Commodities have challenged, thus far, the predictions that the armed conflicts in Europe and the Middle East would cause an upsurge in the world prices of food, fuels, and minerals. Before the conflict in the Middle East, in October the World Bank released the Commodity Markets Outlook. https://openknowledge.worldbank.org/server/api/core/bitstreams/44f54d51-6b06-4ac3-b886-38a46754229f/content
According to the report, mostly because of production cuts announced last July, led by Saudi Arabia and other members of the Organization of Oil Exporting Countries, oil prices have remained above $70 per barrel. Last week they were approaching $80, but retreated slightly this week, despite last Sunday’s announcement by Saudi Arabia, together with Kuwait and the United Arab Emirates, that they will continue cutting oil production through June. However, what is notable and in acute contrast with the past, is that thus far the conflict in the Middle East has not caused an upsurge in oil prices.
Something similar can be observed in food prices. After all, together Russia and Ukraine account for one third of world wheat production. While transportation through the Black Sea has persisted despite the continuation of the conflict, the World Bank projects food prices will fall slightly in 2024.
Finally, metal and mineral prices were falling before the Middle East conflict and the bank projects they will remain subdued, mainly because of the slowdown in the Chinese economy heavy industry and housing construction sectors.
*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.
