T O RO HE E W W T H D LBD LR KA N K A NB Global 93892 Global Development Commodity Finance Markets Charting Review a Global and Monthly Prices ($/metric ton) Recovery price forecast Annual Prices ($/metric ton) A I : Companion R E V I E W , A to N AGlobal A N D O U T L O Finance L Y S I S , Development O K 2009 2009 Global Commodity Markets World Bank Inside Left Side of Cover Global Commodity Markets World Bank Global Commodity Markets Review and price forecast A Companion to Global Development Finance 2009 Global Commodity Markets World Bank 4 Copyright 2009 The International Bank for Reconstruction and Development/The World Bank 1818 H Street N.W., Washington, D.C. 20433, USA Telephone: 202-473-1000 Internet: www.worldbank.org All rights reserved. Manufactured in the United States of America. 1234 12 11 1009 This volume is a product of the staff of the International Bank for Reconstruction and Development/ The World Bank. 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Global Commodity Markets World Bank Table of Contents 5 Global Commodity Outlook ...................................................................................................... 6 Key Commodities Aluminium ..................................................................................................................... 8 Cocoa ............................................................................................................................. 9 Coffee ........................................................................................................................... 10 Copper ......................................................................................................................... 11 Cotton .......................................................................................................................... 12 Gold ............................................................................................................................. 13 Maize ............................................................................................................................ 14 Nickel ......................................................................................................................... 15 Palm Oil ....................................................................................................................... 16 Petroleum .................................................................................................................... 17 Rice .............................................................................................................................. 18 Rubber ......................................................................................................................... 19 Soybeans ...................................................................................................................... 20 Sugar ............................................................................................................................ 21 Tea ............................................................................................................................... 22 Wheat ........................................................................................................................... 23 Appendices Appendix A: Prices and Forecasts Table A1: Commodity Price Data ............................................................................... 24 Table A2: Commodity Prices and Price Projections in Current Dollars ................... 26 Table A3: Commodity Prices and Price Projections in Constant 2000 Dollars ........ 27 Table A4: Weighted Indices of Commodity Prices and Inflation, 2000=100 ............ 28 Appendix B: Description of Price Series ........................................................................ 29 Appendix C: Definitions and Explanations ..................................................................... 31 Appendix D: Acronyms and Abbreviations .................................................................... 32 This report was prepared by Staff of the World Bank’s Development Prospects Group. Questions or comments should be e-mailed to gcm@worldbank.org or visit us on the web at http://www.worldbank.org/prospects Global Commodity Markets World Bank 6 Global Commodity Outlook The slowing of global growth, which preceded the fi- though non-OECD demand continued to grow during nancial crisis by several months, prompted commodity the first three quarters of 2008 (led by strong gains prices to start falling in mid-2008 (figure 1). The erup- in the Middle East), it too turned negative in the first tion of the full-blown crisis and the rapid drop-off in quarter of 2009. economic activity since September of that year accel- For 2009 as a whole, world oil demand is project- erated this process markedly. Demand for most com- ed to fall by 2.5 million barrels a day (mb/d), with modities (notably, in high-income industries and in continuing large falloffs in high-income countries and China) slowed or declined, particularly for oil and met- slight declines across most developing regions. Pro- als. By December 2008, crude oil prices had dropped duction by members of the Organization of the Petro- to $41 a barrel, down more than 70 percent from the leum Exporting Countries (OPEC) is being curtailed July peaks, while non-energy prices, including food, sharply, while non-OPEC oil deliveries are expected had declined by nearly 40 percent. Since December, to rise by only 0.2 mb/d this year. This, coupled with prices have firmed, with crude oil prices up to $69 on expectations of a slow recovery in global growth, has average in June 2009, and prices for foods and metals contributed to the recent recovery in oil prices. Prices up 22 and 13 percent, respectively. are expected