Earlier this month, the World Bank published a paper pointing out that although global economic growth in 2024/25 is expected to be nearly half a percentage point lower than the average in the half decade before the Covid pandemic, average commodity prices are likely to remain close to 40% above 2015 to 2019 levels for energy and base metals, and 30% higher for food.
Various factors account for this deviation, ranging from oil-supply constraints and high demand from China to growth in metals-intensive investment in clean-energy technologies and heightened geopolitical tensions.
“Food and agricultural prices are expected to taper, but extreme weather remains a key risk as was evidenced by record high coffee and cocoa prices,” explains Farah Lotia, vice-president of risk and quantitative analytics at GTreasury.
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