Five charts to start your day

What's driving commodity prices in 2024?

Commodities would seem to have had a relatively tranquil 2024, following the disruptions caused by the pandemic and war in Ukraine. Yet the truth is we have probably just got use to commodity price inflation. Major commodities have experienced double-digit price increases year-to-date and we are not even halve way through the year.

Gold has reached new highs. Cocoa has shot through the roof due to poor harvests in Ghana and the Ivory Coast – key cocoa-producing nations. And, we are not even talking about energy prices here (excl. natural gas).

I know what you see below is arguably not one single chart. I saw this series in the latest Visual Capitalist newsletter. But I think you really need to view these all together to appreciate the story being told here.

Visual Capitalist has pointed out that this heightened volatility across commodities, which has been experienced over the past three years, poses challenges for economic growth. It makes it tough for households and businesses to plan ahead with confidence for future expenditure or investment.

But here is one takeaway here that I haven’t mentioned. What’s driving commodity growth this year? Is it the supply-side, like it has been over the last few years? Or is it on the demand-side, thanks to a resurgence in manufacturing? If it’s on the demand-side, we may indeed get more commodity inflation, but it might not be so damaging to global economic growth. It might be actually the result of economic growth.

Source: VC Newsletter

Coming up:

• America’s nuclear power output is flat

• Markets go cuckoo for cocoa

• The BlackRock pushes tokenised government securities beyond $1 trillion

• Dollarisation has help the economies of El Salvador and Ecuador

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