to continue rising at a moderate pace over the medium term, with the weak pace of global Figure 1: Commodity Price Indices (2000=100) GDP and ample spare capacity precluding a rapid rise in oil prices. How successful OPEC is in cutting supply will affect outturns in the short term. The financial crisis and the steep falloff in economic activity have disrupted the development of long-term supply in the hydrocarbon sector. Smaller producers have been forced to scale back operations and several high-cost projects in the sector have been cancelled or deferred, notably oil sands projects in Canada. However, planned investment among the major com- panies has remained relatively high and their major projects, e.g., deepwater offshore, are expected to be completed. Moreover, the weaker investment demand Weak demand exerts pressure on crude oil prices has relaxed some of the acute constraints in the sup- The sharp decline in crude oil prices, from more than ply of investment inputs (oil rigs, materials, specialized $140 a barrel in July 2008, reflected weaker global equipment, and skilled labor), and, as a result, explo- demand and the relaxation of some refining capac- ration and exploitation costs have declined. Most of ity constraints that had contributed to high prices in the obstacles to future supply are “above-the-ground” the first half of the year. World crude oil demand fell constraints (as opposed to a shortage of oil in the 3.5 percent between the first quarter of 2008 and the ground)—such as access to reserves (three-fourths first quarter of 2009, with demand in OECD countries of the world’s reserves are controlled by national oil off 5.0 percent. The fall in demand reflected both the companies), political problems, and the reluctance of declines in industrial activity and the effects of high national oil companies to engage international com- oil prices during the first half of 2008 (figure 2). Al- panies to facilitate the extraction and discovery of re- serves. Nevertheless, all major oil-exporting countries Figure 2: World Oil Consumption (mb/d) are investing in new capacity, and Saudi Arabia has repeated its intention to maintain surplus capacity. Medium-term prospects are difficult to judge, and while the consensus is for a further spike in oil pric- es, this appears unlikely. High prices have stimulated development of alternative technologies, and pushed governments and consumers to use energy more ef- ficiently. Consumers’ shift away from fuel-inefficient cars, the mainstreaming of hybrid automobile tech- nologies, the recent passage of laws tightening U.S. energy efficiency standards, increasing environmental Global Commodity Markets World Bank 7 pressures—coupled with the modest pace of the ex- prices had increased the most. In particular, lower pected recovery—all argue against OPEC’s more than 6 crude oil prices coupled with pressure in many coun- mb/d in spare capacity being reabsorbed very quickly. tries to reconsider biodiesel mandates, has reduced the attractiveness of using edible oils for biodiesel pro- Demand for metals weakens; prices expected to remain soft duction—which is expected to stagnate in 2009—and Most metals prices peaked in March 2008 (nickel and contributed to a substantial decline in edible oil prices. zinc prices peaked much earlier), but the collapse of Overall, concerns about the adequacy of global economic growth and with it demand for many metals food supplies have subsided, and many of the export caused prices to drop much further into 2009. Prices bans and high export taxes that were put in place rebounded in recent months on strong import growth during the food price spike of 2008 have either been .into China—the world’s largest consumer (figure 3)— eliminated or substantially reduced. According to its mainly due to restocking. July 2009 update, the US Department of Agriculture expects stocks for key grains to increase by almost 3 Figure 3: World Metals Consumption (000 tonnes) percent in the coming season to reach levels similar to those associated with the low prices of early 2000s. Most of the price swings in agricultural raw materi- als reflect changes in rubber prices, which track the price of crude oil. Increased production and wider use of genetically modified cotton in China and India meant that the price of cotton did not increase dur- ing the boom, and in the past months the price has declined due to weak import demand from China, the world’s largest cotton user (and textile manufacturer). Prices of beverages declined 30 percent between their peak in June and December 2008, as the coffee and tea Metals prices are expected to be relatively stable markets appear to be well supplied. The cocoa market over the remainder of 2009, with most of the 41 per- has shown some tightness, mainly a reflection of infra- cent decline projected between 2008 and 2009 having structure bottlenecks in Côte d’Ivoire. already occurred. As a result, spending on new extrac- Looking forward, agricultural markets are likely to tion projects has been slashed, and output is declining remain well supplied, as stocks are beginning to re- because lower prices have rendered many difficult-to- turn to normal levels, although weather-related pro- exploit mines uncompetitive. The downturn has led duction problems (such as the recent drought in South to a buildup of spare capacity, which can be brought America) could always intervene. Easier market condi- back into production relatively easily, and should keep tions are likely to prevail the next few years as a sup- prices from rising by much when demand recovers. ply response has taken place in most commodities. As However, because prices have been just covering ex- a result, agricultural prices are anticipated to average ploitation costs, no further major declines in metals 21 