Fewer new commodity products as recovery drags

By Barani Krishnan

NEW YORK (Reuters) - The commodities marketplace, one of Wall Street's favourite playgrounds for testing new investment ideas, is hardly seeing any product rollouts now as the slow economy delays the pace of innovation.

A "green" futures index and a remodelled online derivatives exchange are among the few commodity product launches in the United States this year. A U.S. platinum exchange-traded fund -- the first of its kind -- is awaiting regulatory approval.

Compare that with the commodities boom of the past few years, which spawned a multitude of exchange-traded products and mutual funds linked to oil, metals and agricultural futures, as well as equities of energy and mining companies.

Even British investment bank Barclays Capital (BARC.L), which dominates the U.S. market for bond-like notes linked to commodities, has not introduced anything in that market for more than a year.

BarCap issued 18 exchange-traded notes -- or ETNs -- linked to commodities in 2007, up from just three in 2006. But the last came out in June 2008.

Many think the halting progress boils down to one thing: the economy's slower-than-expected recovery from recession.

"You don't have those big amounts of money sloshing around anymore to do what you want," said Edward Meir, a metals and energy analyst in New York for broker MF Global. "Not everybody is going to get enough to make their markets liquid."

Michael Pento, chief economist for Delta Global Advisors in New Jersey, agrees.