The global commodity market saw a surge in prices at the end of 2020 and is predicted to continue recovering in 2021. The World Bank reported a 15% increase in oil prices and a 4.7% increase in non-energy prices (commodities not consumed as a fuel or transformed into another fuel) last month. Food prices surged by 2.6% in December, while metal prices increased by more than 10%.
Increasing demand and production are contributing to commodity price recovery. For instance, demand for steel and metals rose with the resumption of infrastructure projects across the globe that had been previously disrupted by COVID-19 shutdowns.
Populations across the world also have relatively more purchasing power after receiving checks from government relief packages. As the economy recovers, investors are optimistic, especially with the vaccines’ potential to change people’s health, mobility and the economy at large.