percent lower in 2009 than in 2008 (figure 4), and prices are expected, with the possible exception of prices in 2010 are expected to remain broadly stable. copper, where prices remain above the marginal cost of production. Over the forecast period, metal prices Figure 4: Commodity Price Indices* (2000=100) are expected to remain broadly stable—rising in line with inflation in 2010 as demand recovers. Prices of agricultural commodities fall to pre-crisis levels Following their peak in June 2008, prices of most ag- ricultural commodities have fallen to pre-crisis levels as improved supplies resulting from favorable harvests have boosted global stocks of most agricultural com- modities. This, along with weaker demand for interna- tionally traded food commodities, has allowed prices to fall back to their December 2007 levels—with the largest declines among agricultural products whose Global Commodity Markets World Bank 8 Aluminium Aluminum prices are expected to bottom in 2009, and Global demand, which had been growing by 6 per- rise from 2010 onwards due to rising demand and re- cent p.a. this decade, grew only slightly in 2008, and duction in China’s net export position. In the near- plunged an estimated 20 percent in the first quarter of term, prices will remain under downward pressure 2009. The transportation and construction sectors ac- from large inventories and surplus capacity, with risk count for half of aluminum end-use, and these sectors of price-pressures being extended unless there are fur- were particularly affected by the slump in autos and ther reductions in capacity. housing. Aluminum prices fell in the second half of 2008 Low prices are expected to result in further produc- and early 2009 on slumping global demand and record tion cuts, particularly in China, and the government is levels of stocks. This induced significant production expected to slow the country’s rapid growth in capacity cuts, particularly in China which accounted for one- and exports. In the medium-to-long term, the industry third of global refined production in 2008. Stockpiling will face rising power prices from higher energy costs, by China’s State Reserves Bureau in 2009 lifted domes- deregulated markets, and removal of subsidies. Future tic prices above international prices, leading to China supply growth will come from regions that have low- suddenly becoming a net importer. Higher prices also cost power sources, (hydro power or abundant fossil prevented capacity from being shut and some opera- fuels), e.g., Iceland, the Middle East, Russia and India. tions to be reactivated. The latter also has abundant bauxite resources. Monthly Prices ($/metric ton) Annual Prices ($/metric ton) Global market data 2005 2006 2007 2008 2005 2006 2007 2008 PRODUCTION (000 metric tons) EXPORTS (000 metric tons) China 7,806 9,358 12,559 13,177 Russian Fed. 2,740 3,164 3,949 4,818 Russian Fed. 3,647 3,718 3,955 4,187 Canada 2,240 2,360 2,501 2,532 Canada 2,894 3,051 3,083 3,119 Australia 1,588 1,624 1,659 1,683 US 2,480 2,281 2,560 2,659 Norway 1,513 1,539 1,610 1,591 Australia 1,903 1,929 1,959 1,974 China 1,324 1,213 546 841 Brazil 1,498 1,605 1,655 1,661 Iceland 284 303 446 761 Norway 1,376 1,427 1,357 1,359 Brazil 753 842 823 748 India 942 1,105 1,222 1,308 South Africa 671 601 625 598 South Africa 851 887 898 1,084 Netherlands 482 609 795 483 UAE 850 789 890 892 Germany 392 432 423 435 World 31,995 33,969 38,087 39,425 World 17,023 17,706 18,906 19,308 CONSUMPTION (000 metric tons) IMPORTS (000 metric tons) China 7,119 8,648 12,347 12,413 Japan 2,977 3,036 2,986 3,064 US 6,114 6,150 5,580 5,615 US 3,691 3,461 2,951 2,932 Japan 2,276 2,323 2,197 2,250 Germany 1,770 2,073 2,231 2,063 Germany 1,758 1,823 2,008 1,950 Korea, Rep. 1,231 1,204 1,190 1,086 India 958 1,079 1,207 1,305 Italy 890 986 1,079 882 Russian Fed. 1,020 1,047 1,020 1,020 Turkey 383 414 572 598 Korea, Rep. 1,201 1,153 1,081 965 Belgium 763 738 754 558 Italy 977 1,021 1,087 951 Netherlands 656 971 1,043 554 Brazil 759 773 854 932 France 517 593 587 509 Canada 801 846 718 714 Taiwan, China 523 540 504 504 World 31,720 34,026 37,578 37,796 World 18,318 19,254 19,334 17,894 Source: World Metal Statistics Global Commodity Markets World Bank Cocoa 9 The cocoa price indicator averaged $2.54/kg during Grindings, are expected to reach 3.6 million tons Jan-May 2009, 1% higher compared to the respective in 2008/09, similar to last season’s total. Among key 2008 average. Cocoa is one of the few agricultural processors, only Côte d’Ivoire will increase its grind- commodities whose prices did not decline during this ings (from 360 to 390 thousand tons); this is consistent period, a reflection of persistent supply problems. Es- with efforts by a number of cocoa producing countries timates for the current (Oct 08 to Sep 09) crop indicate to capture an increasing share of value added activities that it will be 3.5 million tons, 4% lower than 2007/08, in the production chain. Most other processors will further contributing to an already tight market. Grind- experience moderate declines. ings, a measure of demand, are projected to exceed In view of a tight cocoa market, prices are likely to production for a third season in a row. As of April, remain elevated by historical standards. Specifically, cumulative arrivals at the port of Abidjan were 15% they are expected to average $2.60/kg in 2009 and lower than a year ago--Côte d’Ivoire accounts for more decline to $2.40/kg in 2010. In the longer-term they than a third of global supplies. The deterioration of are projected to decline even further as supplies in Côte d’Ivoire’s infrastructure appears to have been the key producing countries will catch up and eventually key reason behind the lack of supply response as it account for Côte d’Ivoire’s shortfall. This forecast de- has become