OCTOBER 2020 Commodity
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Analysis https://www.worldbank.org/commodities A World Bank Report OCTOBER 2020 Commodity Markets OR ANY OTHER MEDIA USE UNTIL JANUARY 26, 2016, 10:00AM EST (1500 GMT) GMT) EMBARGOED: NOT FOR NEWSWIRE TRANSMISSION, POSTING ON WEBSITES, EMBARGOED: NOT FOR NEWSWIRE TRANSMISSION, POSTING ON WEBSITES, OR ANY OTHER MEDIA USE UNTIL JANUARY 26, 2016, 10:00AM EST (1500 Outlook Persistence of Commodity Shocks Apr Oct OCTOBER 2020 Commodity Markets Outlook © 2020 International Bank for Reconstruction and Development / World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved. This work is a product of the staff of the World Bank with external contributions. The findings, interpretations, and con- clusions expressed in this work do not necessarily reflect the views of the World Bank, its Board of Executive Directors, or the governments they represent. The maps were produced by the Map Design Unit of the World Bank. 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Table of Contents Acknowledgments ....................................................................................................................... v Executive Summary ..................................................................................................................... 1 Special Focus: Persistence of commodity shocks.............................................................................. 5 Commodity Market Developments and Outlook .......................................................................... 17 Energy ................................................................................................................................ 19 Agriculture .......................................................................................................................... 24 Fertilizers ............................................................................................................................ 30 Metals and Minerals ............................................................................................................. 31 Precious Metals ................................................................................................................... 33 Appendix A: Historical commodity prices and price forecasts.......................................................... 35 Appendix B: Supply-Demand balances......................................................................................... 43 Appendix C: Description of price and technical notes .................................................................... 75 Figures Figure 1 Commodity market developments .................................................................. 2 Figure SF.1 Commodity price indexes .......................................................................... 8 Figure SF.2 Price variation according to type of shock .................................................. 10 Figure SF.3 Transitory shocks.................................................................................... 11 Figure SF.4 Permanent shocks ................................................................................... 12 Figure 2 Oil market developments ............................................................................. 19 Figure 3 Oil supply .................................................................................................. 20 Figure 4 Oil market outlook ...................................................................................... 21 Figure 5 Natural gas and coal .................................................................................... 22 Figure 6 Agricultural price developments .................................................................... 25 Figure 7 Supply conditions for grains and edible oils .................................................... 26 Figure 8 Availability of supplies and risks .................................................................... 27 Figure 9 Beverage commodity market developments .................................................... 28 Figure 10 Agricultural raw materials market developments ............................................ 29 Figure 11 Fertilizer market developments.................................................................... 30 Figure 12 Metals and minerals market developments.................................................... 31 Figure 13 Precious metals market developments .......................................................... 33 iii Tables Table 1 Nominal price indexes and forecast revisions ............................................... 3 Annex Table SF.1Real commodity price decomposition ......................................... 14 Table A.1 Commodity prices .............................................................................. 37 Table A.2 Commodity prices forecasts in nominal U.S. dollars ............................... 39 Table A.3 Commodity prices forecasts in constant U.S. dollars (2010=100) ............. 40 Table A.4 Commodity price index forecasts (2010=100) ........................................ 41 iv Acknowledgments This World Bank Group Report is a product of the Prospects Group in the Equitable Growth, Finance, and Institutions (EFI) Vice Presidency. The report was managed by John Baffes under the general guidance of Ayhan Kose and Franziska Ohnsorge. Many people contributed to the report. John Baffes and Interpretation Services unit provided transla- and Alain Kabundi authored the Special Focus on tions of dissemination materials. the Persistence of Commodity Shocks. Section authors include Peter Nagle (energy), John Baffes The World Bank’s Commodity Markets Outlook is (agriculture), and Wee Chian Koh (fertilizers, published twice a year, in April and October. The metals, and precious metals). Jinxin Wu managed report provides detailed market analysis for major the report’s price database and accompanying commodity groups, including energy, agriculture, fertilizers, metals, and precious metals. Price figures. Maria Hazel Macadangdang produced the Supply-Demand balance section. Design and forecasts to 2030 for 46 commodities are presented, production was handled by Adriana Maximiliano. together with historical price data. The report also Graeme Littler produced the accompanying contains production, consumption, and trade website. statistics for major commodities. Commodity price data updates are published separately at the Bailey Adams, Betty Dow, Madhur Gautam, beginning of each month. Patrick Alexander Kirby, Graeme Littler, Flore The report and data can be accessed at: Martinant de Preneuf, Max Rudibert Steinbach, www.worldbank.org/commodities and Shane Streifel reviewed the report. Mark Felsenthal, Torie Smith, and Alejandra Viveros For inquiries and correspondence, email at: managed communications. Staff of the Translation [email protected] v COMMODITY MARKETS OUTLOOK | OCTOBER 2020 EXECUTIVE SUMMARY 1 Executive Summary Almost all commodity prices recovered in the third quarter of 2020 following steep declines earlier in the year due to the COVID-19 pandemic. Crude oil prices have doubled since their April low, supported by sharp oil supply cuts by OPEC+, but prices remain one-third lower than their pre-pandemic levels.