village of Raisen district, said, “The production of wheat has been decreased by five quintal per acre. I didn’t sell the produce to get better price from private buyers to compensate for the loss.”

“Farmers didn’t come to procurement centres and markets because of the high prices of wheat. Though there was a decrease in production, especially in Malwa region, it is not more than 5%,” said M Silvendran, secretary, MP farm welfare and agriculture department.

Experts believe that more than 50% of wheat of MP has either been hoarded by farmers or sold directly to wheat traders.

“Marginal and small farmers can’t afford to hoard the wheat for a long time as they need money to fulfill their needs. Last year too, the price was high but more than 65% wheat was sold to Mandis and at procurement centre till first week of July but this time only 40% wheat has been sold which clearly shows high dip in production due to poor weather,” said GS Chundawat, an agricultural expert, who was worked with agriculture science institutes in the state.