Industrial commodities prices to surge in 2017- World Bank
The World Bank has forecasted strong gains for industrial commodities like energy and metals in 2017; holding crude oil price forecast for the year at $55 per barrel, due to tightening supply and strengthening demand.
The Bank’s January 2017 Commodity Markets Outlook, said forecast for crude oil is a 29 percent jump from 2016. The energy price forecast assumes members of the Organization of the Petroleum Exporting Countries (OPEC) and other oil producers will partially comply with an agreement to limit production after a long period of unrestrained output.
A statement issued to the GNA said the Bank was raising its metals price forecast to an increase of 11 percent from the four percent rise anticipated in its October 2016 Outlook on further tightening of supply and strong demand from China and advanced economies.
John Baffes, Senior Economist and lead author of the Commodity Markets Outlook noted: “Prices for most commodities appear to have bottomed out last year and are on track to climb in 2017. However, changes in policies could alter this path.”
Agriculture prices as a whole are expected to rise by less than one percent in 2017. Small increases are anticipated for oils and oilseeds and raw materials, but grains prices were forecast to drop almost three percent on an improved supply outlook.
“Precious metals prices are seen declining seven percent as benchmark interest rates rise and safe-haven buying slows” the statement said
A Special Focus of the outlook showed how commodity-exporting emerging and developing economies have been hit hard by slowing investment growth, which has declined from 7.1 percent in 2010 to 1.6 percent in 2015.
Ayhan Kose, Director of the World Bank’s Development Prospects Group said investment weakness – both public and private – hindered a range of activity in commodity-exporting emerging market and developing economies.
“Most of these economies have limited policy space to counteract the slowdown in investment growth, so they need to employ measures to enhance the business environment, promote economic diversification, and improve governance to better growth prospects over the longer term,” noted Kose.
The World Bank’s Commodity Markets Outlook is published quarterly, in January, April, July and October and provides detailed market analysis for major commodity groups, including energy, metals, agriculture, precious metals and fertilizers. This edition extends price forecasts to 2030 for 46 commodities and provides historical price data.