very expensive to move inputs to farmers pends on political developments (as well as infrastruc- and transport cocoa beans to the port. ture investments) in Côte d’Ivoire. Monthly Prices ($/kg) Annual Prices ($/kg) Global market data 2005/06 2006/07 2007/08 2008/09 2004/05 2005/06 2006/07 2007/08 PRODUCTION (000 metric tons) NET EXPORTS (000 metric tons) Côte d'Ivoire 1,557 1,422 1,431 1,250 Côte d'Ivoire 950 1,006 851 893 Ghana 660 555 730 700 Ghana 548 570 620 571 Indonesia 575 525 500 520 Indonesia 361 493 416 388 Nigeria 214 185 200 210 Nigeria 186 190 166 201 Cameroon 172 170 188 195 Cameroon 165 146 140 168 Brazil 162 126 160 162 Togo 53 73 78 96 Ecuador 113 115 115 112 Ecuador 81 89 99 81 Togo 73 78 80 79 PNG 47 51 47 53 PNG 51 47 49 50 World 2,495 2,740 2,559 2,578 Dominican Rep. 42 42 40 41 IMPORTS (000 metric tons) Colombia 37 30 38 35 Netherlands 608 549 639 635 Malaysia 27 28 32 32 Malaysia 233 300 337 356 World 3,762 3,421 3,663 3,506 Germany 236 287 347 349 GRINDINGS (000 metric tons) US 514 505 380 322 Netherlands 455 467 470 465 France 153 157 165 172 Côte d'Ivoire 336 360 360 390 Belgium 182 190 195 156 US 426 414 384 365 UK 129 139 129 126 Germany 307 357 385 349 Spain 72 76 83 106 Malaysia 276 301 310 285 Singapore 64 70 89 95 Brazil 223 224 233 231 Canada 65 77 48 77 France 155 162 165 168 Turkey 57 65 49 71 Ghana 85 121 140 154 Russian Fed. 68 70 65 66 World 3,536 3,659 3,697 3,620 World 2,891 2,997 3,080 3,037 Note: Latest trade data available are for 2007/08. Source: International Cocoa Organization, LMC International and World Bank estimates. Global Commodity Markets World Bank 10 Coffee Coffee prices averaged $2.96/kg (arabica) and $1.72/ Global coffee consumption is estimated to have kg (robusta) during Jan-May 2009, 8% and 30% lower reached 128 million bags during calendar 2008. Histor- than their respective 2008 averages. The decline re- ically, coffee consumption has grown by about 2% per flects a good 2008/09 crop which is 8% higher than annum (consistent with population growth), a trend last season’s 118 million bags (yet much lower than that is likely to continue. Moreover, because coffee the January 2009 forecast of 140 million bags). Most of consumption is characterized by low income elasticity, the increase will come from Brazil whose output will the current economic downturn is unlikely to have a reach a record 46 million bags. Colombia’s production- significant impact on demand. Although there are re- -which has been remarkably stable at 12 million bags ports of reduced coffee consumption in some Eastern historically--is experiencing a sharp decline to 10.5 mil- European countries, their effect on the market is likely lion bags. On the robusta side, the two dominant sup- to be minimal because of their small share in glob- plies, Vietnam and Indonesia, are experiencing reduc- al demand. In view of current season’s good arabica tions as well (3% and 25%, respectively). Thus, global supply prospects and barring an unfavorable weather arabica output will increase to 82.2 million bags, up event, arabica prices are expected to average $2.90/kg from last season’s 72.1 million bags while robusta will in 2009 and $2.70/kg in 2010. Tighter robusta supplies, decline to 44.8 million bags, from last season’s 45.8 however, may exert some upward pressure on prices, million bags. hence they are expected to average $1.75/kg in 2009 and $1.80/kg in 2010. Monthly Prices ($/kg) Annual Constant 2000 Prices ($/kg) Global market data 2005/06 2006/07 2007/08 2008/09 2005 2006 2007 2008 PRODUCTION (000 bags) CONSUMPTION (000 bags) Brazil 32,945 42,512 36,070 45,992 US 20,998 20,667 21,033 21,655 Vietnam 13,542 19,340 16,467 16,000 Brazil 15,390 16,133 16,927 17,856 Colombia 12,329 12,153 12,515 10,500 Germany 8,665 9,151 8,627 9,554 Ethiopia 4,003 4,636 4,906 6,133 Japan 7,128 7,268 7,282 7,065 Indonesia 9,159 7,483 7,751 5,833 Italy 5,552 5,593 5,799 5,937 Mexico 4,225 4,200 4,150 4,650 France 4,787 5,278 5,628 5,093 India 4,396 5,079 4,148 4,610 Russian Fed. 3,212 3,263 4,055 3,510 Peru 2,419 4,249 2,953 4,102 Spain 3,007 3,017 3,198 3,485 Honduras 3,204 3,461 3,842 3,833 Indonesia 2,375 2,750 3,208 3,333 Uganda 2,159 2,700 3,250 3,500 Canada 2,794 3,098 3,535 3,142 Guatemala 3,676 3,950 4,100 3,370 UK 2,680 3,059 2,824 3,068 Côte d'Ivoire 1,962 2,847 2,150 2,500 Mexico 1,556 1,794 2,050 2,200 Nicaragua 1,718 1,300 1,700 1,600 Algeria 1,892 1,836 1,968 1,899 Costa Rica 1,778 1,580 1,791 1,594 Ethiopia 1,833 1,833 1,833 1,833 El Salvador 1,502 1,371 1,626 1,369 Nethrlands 1,927 2,129 2,292 1,578 Kenya 660 826 652 950 Colombia 1,272 1,337 1,360 1,430 Tanzania 804 822 810 917 Korea, Rep. 1,394 1,437 1,425 1,419 PNG 1,268 807 968 850 Sweden 1,170 1,315 1,244 1,211 Thailand 999 766 653 825 Poland 2,267 1,953 1,531 1,190 World 110,131 127,653 117,882 127,005 Finland 1,102 1,047 1,057 1,115 Arabica 67,853 79,254 72,118 82,202 India 917 917 989 1,060 Robusta 42,278 48,399 45,764 44,802 World 118,891 122,304 126,549 128,000 Source: International Coffee Organization Global Commodity Markets World Bank Copper 11 Copper prices are expected to retreat from this year’s World copper demand, which grew 2.5 percent be- highs, as prices remain well above the costs of pro- tween 2000 and 2007, fell 2 percent in 2008, mainly in duction. From 2010 onwards, prices are expected to industrial countries. Consumption (net of stocking) is rise moderately as production struggles keeps pace estimated to have fallen more than 15 percent in the with relatively strong growth in demand—particularly first quarter, largely due to the slump in construction in China. and autos. Prices remained elevated during the boom far lon- Copper mine capacity growth is set to grow mod- ger than for other metals due to a host of supply prob- erately in future but the industry faces a