Scotiabank’s Commodity Price Index, which measures price trends in Canada’s major exports, advanced by a robust 5.2% in June to a level 21.9% above a year earlier.

“Commodity prices continue to rebound from weakness during the Iraq war,” said Patricia Mohr, vice president and commodities specialist, Scotia Economics.

“The Oil and Gas Index led the way – with a snap-back in Canadian natural gas export prices as well as stronger light and heavy crude oil. West Texas Intermediate oil prices – at US$31 per barrel in mid-July – have held up much better than most analysts had expected following the Iraq war,” Mohr commented.

She added that an advance the Metal and Mineral Index more than offset a marked decline in the Agricultural Index caused by plummeting cattle prices. “Prices in Alberta have plunged at least 60% since May 20, when one case of ‘mad cow’ disease was discovered in Alberta, triggering U.S. and Japanese import bans on Canadian beef,” Mohr said.

The Forest Products Index strengthened markedly in June as a rally in lumber and oriented strandboard prices more than offset weaker uncoated freesheet paper and largely unchanged pulp and newsprint prices.

“However, we continue to expect a sustained rally in pulp prices to get underway in the fourth quarter of 2003, with a more complete recovery in print-media advertising and stronger global paper demand,” said Mohr.