Political unrest weighs down on Mediterranean markets
Trading activities in the Mediterranean markets of Egypt and Turkey have been hampered by ongoing political unrest as per the pricing service of ChemOrbis. Egyptian and Turkish polymer players act cautiously when making new purchases since the market outlook is clouded by current events, and the recent unrest has caused the USD parity to move up, making trade difficult especially for imports.
According to local media sources in Egypt, opponents of Islamist President Mohammed Morsi are planning mass protests on June 30 calling on him to step down and peaceful protests were permitted. The polymer market, however, worries about the possible effects of the approaching planned protests in terms of the financial situation of the country. To make matters worse, Islamists who support Morsi’s government responded with a counter- protest to restate their confidence in the political system and the elections that brought him to power. Supportive Islamist groups were called for a June 21 protest against anti-Morsi protestors.
A film and injection products converter voiced his worries by saying, “Apart from the overall limited availability for almost all products, which caused prices to record large increases, especially for local PE prices, the impending protests are also driving players out of the market. Right now, the country’s political situation is complicated and players only prefer to do back-to-back business as they do not want to turn to the black market to meet their dollar needs at very high rates given the lack of dollar reserves in the country and the higher USD/EGP parity.”
A trader who offers various polymers remarked, “Overall availability is very limited for almost all materials. A major Middle Eastern producer does not prefer to offer since buyers struggle to meet their payment conditions amidst ongoing liquidity issues. Looking ahead, we cannot pronounce a clear view since the protests are hindering the demand sharply. We believe the market is likely to remain foggy until the political situation calms down.”
Another Mediterranean market Turkey has also been struggling with protests against the government’s policies since May 28, which resulted in the dollar parity moving up as high as 1.9447 and stock markets fluctuate.
Almost all players agreed that the business activities were stagnant during the last week since buying interest was quiet. A trader reported, “Overall demand is very poor and we tie this situation to the current political turmoil. Because of the very same reason we, too, are reevaluating some of our business activities. Everyone appears to be in a wait-and-see mood but the market should be clearer in the days ahead.”
Another trader noted, “Overall demand is not doing well given the current political and economic conditions. Players are mostly sidelined from the market.”
According to ChemOrbis, a distributor said, “We kept our prices unchanged during last week and we do not think that prices are likely to show great changes over the near term given the current market conditions. Demand is weak and the recent protests which caused the parity to move higher added to the situation.”