Raw material commodity prices continue rising amid stronger demand
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Prices of agricultural raw materials have sustained their upward momentum that began in the second quarter of last year. The Raw Material Price Index stands nearly 18% higher than a year ago, led by cotton and rubber prices. Raw material prices are expected to average 10% higher this year, compared to 2020, before stabilizing in 2022, according to the World Bank’s Commodity Markets Outlook.
Strong demand for cotton supports prices. (led by China and India), which is expected to reach 24.8 million metric tons in the current season (ending August 2021), almost 9% higher than 2019-20. Cotton prices have also been supported by lower supplies, with global production projected to fall 7% this season before recovering slightly in 2021-22. The production declines (which reflect reduced plantings in the U.S., India, and Pakistan), coupled with strengthening of consumption, pushed the stocks-to-use ratio (a measure of supply relative to demand) down to 88% during the current season, from last season’s 98%. Cotton prices are expected to average more than 20% higher in 2021, compared to 2020, followed by a small increase in 2022.
Natural rubber prices have staged a remarkable recovery. The recovery of the global auto sector, which began in the last quarter of 2020, has boosted demand for natural rubber. Global natural rubber consumption grew by 160,000 metric tons in 2020Q4 (y/y), or 5%, led by recovery in China’s tire manufacturing. On the supply side, there are still problems with labor availability in some countries (e.g., Thailand) due to border restrictions on labor movement.
Natural rubber consumption and production
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During the global pandemic, economic development was hindered; commodity prices rose, on the one hand, reflected strong demand; on the other hand, it also reflected severe inflation and excessive currency circulation!
Only reasonable prices under normal economic development conditions will be beneficial to economic development and people's lives.
Thank you for the very useful information.
Write a response... The raw material commudity, cotton and natural rubber prices must continue rising if the agricultural sector and experts do not have a good plan to restructure the farmers. Whereby a farmer of a particular product like cotton must be forced to farm and plant only cotton and for those that are farming the raw material or natural rubber must also be forced to have one particular product of this cash crops but not to farm all of the cash crops at the same time in on plot of farm land since these will bring more life to the crops and if the farmers have more good harvest the prices can be reduced due to having so plus of the crops in the market. Thank you!
Hi , this is Jahan Tejarat Dornika's company from Iran . we need Neodymium's raw material about 25 gr from China.