The Parrot Says That Commodity Prices Will Rise

Feb. 05, 2023 1:59 AM ETJO, DBC, GSG, DJP, GSP, GCC, BCM, BCI, BCD, COM, USCI, FTGC, COMT, PDBC, UCIB, FAAR, COMB, SDCI, CMDY, DJCB, JJS, CCRV1 Comment
Otaviano Canuto profile picture
Otaviano Canuto
487 Followers

Summary

  • In 2023, both the demand and supply sides point to upward pressure across much of the set of commodity prices.
  • The limits of lack of supply are visible in almost all segments, with stocks at operating levels in a critical situation and/or production capacity used to the limit.
  • Not all commodity prices will necessarily move up. As far as energy, metals, and minerals are concerned, the parrot is likely looking up at this point.

Trading charts background

da-kuk

As the introductory textbook to economics by Nobel Prize Paul Samuelson, who served several generations of students, including mine, said: "It is easy to teach economics to a parrot. Two words are enough: supply and demand". These two

commodity prices

World Bank

Chart, line chart Description automatically generated

Goldman Sachs

inventories nickel and EV China

BTG Pactual

price index of hard commodities

EIU

Fertilizer prices

World Bank

This article was written by

Otaviano Canuto profile picture
487 Followers
Otaviano Canuto, based in Washington, D.C area, is a senior fellow at the Policy Center for the New South, professor at George Washington University, principal of the Center for Macroeconomics and Development and a non-resident senior fellow at Brookings Institution. He is a former vice-president and a former executive director at the World Bank, a former executive director at the International Monetary Fund and a former vice-president at the Inter-American Development Bank. He is also a former deputy minister for international affairs at Brazil’s Ministry of Finance and a former professor of economics at University of São Paulo and University of Campinas, Brazil.He has authored and co-edited 8 books and over 160 book chapters and academic articles, and is a frequent contributor to numerous blogs and periodicals.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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