World Bank Predicts Further Drop In Prices Of Commodities

MOST indices slipped further during the first quarter of 2015, with food down 7.3 per cent, crude oil down 13 percent and metals down 9 percent compared to the fourth quarter of 2014.
Prices are expected to remain weak for the rest of 2015, with only a marginal recovery expected in 2016.
Director of the World Bank’s Development Prospects Group, Ayhan Kose said: “Surplus production and subdued demand due to weak global growth are continuing to depress commodity prices.
The slowdown in emerging economies, coupled with a strong U.S. dollar, will likely keep the lid on prices. Although weaker prices will mean lower revenues for commodity exporting countries, they will help reduce current account and fiscal deficits in many commodity-importing countries.”
Crude oil averaged $51.6 per barrel in the first quarter of 2015, down from $74.6 per barrel in the last quarter of 2014. However, prices appear to have stabilized during March and early April, as demand has been higher than expected, partly due to the effects of lower prices and cold weather.