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Global Commodity Watch: October 2010

John Baffes's picture

Non-energy commodity dollar prices in October rose for the fourth straight month, up 3.3 percent, mainly reflecting a weaker dollar—down 6.2 percent versus the euro and 3.5 percent against a basket of currencies. Dollar prices rose across commodity sectors, including agriculture, metals, fertilizers—and oil.

Crude oil dollar prices increased 7.4 percent in October, averaging $81.72/bbl, but rose just 1.1% in euros. Dollar prices shot above $86/bbl in early November as global crude oil inventories continue to fall, particularly the large overhang of floating storage, although U.S. stocks remain high. Product stocks also dropped due to autumn refinery maintenance and strikes in France. However, refinery runs are ramping up following turnarounds, and China’s crude import demand surged in September, reflecting new refinery capacity. OPEC met October 14th and agreed to leave production quotas unchanged.

Agriculture dollar prices jumped 5.9 percent in October, up a fifth straight month, but fell 0.3 percent in euros. Cotton prices soared 21 percent to an all-time nominal high due to low stocks, strong demand and supply tightness. Maize prices climbed 15 percent following significantly lower yield estimates by the USDA. Rubber prices rose 11 percent because of heavy rains in Thailand, Malaysia and Indonesia. Several oilseed prices rose sharply due to tight supplies, strong demand from China, and concerns about Latin American soybean prospects. Sugar prices rose 9 percent on a lower-than-expected U.S. crop, and weather related shortfalls in Australia and Brazil.

Base metal dollar prices surged 7.9 percent in October, up for a fourth straight month, but only 1.6 percent in euros. Tin prices jumped 16 percent on strong demand in China, declining inventories, falling production in Indonesia from heavy rains, and output cuts in China in order to save energy.  Zinc, lead and aluminum prices rose sharply on flattening/declining inventories, but these markets remain well supplied. Copper prices rose 8 percent on falling stocks and concerns about mine supply growth. Meanwhile, silver prices surged 14 percent due to strong investment and industrial demand. 

 

Get detailed analysis and commodities prices datasets:

For price data and detailed analysis on commodities price movements in October, click here (pdf).
To download the World Bank's latest commodities price forecast, click here (spreadsheet).
To download the World Bank's commodity price data, click here (spreadsheet revised on Nov. 29).

Comments

Submitted by Matt Eldridge on
Although the conclusion of 2008/start of 2009 is a particularly unique low-point for obvious reasons, can we account for the massive surge in commodity prices (particularly in metals which have more than doubled since the end of 2008) as surging demand signaling strong rebound growth or is this a potentially worrying suggestion that inflationary pressures are outpacing the actual economic growth situation?

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