20000206

Commodity prices in

Asia set to

rise as region

recovers

SINGAPORE: Prices of commodities,led by rubber, are set to surge in Asia in 2000, reversing contractions from a year ago on the back of stronger regional economic growth, the Economist Intelligence Unit (EIU) said.

Prices of commodities would rise nearly 14 percent in 2000, the research group said in its latest report received over the weekend.

Rubber tops the list of expected prices increases, rising by as much as 23 percent to 538.9 pounds (336.75 US dollars) per tonne in 2000 from a contraction of 7.6 percent in 1999.

"The EIU is forecasting a strong recovery from the second half of 2000, as reduced rubber plantings begin to feed through to tighter market conditions," it said.

Prices for the benchmark Brent crude oil would rise by 11.7 percent to an average of 20 US dollars per barrel, it said.

Oil prices would trend down throughout the year from 25 US dollars per barrel in early 2000 to around 18 US dollars in the second half of the year as the Organisation of Petroleum Exporting Countries steps up production.

"Nevertheless, the memory of the economic pain caused by low oil prices should ensure that OPEC continues to work together to prevent a repetition of significant oversupply," the EIU said.

Other gainers would include base metals such as copper, aluminium and nickel.

Copper is forecast to rise by 17.4 percent to 83.8 US cents per pound, aluminium by15.4 percent to 1,594 dollars per tonne and nickel by 11.2 percent to 3.01 dollars per pound.

Prices for fibers are expected to rise 8.8 percent this year, due to lower cotton production and demand exceeding supply for wool.ÑAFP