Saturday Aug 30, 2014
| Text Size
[-]
[+]
Search IPPmedia

BoT says three commodities face low prices in global market

19th November 2012
Print
Bank of Tanzania (BOT)

Prices of three commodities at the world market declined due to various reasons including increased production in major producing countries, hence affected local farmers, the Bank of Tanzania (BoT) Monthly Economic Review for September this year has said.

According to the review, the crops affected in August this year were coffee, tea and cotton.

The price of coffee declined due to increased levels of production in Colombia, Brazil and Vietnam following improvement in weather condition in those countries, it said.

Likewise, the price of tea (average) declined mainly due to the rise in supply of the product from India and Australia.

As for cotton, the fall in the price was mainly attributed to continued weak global demand by textile manufacturers.

On the contrary, the price of cloves increased due to low production levels in Indonesia following the outbreak of clove diseases there.

On the other hand, the price of sisal increased largely on account of increased global demand.

The review further stated that average prices of crude oil (average, Dubai f.o.b) and white petroleum products increased during the year ending August 2012, largely due to the ongoing political tension in the Middle East.

Likewise, the price of gold increased due to a rise in demand for gold as a safe investment amid the debt problems experienced in the Eurozone.

During the period under review, services receipt were USD2,493.0m compared with USD2,221.2m recorded in the corresponding period in 2011.

Travel and transportation receipts accounted for more than 80 percent of the total services receipt.

The improvement in travel receipts was largely attributed to the increase in the number of international tourist arrivals, while performance in transportation receipts was mainly on account of the increase in the volume of transit goods.

Cumulative expenditure in the first two months of 2012/13 amounted to 1,342.2bn/- or 61.1 percent of the estimate.

Out of the total, recurrent expenditure was 1,021.1bn/- and development expenditure 321.1bn/- , equivalent to 68.6 percent and 45.3 percent of the period estimates, respectively, the review said.

Government budgetary operation for the first two months of 2012/13 resulted in the overall deficit of 359.2bn/- after adjustment to cash.

This was financed by net foreign loans of 100.7bn/- and a net domestic borrowing of 258.4bn/-.

During the year ending August 2012, the current account deficit widened to USD3, 596.4m from a deficit of USD3, 006.1m recorded in the corresponding period in 2011.

 The widening deficit was largely associated with the increase in imports of oil and machinery.

In the treasury bonds market, the Bank offered 2-year and 7-year bonds worth 43bn/- and 30.0bn/-, respectively.

Investors continued to show preferences in treasury bonds with shorter maturity by registering total demand worth 108.6bn/- and 49.5bn/- for the 2-year and 10-year treasury bonds, respectively.
The Bank accepted bids amounting to 43bn/- and 30bn/- at face value.
During August 2012, inter-bank cash market transactions amounted to 1,099.4bn/- compared to 783.1bn/- transacted in July 2012.
Overnight transactions accounted for 82.6 percent compared to 80.9 percent recorded in the preceding month.
 
Overall interbank cash market rate continued to decline reaching 5.54 percent in August 2012 compared to 6.21 percent recorded in the preceding month and 8.37 percent registered in the corresponding month of 2011.

SOURCE: THE GUARDIAN