MGO Trend Graph

Marine Gas Oil - Price Trends : roller coasting up, down and up up UP UP down and UP again...

Rotterdam Spot Market: May 2005 - April 2006

One of the problems with a rolling trend line is that it can lose sight of the longer term movement. Oil prices are just such a case - bad enough that the graph opposite shows a steady rise 2005 to date - what it does not show is that the cost of marine diesel is averaging some 240% - 260% of the cost following the invasion of Iraq.

There is no sign of sustained reversal ... new highs on the Rotterdam price of Marine Gas Oil Price seem to occur every few weeks - although we predicted this back in 2004 we nonetheless lament it coming to pass.

The reality, in absolute terms, is that in just over 2 years MGO has gone up from 17 euro-cents per litre to between 40-47 euro-cents per litre.

Manufacturers can generally recover cost increases by adjusting the selling price and/or effecting cost savings (reduce quality, raw material). Fishermen, and their selling partners (auctions) are not able to do so - fish is a product that competes with other food in a global market.

FISHERMEN CAN NOT PASS ON COST INCREASES

Energy efficient catching methods can not be developed and implemented overnight - and even if available we may have to accept that they could be less efficient in yield.

Temporary measures to assist fishermen with the worst excesses of fuel cost increases are welcome but can not continue indefinitely.

In the medium and long term the most effective way to deal with cost increase is by achieving significantly better average selling prices.

This requires effective marketing on a wide front. Auctions and Producers must act together on this as a concerted, pan-European strategy - no buyer will willingly pay more.

Comment 22-04-2006

Currency Exchange

From a high of $1.35 at the start of 2005 the euro dropped back for the first half of the year but the dollar is under some slight pressure again and the euro is hovering above the $1.20 level.

Sterling has suffered on its poor growth (only 1.5%) and is down to £1.78 or so.

Although the Euro and Sterling have fallen back against the dollar they remain, in relative terms, strong against 3rd country exporters of fish. This makes Europe an interesting market for suppliers from the Far East. Africa and South America.

It also makes it more difficult for internal producers who have to cope with the twin evils of high production costs and cheaper imports.

After months of contango there is no sign of respite. G7 call for producers to increase production as high oil costs affect industry.

IPE LONDON

Brent breached $74 barrel as geopolitical events and US stock drawdowns continued. Prices are expected to go higher..!!!

"I wish I could simply wave a magic wand and lower (gasoline) prices tomorrow. I'd do that. Unfortunately, higher prices are a problem that's been years in the making."
(US President George W. Bush)

US Strategic Stocks have a bearing on World Markets

Rotterdam Spot Market: May 2005 - April 2006
One of the problems with a rolling trend line is that it can lose sight of the longer term movement. Oil prices are just such a case - bad enough that the graph opposite shows a steady rise 2005 to date - what it does not show is that the cost of marine diesel is averaging some 240% - 260% of the cost following the invasion of Iraq. There is no sign of sustained reversal ... new highs on the Rotterdam price of Marine Gas Oil Price seem to occur every few weeks - although we predicted this back in 2004 we nonetheless lament it coming to pass. The reality, in absolute terms, is that in just over 2 years MGO has gone up from 17 euro-cents per litre to between 40-47 euro-cents per litre. Manufacturers can generally recover cost increases by adjusting the selling price and/or effecting cost savings (reduce quality, raw material). Fishermen, and their selling partners (auctions) are not able to do so - fish is a product that competes with other food in a global market. FISHERMEN CAN NOT PASS ON COST INCREASES Energy efficient catching methods can not be developed and implemented overnight - and even if available we may have to accept that they could be less efficient in yield. Temporary measures to assist fishermen with the worst excesses of fuel cost increases are welcome but can not continue indefinitely. In the medium and long term the most effective way to deal with cost increase is by achieving significantly better average selling prices. This requires effective marketing on a wide front. Auctions and Producers must act together on this as a concerted, pan-European strategy - no buyer will willingly pay more.
Comment 22-04-2006
Currency Exchange From a high of $1.35 at the start of 2005 the euro dropped back for the first half of the year but the dollar is under some slight pressure again and the euro is hovering above the $1.20 level. Sterling has suffered on its poor growth (only 1.5%) and is down to £1.78 or so. Although the Euro and Sterling have fallen back against the dollar they remain, in relative terms, strong against 3rd country exporters of fish. This makes Europe an interesting market for suppliers from the Far East. Africa and South America. It also makes it more difficult for internal producers who have to cope with the twin evils of high production costs and cheaper imports.	After months of contango there is no sign of respite. G7 call for producers to increase production as high oil costs affect industry. IPE LONDON Brent breached $74 barrel as geopolitical events and US stock drawdowns continued. Prices are expected to go higher..!!! "I wish I could simply wave a magic wand and lower (gasoline) prices tomorrow. I'd do that. Unfortunately, higher prices are a problem that's been years in the making." (US President George W. Bush)
US Strategic Stocks have a bearing on World Markets