Presentation of the World Bank Report - Commodity Markets Outlook July 2016: From energy prices to food prices: Moving in tandem?
Office National des Hydrocarbures et des Mines, Rabat.
The World Bank’s Commodity Markets Outlook is a quarterly report providing detailed market analysis for major commodity groups, including energy, agriculture, fertilizers, metals, and precious metals, in addition to a special focus section examining current topics and issues in commodity markets. Price forecasts to 2025 for 46 commodities are presented, together with historical price data. The report also contains production, consumption, and trade statistics for major commodities.
This report appears in a context where most commodity price indexes rebounded in the second quarter of 2016, continuing their upward climb from January lows on improved market sentiment and tapering supplies. Oil prices jumped by more than a third due to supply outages and strong demand. Given this rebound and expected reduction in inventories during the second half of the year, the crude oil price forecast for 2016 is being raised to $43 per barrel (bbl) from $41/bbl in the April assessment, still a 15 percent drop from 2015. Metals prices are projected to decline 11 percent in 2016, a slightly larger drop than anticipated in April, mainly driven by an ongoing surplus in the copper market. Agricultural prices for 2016 have been revised slightly upwards due to weather patterns in South America, but are still expected to register a marginal decline from last year. A large upward revision for precious metal prices of more than 8 percentage points versus the April assessment reflects the increased demand for safe haven assets. For 2017, a modest recovery is projected for most commodities as demand strengthens and supply tightens. This issue of the Commodity Markets Outlook examines the implications of low energy prices for food prices. It finds that, given the energy-intensive nature of agriculture, high energy prices were an important driver of the post-2006 surge in agricultural prices. Over 2011-16, lower energy prices are estimated to account for up to one-third of the projected 32 percent decline in prices of grains and soybeans.
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John Baffes
John Baffes is a Senior Economist at the World Bank. Currently, he manages the World Bank’s the Commodity Quarterly report. Other responsibilities include analysis and research on market structure and policy reforms, as well as maintenance of World Bank’s commodity-related data systems. Since joining the World Bank in 1993, he has worked in several area departments, including Latin America, South Asia, and Sub-Saharan Africa. His contributes appear frequently to World Bank and external publications, including academic journals and books. Mr. Baffes holds a B.S. (University of Athens, Greece), M.S. (University of Georgia, USA), and Ph.D. (University of Maryland, USA).