number of lems. These included labor disputes, declining ore hurdles. These include a limited number of big mines grades, project delays, and lack of equipment, skilled in the pipeline worldwide, a general decline in ore labor, energy and raw materials. Prices fell sharply in grades at existing large operations, and other opera- the second half of 2008 as demand slumped, but ral- tional difficulties. The world will increasingly rely on lied substantially in the first part of 2009 due to record Africa’s revived copper belt for new supply over the imports into China, the result of large stocking by gov- coming decade. However, the region poses a num- ernment and industry, as well as shrinking scrap sup- ber of challenges with respect to labor, power, and plies. As stocking ends, however, prices are expected flooding, as well political risks regarding licensing and to recede. contracts. Monthly Prices ($/metric ton) Annual Prices ($/metric ton) Global market data 2005 2006 2007 2008 2005 2006 2007 2008 PRODUCTION (000 metric tons) EXPORTS (000 metric tons) China 2,600 3,003 3,499 3,779 Chile 2,799 2,606 2,910 3,004 Chile 2,824 2,811 2,937 3,060 Zambia 423 476 491 585 Japan 1,395 1,532 1,577 1,540 Japan 248 320 428 423 US 1,260 1,250 1,310 1,275 Peru 514 449 365 419 Russian Fed. 968 959 923 926 Australia 315 287 295 357 Germany 638 662 666 690 Kazakhstan 401 357 349 344 India 518 627 719 669 Poland 290 288 240 297 Zambia 446 497 522 605 Canada 297 280 298 290 Korea, Rep. 527 575 585 573 Belgium 241 237 201 260 Poland 560 557 533 527 Russian Fed. 301 262 275 207 World 16,610 17,343 17,980 18,475 World 7,454 7,477 7,618 7,838 CONSUMPTION (000 metric tons) IMPORTS (000 metric tons) China 3,656 3,614 4,863 5,134 China 1,222 827 1,496 1,458 US 2,257 2,096 2,140 1,933 Germany 625 881 844 833 Germany 1,115 1,398 1,392 1,398 US 977 1,076 832 721 Japan 1,229 1,282 1,252 1,184 Italy 652 774 746 617 Korea, Rep. 868 828 858 852 Taiwan, China 640 647 615 585 Russian Fed. 667 693 688 731 France 517 507 432 434 Italy 680 801 764 635 Korea, Rep. 428 380 420 406 Taiwan, China 638 643 603 582 Turkey 224 150 288 288 India 397 407 516 511 Thailand 235 268 245 265 France 472 460 337 379 Brazil 168 175 218 252 World 16,639 16,974 18,098 18,032 World 6,994 7,051 7,129 6,766 Source: World Metal Statistics Global Commodity Markets World Bank 12 Cotton The Cotlook A index averaged $1.22/kg during Jan- Among key suppliers, China is expected to reduce Apr 2009, 27% lower than the corresponding 2008 its output by 0.5 million tons most of which will be average of $1.70/kg, a decline reflecting mostly weak balanced by India. Overall the cotton market appears demand. Although such decline is in line with the to be well-supplied, thus ruling out large price in- agriculture index (down 24% during this period), cot- creases in the medium term. There are some signs of ton price increases during the 2008 rally were less demand strengthening, especially in China, hence the pronounced than other commodities, because of a Cotlook A Index is expected to average $1.25/kg dur- well-supplied global market due to increased yields ing 2009, slightly above the Jan-Apr 2009 average but (up 20% during the past 5 years) by users of geneti- lower than $1.57/kg in 2008. Moderate price increases cally modified (GM) seeds. Such yield increases took are expected for 2010 and 2011 as well. place in the backdrop of diversion of cotton area to Area allocated to GM cotton reached 48% during biofuel crops. 2008/09, corresponding to 54% of global production. The International Cotton Advisory Committee ex- Apart from Australia, South Africa, and the US with pects global cotton production to be 23.5 million tons adoption rates exceeding 90%, the two key beneficia- in 2009/10. This is similar to the 2008/09 season’s out- ries of the GM technology have been China and India put of 23.7 million tons but 11% less than the record with adoption rates of 70% and 75%. If other major 2007/08 crop. Consumption is expected to be 23.7 mil- producers (e.g., Brazil, Pakistan, and Turkey) embrace lion tons, thus maintaining the stocks-to-use ratio at the technology soon, prices may come under down- 53%, much higher than the historical average of 40%. ward pressure in the medium and longer terms. Monthly Prices ($/kg) Annual Prices ($/kg) Global market data 2006/07 2007/08 2008/09 2009/10 2006/07 2007/08 2008/09 2009/10 PRODUCTION (000 metric tons) EXPORTS (000 metric tons) China 6,729 8,078 8,025 7,473 US 3,048 2,973 2,555 2,308 India 4,590 5,355 4,930 5,358 Uzbekistan 957 887 550 831 US 4,731 4,182 2,838 2,985 Brazil 300 486 480 347 Pakistan 2,115 1,845 1,920 1,934 Australia 483 270 230 289 Brazil 1,381 1,603 1,402 1,176 Turkmenistan 167 185 120 199 Uzbekistan 1,100 1,206 1,060 1,092 Burkina Faso 309 194 156 198 Turkey 850 675 450 409 Greece 243 234 161 157 Australia 253 126 315 348 Tanzania 73 76 56 125 Turkmenistan 260 280 297 294 Zimbabwe 99 91 81 107 Syria 225 250 220 232 World 8,514 8,358 6,176 7,272 Greece 300 285 240 195 IMPORTS (000 metric tons) Burkina Faso 300 150 182 191 China 2,901 2,511 1,500 2,110 Egypt 213 212 118 142 Pakistan 500 786 450 653 Argentina 177 152 130 134 Turkey 710 700 470 611 World 25,312 26,280 23,698 23,466 Bangladesh 453 600 551 585 STOCKS (000 metric tons) Indonesia 455 495 435 443 China 2,551 3,328 3,226 3,117 Thailand 430 420 410 399 India 1,403 1,541 2,223 2,462 Mexico 321 333 266 315 US 1,915 2,155 1,654 1,541 Vietnam 164 240 239 253 Brazil 1,095 1,224 949 862 Russian Fed. 282 233 200 190 Pakistan 855 601 689 701 Taiwan, China 259 215 185 189 Uzbekistan 287 384 655 677 Korea, Rep. 230 212 190 181 World 11,295 12,202 12,583 12,494 World 8,514 8,289 6,176 7,272 Source: International Cotton Advisory Committee Global Commodity Markets World Bank Gold 13 Gold prices are expected to remain relatively