(May 17 – 09:40 ET) – Scotiabank’s Commodity Price Index fell by 2.8% in April, its second straight monthly drop. Scotia blames the drop on fear that demand will fall off with interest rates rising and increasing energy prices.
“The Forest Products Index retreated in April as lower U.S. lumber and oriented strandboard prices more than offset widespread gains in pulp and paper,” said Patricia Mohr, vice president and commodities specialist at Scotia. However it expects to see those prices heading back up, possibly as early as July.
The metals also slid in April. Only zinc and cobalt held up, aluminium and copper were particularly hard hit by major hedge fund selling. Prices have since firmed a little.
Energy prices also eased as OPEC production hikes began to appear, although prices have firmed there too as Saudi Arabia, Venezuela and Mexico began hinting that they won’t boost production.
Only agriculture prices rose in April, thanks to big bacon demand at fast food outlets. Wheat, barley and canola are also up a little.
-IE Staff