(Repeats story first issued on Oct 2)
* Commodity prices fall after long period of increases
* Rises began after surge in China's economy
* Declines follow economic slowdown in China
* Countries, companies pay price for not diversifying.
By Matthew Mpoke Bigg
TARKWA, Ghana, Oct 2 (Reuters) - In the boom times when the
price of gold was soaring, Ebenezer Sam-Onuawonto had a dream
job and a dollar salary many times the national average in this
mining town in southwestern Ghana.
When the price fell, he lost his job as human resources
chief at a mining company that closed its local operations and
could only find work in a construction firm in another city, far
from the house he built in Tarkwa for his wife and six children.
"I hardly see my kids now," said Sam-Onuawonto, his life
changed as a result of a slump in global commodity prices whose
impact is being felt around the world on currencies, companies,
consumers, national economies and - potentially - governments.
At one end of the wealth scale, the rout has affected huge
companies such as Swiss-based trading and mining company
Glencore GLEN.L , whose market value has shrunk in the past
year. At the other end, it holds the key to the fate of entire
communities dependent on the raw materials they produce.
In Tarkwa, a town of 34,000, production of gold continues
but several firms have stopped work or laid off staff in the
last two years as the effects of the price slump trickled down.
One African bank has shut its Tarkwa branch, bars and hotels
are emptier and the streets are less clogged with traffic as
people struggle with new financial problems.
"Since the fall in the gold price, things have never been
the same," said Yvonne Mensah, who has seen business wilt at the
stationary shop she runs from a converted shipping container.
Ghana as a whole, once Africa's star economy, is suffering.
Not only is gold it biggest source of foreign exchange but the
price of oil, which it also produces, has sunk, it has
double-digit inflation and the value of the cedi currency has
declined.
There are similar tales of misfortune across the continent,
with the impact felt on both the poor and the middle class.
A HUGE BUBBLE
The United Nations Conference on Trade and Development
(UNCTAD) says falling commodity prices threaten economic and
political stability in developing economies across Latin
America, Africa, the Middle East and Asia.
The events are seen by some experts as signalling the end of
a commodity "super-cycle" in which prices surged following the
rapid industrialisation of China after it opened up in the
1980s.
Countries and companies made huge investments in commodities
while prices were still high in almost all energy and raw
material markets, but this resulted in oversupply when economies
stalled in what had been booming markets.
Many producer countries are paying the price for failing to
predict the end of the cycle and not reducing their dependence
on commodities.
The most important factor in the price slump is seen as the
economic slowdown and drop in demand in China, though downturns
in Indonesia, Malaysia and developed economies such as Japan and
South Korea have also contributed to the situation.
Commodity-producing powerhouses such as Brazil, Australia,
South Africa and Russia are now in economic downturns. A halving
of the oil price in the past year has been especially painful
for Russia, also hit by sagging metals and mining prices.
"Hundreds of billions of dollars were spent in new oil,
natural gas, iron ore, coal and many other commodities in the
expectation that China would continue to grow insatiably
forever," said Frederic Neumann, Co-head of Asian Economic
Research at HSBC in Hong Kong.
"That's changed, so many of the investments made by
governments and companies now look really bad, and that's
hitting economies and company stocks hard ... It's been a huge
bubble, a massive misallocation of capital which now has to be
wound down."
There are some beneficiaries, such as consumers in developed
nations including the United States who are enjoying lower
gasoline prices at the pump, but the developed world is far from
immune to the decline in prices.
U.S. Federal Reserve Chair Janet Yellen said last month the
decline in commodity prices was one of the main reasons a 2
percent inflation target had been missed. The Fed is keeping
Americans waiting for a long-expected interest rate rise.
Britain has also felt the impact. SSI UK, a unit of Thai
steelmaker Sahaviriya Steel Industries, announced last month
that it was mothballing its iron and steelmaking plant at Redcar
in northeastern England after the fall in steel prices this year
and axing about 1,700 jobs.
Eugene Purvis, 56, a planner for crane maintenance who is
being made redundant, said the town of more than 35,000 had been
gradually declining and may never recover.
"It could be the demise of the place," he said by telephone.
"Redcar was a lovely place. If you go on the Internet and look
through old photographs, it was a lovely place. If you see any
photographs now it's decimated," he said.
"It was that bad that even McDonald's (NYSE:MCD) closed. Shop after
shop, even charity shops are closing."
LOSS OF FAITH
Even wealthy countries in the Middle East are feeling some
impact, with low oil prices hitting government revenues,
creating huge budget deficits in some countries.
Some governments in the Gulf are being forced to run down
assets abroad and to consider rationalising spending, with some
even starting to cut consumer subsidies for fuel and energy
long seen as part of a social contract with their citizens.
It would take a long downturn for the Middle East to suffer
more but investors globally are increasingly losing faith that
there will be a strong recovery by commodity prices and expect
companies and countries reliant on the sector to hit trouble.
The World Trade Organization (WTO) has downgraded its global
trade forecast from 3.3 percent to 2.8 percent for 2015, half
the annual average of 1990-2008.
Specialised commodity merchants, which have less stable
income from assets and rely on healthy trading activity, are
feeling the heat.
Publicly listed firms such as Glencore, one of the world's
largest resource companies, and commodity merchant Noble Group
NOBG.SI have seen their stock price and market capitalization
evaporate while their credit default swap (CDS) prices - the
cost of insurance against a firm's bankruptcy - have soared.
Some experts watching the fall in the value of Glencore have
asked whether this is a "Lehman Brothers moment", a reference to
the financial services firm whose collapse in 2008 was followed
by a global financial crisis.
Most say the answer is "No". Even so, traders, companies and
even governments are watching nervously.
"The energy and commodity complex is being shaken to its
very core. The cause is a combination of geopolitics, supply and
demand imbalances, technological advances and leverage,"
investment bank Jefferies said in a note to clients.
"A further collapse in energy prices could bring an increase
in geopolitical risk, and clearly the most leveraged players
will need to quickly address their capital structures or succumb
to the marketplace, which can be both swift and unforgiving."