firm in The second 5-year Central Bank Gold Agreement the near term due to investor concerns about the dol- (CBGA), which limits annual sales to 500 tonnes, ends lar and macroeconomic and financial conditions. Over in September 2009 and is expected to be rolled over the longer term gold prices are expected to fall back for a third 5-year agreement. If and when the IMF sells toward $700/toz as high prices discourage demand up to 400 tonnes of gold it has earmarked to help with and stimulate new supplies. operating costs, it is to be used as part of a CBGA. Gold prices fell from a peak of $1000/toz in 2008 Gold is the one commodity where essentially all to under $750/toz in November due to dollar appre- production ends up in above-ground inventory, con- ciation and investor liquidation to raise to cash. How- sequently investor sentiment remains a key determi- ever, gold prices have risen back above $900/toz on nant of prices. High prices will restrain physical de- strong investment demand in the form of exchange mand, and stimulate new supplies from mines and traded funds, bars and coins. However prices have not scrap. Mine supply is projected to rise modestly, as pushed higher because physical jewelry demand has prices are expected to remain conducive to expand- fallen sharply, particularly in Asia and the Middle East, ing capacity. While producer hedging has fallen, new and consumers in all regions are returning physical projects may require hedging for project finance, gold to the market in the form of scrap. thereby adding to supply. Monthly Prices ($/troy ounce) Annual Prices ($/troy ounce) Global market data 2005 2006 2007 2008 2005 2006 2007 2008 PRODUCTION (metric tons) CONSUMPTION (metric tons) US 256 252 239 229 India 695 633 684 578 China 209 240 270 222 China 258 270 327 342 South Africa 297 275 255 220 Turkey 303 242 277 237 Australia 263 247 245 215 Italy 285 227 218 180 Peru 208 203 170 180 US 219 211 179 176 Russian Fed. 163 159 157 157 Japan 164 175 178 164 Canada 121 104 102 96 Saudi Arabia & Yemen 125 90 100 87 Ghana 67 70 76 79 Korea, Rep. 83 82 86 78 Uzbekistan 84 77 73 73 Russian Fed. 61 65 79 76 PNG 69 54 56 67 Egypt 71 50 57 65 Indonesia 139 80 105 63 Indonesia 87 65 63 61 Mexico 30 39 44 50 Switzerland 56 61 62 59 Brazil 38 43 50 49 Malaysia 74 58 61 57 Mali 44 50 40 41 UAE 55 47 49 46 Chile 40 42 42 39 Germany 50 49 49 46 Argentina 28 44 42 38 Pakistan 64 54 50 44 Philippines 38 36 39 37 Iran, Islamic Rep. 41 36 41 41 Tanzania 48 41 40 37 Thailand 69 53 48 40 Colombia 36 16 15 34 Canada 27 22 22 40 Kazakhstan 18 21 21 21 Singapore 30 29 30 28 Guinea 14 11 13 20 Taiwan, China 32 31 30 28 Kyrgyzstan 16 9 9 17 Austria 9 6 7 26 World 2,434 2,316 2,281 2,161 World 3,291 2,936 3,076 2,850 Source: World Metal Statistics, Gold Field Mineral Services Global Commodity Markets World Bank 14 Maize Maize prices averaged $170/ton during Jan-May 2009, Global maize production is expected to remain 40% lower than its all time high of June 2008. The virtually unchanged in 2009/10, according to the May sharp decline is linked to lower biofuel demand and 2009 US Department of Agriculture update. A signifi- to a lesser extent weakening in global demand for cant production shortfall in the EU will be balanced by feedgrains due to contraction in livestock production. production increases in Brazil and Argentina. Global The decline in crude oil prices has reduced the profit- exports will increase by four million tons, to be ac- ability of the US ethanol industry, in turn leading to a counted in their entirety by the US while stocks are number of ethanol plants either being closed or reduc- expected to decline to 128 million tons in 2009/10, ing capacity. The US is the world’s largest maize-based down from 139.6 million tons in 2008/09, thus pushing ethanol producer. However, the U.S. Energy Indepen- the stock-to-use ratio down from 0.18 to 0.16. Maize dence and Security Act of 2007 mandates a 10.2% re- prices are expected to average $165/ton during 2009 newable fuel standard for 2009 (roughly correspond- with only modest increases taking place in the next ing to 11 billion gallons) implying that, if this standard few years. In real terms, maize prices are expected is binding, a considerable amount of maize will be to average 30% higher compared to the first half of diverted to the ethanol industry, thus keeping prices the current decade when ethanol was not a significant elevated by historical standards. component of maize use. Monthly Prices ($/metric ton) Annual Prices ($/metric ton) Global market data 2006/07 2007/08 2008/09 2009/10 2006/07 2007/08 2008/09 2009/10 PRODUCTION (000 metric tons) EXPORTS (000 metric tons) US 267,503 331,177 307,386 307,100 US 53,987 61,873 44,452 48,262 China 151,600 152,300 165,500 162,500 Brazil 10,836 7,791 10,000 10,000 EU-27 53,829 47,506 62,380 56,902 Argentina 15,309 15,000 7,000 9,000 Brazil 51,000 58,600 50,500 54,000 Ukraine 1,027 2,074 4,500 2,500 Mexico 22,350 23,600 25,000 24,000 EU-27 664 591 2,000 2,000 India 15,100 18,960 17,000 18,500 South Africa 468 2,200 2,500 2,000 Argentina 22,500 22,000 13,000 15,000 World 93,931 98,813 76,934 81,142 South Africa 7,300 13,164 12,000 11,500 IMPORTS (000 metric tons) Canada 8,990 11,649 10,600 10,300 Japan 16,713 16,614 16,500 16,300 Indonesia 7,850 8,500 8,700 9,000 Korea, Rep. 8,731 9,311 7,000 7,500 Ukraine 6,400 7,400 11,400 8,500 Mexico 8,944 9,556 7,000 7,500 Nigeria 7,800 6,500 7,900 8,300 Egypt 4,826 4,151 3,700 4,200 Russia 3,600 3,950 6,600 7,000 Taiwan, China 4,283 4,527 4,000 4,000 Philippines 6,231 7,277 6,900 6,900 Colombia 3,386 3,267 2,800 2,900 World 712,203 791,626 787,831 785,139 Iran, Islamic Rep. 3,300 2,900 2,700 2,900 STOCKS (000 metric tons) Malaysia 2,363 3,181 2,000 2,600 China 36,602 39,394 52,694 56,744 EU-27 7,056 14,016 2,500 