Commodities index hits record as world rebound meets shortages
BNN Bloomberg
A gauge of commodities soared to an all-time high as a resurgence in demand for raw materials collides with supply constraints, working to fan fears of inflation around the world.
A gauge of commodities soared to an all-time high as a resurgence in demand for raw materials collides with supply constraints, working to fan fears of inflation around the world.
The Bloomberg Commodity Spot Index, which tracks 23 energy, metals and crop futures contracts, rose 1.1 per cent on Monday, topping a 2011 record. The index has surged more than 90 per cent since reaching a four-year low in March of last year.
Among the biggest gainers are energy commodities such as natural gas, which has surged amid shortages in both Europe and China that are threatening to spread to other parts of the world. Oil jumped to the highest in almost seven years on Monday after OPEC+ decided to maintain a gradual supply increase even as the gas crisis is set to boost demand for crude to generate power.
Meanwhile, the reopening of major economies has unleashed pent-up demand for transportation fuel and all commodities used in manufacturing. That’s happening at a time when new mining and oil developments have stalled, China is replenishing crop stockpiles and bad weather is hurting top exporters of agricultural goods.
Aluminum and copper have surged because of short global supplies, and a drought in Brazil has pushed up the cost of coffee and sugar. Cotton futures last week rose to the highest in a decade because of poor weather and shipping bottlenecks, driving up costs for clothing around the world.
