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The Commodity Markets Outlook in six charts

John Baffes's picture
This blog is the first in a series of nine blogs on commodity market developments, elaborating on themes discussed in the April 2019 edition of the World bank’s Commodity Markets Outlook.

Oil prices will moderate from their current highs and be lower on average in 2019 than in 2018 on slower-then-expected global growth and rising non-OPEC production, according to our latest Commodity Markets Outlook. Metal, agriculture prices are on track to stage a partial recovery, with momentum likely to pick up in 2020.
 
Commodity prices reversed declines in early 2019

 
Most commodity prices accelerated up in the first quarter of 2019 following last year’s declines, and many have recovered from drops in the last quarter of 2018.
 

Energy prices rose in March—Pink Sheet

John Baffes's picture
Energy commodity prices rebounded in more than 3 percent in March, led by oil (+4 percent), the World Bank Pink Sheet reported. Coal and natural gas prices (Europe) declined 4 and 14 percent, respectively.

Non-energy prices declined marginally, with losses in beverages and food balanced by gains in raw material and metals.

Agricultural prices declined nearly one percent, with drops in beverages (-2.5 percent) and food (-1.5 percent) partly balanced by increases in raw materials (+1.4 percent).

Fertilizer prices declined almost one percent, reflecting losses in TSP and DAP (-6.7 and -6.2 percent, respectively) and gains in potassium (+14 percent).

Metals prices gained 1.2 percent, led by increases in zinc (+5.3 percent) and copper (+2.2 percent).

Precious metals prices declined nearly 2 percent in response to declines in silver (-3.3 percent) and gold (-1.5 percent).

The Pink Sheet is a monthly report that monitors commodity price movements.
 
Nominal price indexes, percent changes, March over February

 

Energy prices fell 11 percent in December–Pink Sheet

John Baffes's picture
Energy commodity prices plunged more than 11 percent in December, led by oil (-13 percent), the World Bank’s Pink Sheet reported.

Non-energy prices fell marginally as losses in beverages, fertilizers, and metals were balanced by gains in food and precious metals.

Agricultural prices gained less than one percent—a 3.5 percent decline in the beverage price index was offset by a 3.5 percent gain of the food price index in response to grain price increases.

Energy prices fell 15 percent in November–Pink Sheet

John Baffes's picture
Energy commodity prices plunged more than 15 percent in November, led by oil (-19 percent) and coal (-7 percent), the World Bank’s Pink Sheet reported.

Non-energy prices declined by 1 percent, due to losses in agriculture and metals.

Agricultural prices fell 1 percent—a 3 percent decline in oils and meals was offset by a marginal gain in beverages.

Fertilizer prices gained nearly 6 percent, led by a 13 percent increase in urea.

Rebound in metal prices? All eyes on China and trade

Wee Chian Koh's picture

This blog is the eighth in a series of ten blogs on commodity market developments, elaborating on themes discussed in the latest edition of the World Bank’s Commodity Markets Outlook. Earlier blogs are here.
 
The World Bank’s Metals and Minerals Price Index is forecast to remain broadly unchanged in 2019, following a projected 5 percent increase in 2018. However, volatility is anticipated to remain elevated due to China’s environmental policies, tariff negotiations between the United States and China, and Chinese policy responses aimed at stimulating the economy and cushioning the impact of trade tensions.

Fertilizer prices to rise in 2019 on supportive fundamentals

John Baffes's picture

This blog is the seventh in a series of ten blogs on commodity market developments, elaborating on themes discussed in the latest edition of the World Bank’s Commodity Markets Outlook. Earlier blogs are here.
 
The World Bank’s Fertilizer Price Index is expected to rise 2 percent in 2019, following a projected increase of 9 percent in 2018. The index rose 8 percent in the third quarter of 2018 (q/q) on high energy costs and tight supplies and was more than 18 percent higher than 2017Q3.

Beverage prices weak on good crops and currency movements

John Baffes's picture

This blog is the fifth in a series of ten blogs on commodity market developments, elaborating on themes discussed in the latest edition of the World Bank’s Commodity Markets Outlook. Earlier blogs are here.
 
The World Bank’s Beverage Price Index is projected to stabilize in 2019 after a more than 5 percent decline in 2018 from the previous year. Beverage prices declined almost 9 percent in the third quarter (q/q), with roughly similar losses across all three components (coffee, cocoa, and tea), reflecting more supplies than expected in all markets.
 
Beverage price index

 

Food prices to edge up in 2019 but energy, trade, and foreign exchange could unsettle outlook

John Baffes's picture

This blog is the fourth in a series of ten blogs on commodity market developments, elaborating on themes discussed in the latest edition of the World Bank’s Commodity Markets Outlook. Earlier blogs are here.
 
Grain prices are projected to edge up 1 percent in 2019 after an estimated 10 percent rise in 2018, and oils and meals prices are expected to increase more than 2 percent next year, reversing a 2 percent decline this year. However, these price forecasts are subjected to risks that include energy, trade, and foreign exchange movements.
 
After gaining some momentum in early 2018, most food commodity prices weakened significantly in the third quarter. The World Bank’s Grain Price Index declined nearly 6 percent in Q3 but was 8 percent higher than a year ago. The Oils and Meals Price Index fell almost 11 percent in Q3, and stands 3 percent lower than a year ago.
 

Burning bright or burned out? The outlook for coal and natural gas markets

Peter Nagle's picture

This blog is the third in a series of ten blogs on commodity market developments, elaborating on themes discussed in the latest edition of the World Bank’s Commodity Markets Outlook. Earlier blogs can be found here.
 
Recent developments and outlook: coal

Coal prices rose 12 percent in the third quarter—the fifth straight quarterly increase—and are up 23 percent relative to the same quarter of 2017. Weather patterns in Asia and Europe have been the main drivers of the rise in prices. Low winter temperatures at the start of the year raised demand for fuel for heating, while unusually hot summer temperatures boosted electricity demand for air conditioning. In addition, low hydro availability and supply constraints in the two largest markets--China and India—increased coal imports.

Prices are projected to decline from current elevated levels as China is expected to reduce coal imports by stimulating domestic production, as well as by lowering the share of coal in energy consumption. Upside risks include continued strong growth in electricity demand in other emerging markets that will be met to some extent by coal. Production shortfalls in China and India could also raise import demand and support prices.
 

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