2,500 US 33,114 41,255 40,652 29,094 Canada 2,102 3,182 1,600 2,400 Brazil 3,592 12,579 9,079 8,079 Algeria 2,406 1,963 1,900 2,100 EU-27 7,382 4,913 6,193 4,495 Chile 1,756 1,321 2,000 1,900 Mexico 3,084 4,131 3,831 3,081 Syria 1,516 1,691 1,800 1,900 South Africa 1,661 3,475 3,275 2,875 Saudi Arabia 1,577 1,961 1,700 1,800 World 109,002 130,347 139,579 128,193 World 90,787 98,295 75,598 79,326 Source: US Department of Agriculture Global Commodity Markets World Bank Nickel 15 Nickel prices peaked in May 2007 above $54,000/ton Plunging prices in the second half of 2008 fell deep and by December 2008 had plunged to near $9,000/ into the industry’s cost curve and led to a fairly rapid ton due to the slump in stainless steel demand. Prices contraction in nickel capacity. These were a mix of have largely stabilized on sizeable cutbacks in produc- closures and project deferrals of both mines and smelt- tion, and prices are expected to increase moderately in ing capacity, and includes the large Ravensthrope proj- future to encourage sufficient production to meet the ect commissioned last year. A high-cost casualty was projected strong growth in consumption. the Chinese nickel pig iron industry which sprang up The slump in nickel demand caused LME inven- during the surge in nickel prices, and typically requires tories to rise from a scant 3,000 tons in 2007 to more a nickel price of some $25,000/ton to break even. than 114,000 tons at end-April 2009, the highest in The shut-in and deferred projects will be needed 14 years. Stainless steel production—which accounts in the future as demand recovers and inventories are for 70 percent of nickel useage—typically grows at drawn. A long-term concern is that few new nickel some 5-6 percent, but exhibits large swings, resulting sulphide projects are being discovered due to re- in lengthy periods of large stocking and de-stocking. source exhaustion, the last significant operation being Global stainless steel production declined by nearly Voisey’s Bay in Canada. These will have to be replaced 8 percent in 2008, the second consecutive year of by higher-cost nickel laterite deposits that are more contraction. complex to bring on-line. Monthly Prices ($/metric ton) Annual Prices ($/metric ton) Global market data 2005 2006 2007 2008 2005 2006 2007 2008 PRODUCTION (000 metric tons) CONSUMPTION (000 metric tons) Russian Fed. 268 274 267 264 China 195 234 328 305 Canada 140 154 163 176 Japan 180 181 196 185 China 95 132 220 171 US 135 144 118 121 Japan 164 152 161 156 Germany 116 106 110 90 Australia 122 116 114 108 Korea, Rep. 118 93 71 73 Norway 85 82 88 89 Taiwan, China 84 107 76 69 Finland 39 47 55 51 Italy 60 68 64 68 Cuba 44 42 44 44 Belgium 49 58 55 47 Colombia 53 51 49 42 South Africa 47 54 44 44 UK 38 37 34 39 Finland 49 51 40 41 New Caledonia 47 49 45 37 Spain 48 53 41 41 South Africa 42 42 38 32 UK 32 32 32 32 Brazil 30 31 32 31 Sweden 35 36 34 31 Ukraine 13 16 21 25 France 32 32 31 28 Dominican Rep. 29 30 29 20 Russian Fed. 26 26 26 26 Indonesia 7 14 19 18 Brazil 26 25 22 25 Greece 19 18 19 17 India 16 18 19 21 Macedonia 8 11 15 15 Canada 5 5 5 5 France 13 14 15 13 Singapore 4 4 4 4 Zimbabwe 16 13 14 11 Turkey 3 1 1 4 Venezuela 17 17 16 11 Austria 7 8 3 3 World 1,288 1,341 1,456 1,368 World 1,296 1,366 1,353 1,295 Source: World Metal Statistics Global Commodity Markets World Bank 16 Palm Oil Palm oil prices averaged $645/ton during Jan-May Import demand is expected to increase by 11% dur- 2009, 45% down from their $1,170/ton average of the ing 2008/09 with most of that growth taking place in same period last year. In addition to strong import de- China, India and to a lesser extent the EU. (More than mand, especially by India, and increased use of com- three-quarters of global palm oil is internationally trad- peting oils for biofuel use (mainly rapeseed oil), last ed). Stock-to-use ratio during 2008/09 will reach 14%, year’s rally may have had an element of overshooting. about 2 percentage points lower than historical levels. Therefore, the sharp decline should be viewed as a Virtually all edible oils experienced unprecedented correction, in addition to a change in fundamentals. price increases during the first half of 2008, not seen According to Oil World, global palm oil output is ex- since the early 1973. They declined sharply, however, pected to reach 44.5 million tons in 2008/09 (October during the second half of 2008 and they are now more to September), 5% higher than 2007/08. Global soy- in line with fundamentals. In view of a tight soybean bean oil production (close substitute to palm oil) is market due to supply reductions in South America, estimated at 36.1 million tons during 2008/09, down early signs of demand pick up, and restrain in biofuel from 37.6 million tons during 2007/08. The decline in mandates in several countries, especially in the EU, soybean oil production is due to weather problems in palm oil prices are expected to average $650/ton in South America, especially Brazil and Argentina, which 2009, and marginally higher in 2010. account for 45% of global soybean supplies. Monthly Prices ($/ton) Annual Prices ($/ton) Global market data 2005/06 2006/07 2007/08 2008/09 2005/06 2006/07 2007/08 2008/09 PRODUCTION (000 metric tons) EXPORTS (000 metric tons) Indonesia 15,520 16,730 18,880 20,250 Malaysia 13,718 13,768 15,041 15,950 Malaysia 15,486 15,294 17,567 17,961 Indonesia 11,590 12,465 14,100 15,900 Thailand 795 989 1,123 1,218 PNG 317 406 384 405 Colombia 815 830 850 883 Thailand 132 327 399 335 Nigeria 693 752 779 793 Colombia 219 281 318 235 Ecuador 335 409 404 439 World 28,119 29,638 32,842 35,420 World 36,024 37,591 42,323 44,493 IMPORTS (000 metric tons) CONSUMPTION (000 metric tons) China 5,182 5,543 5,559 6,150 China 5,210 5,461 5,690 6,140 India 2,820 3,664 5,019 5,830 India 2,855 