The AUD was hit yesterday after China instructed state owned utilities and steel mills in China that they should stop importing Australian thermal and coking coal immediately. The AUD fell 0.5% on the news but later recovered a bit after the market worked out that it is not simple to substitute other suppliers of coking coal and so the assumption is that this is more of a short term glitch in the two nations’ relations rather than a longer term severance. SGM-FX Client Desk’s Harry Clynch was seen busily researching mineral stats yesterday and has rightly concluded that China needs Australia’s rich natural resources to develop its economy and Australia needs China’s voracious appetite for its exports.
Following reports of how huge farms in Kenya are mistreating their workers (or worse) in the name of profitability and supplying major European supermarket groups with fashionably healthy avocadoes, the super fruit is back in the news again this time nearer to home in Portugal. Here the avocado’s crime is not against humans but against the water table. In the Algarve a move by large numbers of farms to grow avocadoes has depleted meagre water supplies and is threatening a wider drought. Avocadoes need 4 times as much water as the traditional orange crop. Avocado plantations cover 1,600 hectares or 3,950 acres in the Algarve and that requires almost 30 million litres of water each day…every day. Apart from being fashionable and healthy, avocadoes are economically highly attractive to those farmers: to them 1kg of oranges is worth EUR 0.5 whereas 1kg of avocadoes brings them EUR 2.20. Production costs are lower and so while the water flows, so do the profits.
Today is Moody Blues guitarist Justin Hayward’s 74th birthday. Written in 1968 by Justin Hayward, the song that has become synonymous with the Moody Blues is Nights in White Satin. Britain was slow to appreciate the song and having initially only got as far as Number 9 in the charts it took a further 4 years when Nights in White Satin made it to Number 2 on re-release in 1972. Here’s a reminder of why Justin Hayward who joined the Moody Blues in 1966 is still rocking on along with Graeme Edge(1964) and John Lodge (also 1966) in 2020:
Nights in white satin
Never reaching the end
Letters I’ve written
Never meaning to send
Beauty I’ve always missed
With these eyes before
Just what the truth is
I can’t say any more
‘Cause I love you
Yes I love you
oh oh oh I love you
Gazing at people
Some hand in hand
Just what I’m going through
They can understand
Some try to tell me
Thoughts they cannot defend
Just what you want to be
You will be in the end
And I love you
Discussion and Analysis by Humphrey Percy, Chairman and Founder
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