Tough times helped many commodities producers become lean and mean through consolidation, mergers and cost-cutting. All that excess supply has been sopped up.
Sentiment: NEGATIVE
As a general rule, durable-goods production tends to be the most volatile sector of the economy. Since people usually have a stock of durables in use, when times get tight, they put off new purchases. What seem like small cutbacks to the end buyer translate into big swings for the producer.
The exchangeable value of all commodities, rises as the difficulties of their production increase.
With such enormous bucks devoted to trading in oil and other commodities, the distortions that they cause have been exacerbated.
We have had a great depression in agriculture, caused mainly by several seasons of bad harvests, and some of our traders have suffered much from a too rapid extension in prosperous years.
Strapped by tight credit and plummeting sales, businesses have overhauled the way they manage supply chains, inventory, production practices and staffing.
As scarce as truth is, the supply has always been in excess of the demand.
I tend to look at things from the supply side, looking for ways to make it less expensive to do more production. I think that's what creates a demand and keeps an economy moving.
The farmers are older; they are under financial stress to produce more margins, yet they keep getting less.
Supply always comes on the heels of demand.
The factors that have been holding farmers back are similar to those that threaten other types of growth in Africa. Infrastructure and transport are in many cases quite poor, resulting in the losses of huge amounts of produce.
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