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Latest Development
Let’s learn more about Latest Development in the Commodity Market as listed below.
General trends
After a long period of steadily rising prices after 2000, commodity markets were hit by severe turbulence during 2008. The prices of some commodities reached historic peaks by the middle of the year in nominal terms – and in real terms for metals, minerals and crude oil. Soon after this, commodity prices experienced a sharp fall which was closely linked to heightened global economic uncertainties and financial shocks, hitting their trough at the beginning of 2009 as the global economy slowed sharply. However, prices began to trend upwards during the first quarter of 2009 despite the continuation of the global economic downturn; between January and October 2009, the UNCTAD non-oil commodity price index rose by 20 percent, led by the minerals, ores and metals group. However, the future dynamics of prices remain uncertain.
Agriculture
Grains
In 2008, the prices of basic foods on international markets reached its pinnacle in over 30 years, before dropping back sharply in the second half of 2008 and early 2009, and rising again in the second half of 2009 to well above their pre-2008 level. In the midst of the 2008 food crisis, crop failure due to climatic shocks in a number of leading wheat-producing regions such as Australia added to price pressures. Similarly, the slight decrease in world wheat production at the end of the 2008/2009 season, attributed to the reduced crop harvest in Europe and the United States, and not offset by recoveries in production in countries such as Argentina and the Islamic Republic of Iran, helped to trigger (and sustain) the upward trend in prices. It is one of the lastest development in commodity market.
Sugar
Adverse weather conditions in major sugar-producing countries, such as Brazil, China, India, Mexico and the Russian Federation led to predictions of lower levels of sugar production over the 2008/09 season. In addition to the influence of climatic factors, low levels of production continue to reflect persistent underinvestment in the sector due to depressed prices on international markets. However, increased demand led to sugar being the year’s best-performing “soft” commodity, as prices reached their highest level since 1980.
Vegetable oilseeds and oils
After a downward trend during the first quarter of 2009, prices of soybeans and soybean oil recovered in the second and third quarters. The increase is mostly attributed to crop losses due to severe drought in South American producing countries such as Argentina, coupled with increased demand from China. Supply shortages predicted to be generated by the El Niño phenomenon in South-East Asia are set to maintain the upward price trend.
