Fact or fiction: Are rising commodity prices behind higher inflation?

Is it the dawn of a new supercycle?

clock • 3 min read
Xian Chan
Image:

Xian Chan

As the economic recovery accelerates, a lot has been said about commodity prices and whether we are seeing the dawn of a new “commodities supercycle”.

At face value it is easy to assume this is at the heart of the recent pick-up in inflation, as conventional wisdom suggests that higher commodity prices automatically mean higher consumer prices. But as ever, the reality is more nuanced.  Soaring commodities There are several factors contributing to the rally in the price of commodities. First, there has been a strong recovery in demand, after a period of low activity in 2020. This is also known as the 're-basing' effect commentators often speak about.  Boom and bust: What impact has Covid-19 had on commodities cycle? Second, the...

To continue reading this article...

Join Investment Week

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Commodities

"Historically commodities have performed well amidst a rising inflationary and a higher interest rate environment"

Commodities Deep Dive: Time to cop some copper?

Sector is up 8.5% this year

clock 24 June 2022 • 6 min read
David Osfield of the EdenTree Responsible & Sustainable Global Fund
ESG

Windfall tax on utilities could distract from focus on the green economy

Not the same as oil and gas

David Osfield
clock 17 June 2022 • 3 min read
Partner insight: Effective risk management is vital in a time of crisis

Partner insight: Effective risk management is vital in a time of crisis

Supply chain transparency, research and a robust ESG rating framework are vital as the war in Ukraine continues, says Jenn-Hui Tan

Fidelity International
clock 16 June 2022 • 1 min read
Trustpilot