During FOREX EXPO Dubai 2023, the premier two-day trading event, traders, investors, risk managers, and analysts had the exclusive chance to attend a specialized seminar featuring key note speakers, including Amro Zakaria, Senior Market Analyst – MENA at FOREX– part of StoneX Group Inc – who shared valuable insights about emerging trends, risks and opportunities in the commodities market.
Zakaria tapped into the ever-evolving landscape of the market, which plays a significant role in the global economy, impacting the prices of essential goods and resources. He also shed light on the latest trends and challenges while exploring the factors driving those trends.
“Understanding the dynamics of the commodities markets is crucial for businesses and individuals” says Zakaria, citing three primary factors influencing these markets today, including: supply chain disruptions, geopolitical influences, and inflation and interest rates.
Earlier this September, the World Bank had published the latest commodity prices, indicating a 7.8% increase in Energy prices during August, as well as an 8.2% jump in fertilizer prices. On the other hand, prices decreased across different categories such as non-energy (-1.2%), food (-2.2%), raw materials (-0.6%), metals (-1.9%), and precious metals (-1.9%).
According to Amro Zakaria,“Supply chain disruptions and unforeseen events, such as conflicts and extreme weather patterns, may affect commodities markets. Similarly, geopolitical influences, such as the ongoing Russia-Ukraine conflict, may impact various commodities, including industrial and precious metals, grains, and energy commodities”, adding“the dynamics between inflation, interest rates, and commodities, also have repercussions on the market, especially in emerging markets.”
Furthermore, Zakaria discussed the main tools and models used by market participants in exploring commodity price risk analysis. These encompass technical analyses which enable informed decision-making; Liquidity-adjusted VaR (L-VaR) modeling, useful for assessing the impact of price fluctuations on large portfolios; diversification, which spreads risk across commodities, markets, or regions; and hedging, using financial instruments to safeguard against price volatility.
“These tools and models are used by traders and companies in the sector to manage commodity price risk effectively, enhance their risk management strategies, and may improve their overall financial performance”, said Zakaria.
For oil-producing Middle Eastern countries, a massive part of the commodities market's stability and growth is determined by demand on refined products.
According to financial data and analytics experts S&P Global Inc., commodities market global consumption of major refined products, including gasoline, diesel, jet fuel and fuel oil, is expected to reach 69.3 million b/d by 2030. Exports of major refined products from KSA, the UAE, Kuwait, Iraq, Qatar and Bahrain to Northwest Europe grew by 240% in the first four months of 2023, compared with the same period in 2022. Shipments to the Far East also rose.
With global oil flows being reshaped by the Russia-Ukraine conflict, oil-producing countries in the Middle East are seizing the day, sparing no efforts to cater to the growing demand. In fact, four new refineries have recently launched or are aiming to do so by the end of 2023, in KSA, Kuwait, Iraq and Oman. The S&P Global Commodity Insights expect the Middle East's total production of major refined products to increase 5.5% year over year in 2023 to 8.17 million b/d and to reach 8.48 million b/d by 2024.
A part of StoneX Group Inc. (NASDAQ: SNEX), a publicly traded company with over $8.5 billion in trader assets. FOREXis one of the world's most established retail trading brokerages, a trading name of GAIN Global Markets Inc. which is authorized and regulated by the Cayman Islands Monetary Authority under the Securities Investment Business Law of the Cayman Islands (as revised) with License number 25033, with its principal place of business at 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA.
Operating since 2001, the platform offers its clients access to over 80 FX pairs as well as gold and silver, and is the partner of choice for 750,000 worldwide traders*.
FOREXusers can experience intuitive, secure trading with super-fast execution across mobile apps, web trading, MT4 and MT5. They can access state-of-the-art data tools such as SMART Signals and Performance Analytics to refine their approach and boost their analytical skills with features such as Market 360, Trading Central and the latest TradingView charting. Furthermore, a team of expert analysts provide in-depth technical and fundamental insight to inform trading decisions.
In 2022, FOREXwas awarded Best High Net Worth Services at the Dubai Forex Expo, and Best CFD Broker in the Rankia Awards. In 2023, Best New Trading Tool: Performance Analytics and Best in Class: Overall, in the Forexbrokersawards.
The wider StoneX Group Inc. is a Fortune 100 company operating since 1921. Through its subsidiaries, StoneX serves more than 52,000 commercial, institutional, and payments clients, and more than 370,000 active retail accounts across more than 180 countries.
*All New Approved Clients Globally Through FOREXsince 2019. Leveraged trading involves significant risk of loss. It is not suitable for all investors.
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