Source:Insee

12 JANUARY 2012

Total imported raw material prices remained in negative territory in December month-on-month and fell -1.9% pushed down by the food prices index -3% dip and industrial goods -1.2% price index decline as slower demand affected supply prices due to record high jobless figures in the single currency region, on top of a lack of business and consumer confidence triggered by sovereign and corporate credit rating warnings. 

Brent crude oil prices decreased by 2.4% on the same period impacted by two record lows at USD 105/b and USD 103/b in mid-month, the biggest drops since September, triggered by renewed fears of a Greek debt default due to the bailed-out state recession, deeper than anticipated. A political deadlock over the Euro area‘s fiscal compact pressed the Euro‘s foreign exchange rate as well, to a low USD 1.29 and led crude oil prices, expressed in the single currency, to record a monthly average +0.6% gain.

Heating oil prices by contrast, more dependent on demand, fell -4.9% since clement weather temperatures for a December month halted orders.

The imported food prices index deflation, yet to be carried over to consumers, recorded cereals -3.9% price index cut due to record maize and world wheat  supplies. Tropical food prices (cocoa and tea mostly) also fell substantially -7.2% due to lesser demand while sugar prices -4.5% decline benefited from higher stocks and lower consumption. 

Agro-industrial products biggest price index cut was recorded by natural textile fibbers -7.2%, mostly cotton, due to over supply and feeble world demand, followed by leather -6.1%. Wood pulp prices fell -3.6% as recycling and digital communication have been increasingly cutting down demand. Natural rubber prices dipped -1.1% as a slow automobile market in Europe was offset by signs of an overseas pick-up and equally timber, a +7.7% rise thanks to a strong rebound of single family home starts. Inversely, tropical wood prices decreased
-0.5%, as demand stayed scarce due to stringent customs controls to prevent deforestation.  

Mineral prices on the same period reflected a similar context, squeezed by trading markets volatility. Precious metals prices declined -6.3% as gold prices fell in sell-out sessions upon investors liquidity needs while the green back rose on stronger economic data. Non ferrous metal prices, less volatile, declined -1.2% smoothed out by lower aluminum and copper prices.

In one year, Brent crude oil prices rose +18.4% in Euro and expressed in currency +17.8% to a monthly average USD 108. Heating oil prices jumped +21.8% impacted by last year harsh winter temperatures and mechanically carried over. Overall imported raw materials prices fell -11.3% as food prices dropped -7.9% and industrial goods -13%. The biggest price index declines were recorded by natural textile fibers -36.2%, natural rubber -26.8%, and sugar
-24.9%. On the same period, the cereals prices index rose +5.1%, nonferrous metals -15.7% unlike precious metals +10.5% gain.