Home Economy Global commodity price spike, or commodity ‘supercycle’, is a ‘boom’ without promise

Global commodity price spike, or commodity ‘supercycle’, is a ‘boom’ without promise

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AS developed countries begin to experiment with the first steps in the journey to post-COVID economic normalcy, they are overcome by a new fear. The fear of inflation signalled by a sharp spike in global primary commodity prices affecting markets ranging from those for grain to precious metals and raw materials. Having touched a four-year low in March 2020 when the pandemic engulfed the world, the Bloomberg Commodity Spot Index, which tracks prices for 23 such items, has risen by 70 per cent since then.

The spike appears generalised across commodities. The price of copper has more than doubled over the past year—rising from below $5,000 a tonne to cross $10,360 a tonne—exceeding a previous peak reached a decade back in 2011. Iron ore prices are approaching a record high of $230 a tonne. The price of Brent crude is close to $70 a barrel, having climbed from $55 a barrel at the start of the year. It is expected to rise to touch $80 a barrel in the…

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