3,698 4,884 5,730 EU-27 4,534 4,634 5,084 5,453 EU-27 4,426 4,478 4,886 5,270 Pakistan 1,728 1,743 1,758 1,850 Indonesia 3,680 3,920 4,362 4,853 US 604 692 955 1,170 Malaysia 2,181 2,132 2,449 2,752 Bangladesh 823 871 855 950 Pakistan 1,597 1,638 1,748 1,800 Egypt 669 716 508 690 Nigeria 1,014 1,042 1,107 1,125 Iran, Islamic Rep. 352 419 611 620 US 567 635 940 1,100 Japan 497 516 551 550 Thailand 684 700 781 837 World 28,146 29,366 32,817 35,234 Colombia 492 467 457 605 STOCKS (000 metric tons) Egypt 580 598 480 580 Indonesia 1,410 1,780 2,230 1,760 Russian Fed. 540 527 680 560 Malaysia 1,799 1,461 1,951 1,680 Japan 498 509 550 549 India 342 350 540 700 Turkey 516 401 443 490 China 390 472 340 350 World 35,415 37,256 41,200 44,920 World 5,726 5,812 6,956 6,343 Source: Oil World, Hamburg, Germany and US Department of Agriculture Global Commodity Markets World Bank Petroleum 17 Crude oil prices are projected to rise to $75/bbl (in World oil demand fell in 2008, the first decline in constant 2008 dollars) in 2015, with nominal prices 25 years. Demand plunged in the fourth quarter and rising from $48/bbl in 2009 to $82/bbl in 2020. The by a steeper 3.7 percent in the first quarter of this year, price forecast is based on high-cost oil sands develop- with a drop of more than 6 percent in the OECD, and ment in Canada, and assumes continued production smaller decreases in a number of developing country restraint by major oil producers. regions, including China. Oil demand growth is ex- Oil prices stabilized above $40/bbl in early 2009 pected to be moderate in future, tempered by environ- following the 70 percent plunge in the second half of mental concerns and efficiency gains. 2008. OPEC has taken 4 mb/d oil off the market since Non-OPEC supplies fell in 2008, and further de- mid-2008 in an effort to stem the slide, but stocks have clines are projected for 2009. Lower prices have re- remained high, in large part due to the sharp contrac- duced capital expenditures and a number of higher- tion in demand. OPEC spare capacity has surged to cost projects have been cancelled or deferred, notably nearly 7 mb/d, and is expected to help keep prices in Canada. However costs are also falling, and sup- moderate over the medium term. However, invest- ply is expected to grow again from 2009 onwards, ment in new capacity has fallen, and sluggish growth bolstered by ongoing technological advances and im- will allow prices to gradually rise to bring on high- proved fiscal terms as countries seek to attract invest- cost supplies. ment to expand capacity. Monthly Prices ($/barrel) Annual Prices ($/barrel) Global market data 2005 2006 2007 2008 2005 2006 2007 2008 PRODUCTION (000 b/d) CONSUMPTION (000 b/d) Saudi Arabia 10,604 10,447 9,988 10,406 US 20,802 20,687 20,680 19,419 Russian Fed. 9,627 9,843 10,078 9,999 China 6,984 7,382 7,742 7,999 US 7,323 7,372 7,477 7,527 Japan 5,343 5,213 5,039 4,845 Iran, Islamic Rep. 4,256 4,302 4,372 4,294 India 2,569 2,580 2,748 2,882 China 3,617 3,674 3,729 3,793 Russian Fed. 2,601 2,709 2,706 2,797 Canada 3,054 3,192 3,315 3,226 Germany 2,605 2,624 2,393 2,505 Mexico 3,760 3,684 3,477 3,166 Brazil 2,048 2,102 2,274 2,397 UAE 2,995 3,147 3,055 3,113 Canada 2,247 2,246 2,323 2,295 Venezuela 3,011 2,835 2,614 2,582 Korea, Rep. 2,308 2,317 2,389 2,291 Kuwait 2,258 2,335 2,293 2,477 Saudi Arabia 1,756 1,841 2,054 2,224 Norway 2,969 2,778 2,556 2,464 Mexico 1,974 1,970 2,027 2,039 Iraq 1,833 1,922 2,113 2,409 France 1,960 1,956 1,921 1,930 Brazil 1,987 2,114 2,217 2,365 Iran, Islamic Rep. 1,620 1,693 1,693 1,730 Algeria 2,105 2,141 2,192 2,207 UK 1,802 1,785 1,714 1,704 Nigeria 2,598 2,463 2,346 2,160 Italy 1,819 1,813 1,759 1,691 Angola 1,245 1,410 1,708 1,893 Spain 1,619 1,602 1,617 1,574 Libya 1,728 1,838 1,853 1,866 Indonesia 1,231 1,173 1,201 1,217 UK 1,838 1,662 1,663 1,564 Taiwan, China 1,090 1,097 1,123 1,074 Qatar 1,157 1,218 1,259 1,412 Netherlands 1,070 1,043 962 982 Kazakhstan 1,266 1,332 1,384 1,408 Singapore 794 853 916 958 Indonesia 1,113 1,062 1,014 1,030 Australia 886 918 925 936 Azerbijian 454 655 868 903 Thailand 852 834 823 797 World 84,685 85,527 85,638 86,505 World 83,065 83,797 84,878 84,455 Source: International Energy Agency (production), and BP Statistical Review of World Energy (consumption). Global Commodity Markets World Bank 18 Rice Rice prices averaged $560/ton during the past six The policy actions taken by key rice suppliers months, considerably lower than last year’s Apr-May were influential because rice is a very thin market-- peak of $900/ton. Yet, they are still twice as high com- only 7% of global rice production is traded interna- pared to 2004/05, and more than three times higher tionally. Because of these measures, exports declined than 2000/01. The key factor behind last year’s rally 8% in 2008/09 with Thailand and India accounting for was policy measures by countries concerned with most of that decline. Although following the recent food security issues and to a lesser extent use of com- price drop most countries either eliminated or moder- peting crops for the production of biofuels. The most ated such trade interventions, the export restrictions surprising element of the rice price boom is that it are likely to have a lasting impact as confidence in took place against the backdrop of a well supplied the world market has been shaken, thus encouraging global market. The latest US Department of Agriculture countries to build larger stocks for national food se- May-2009 update projects global rice production for curity reasons. On the other hand, as it becomes ap- 2009/10 at 448.1 million tons, up from current season’s parent that the rice market is well-supplied, prices are 443.7 million tons. That implies stocks will increase in likely to experience further declines. Currently, they most key producing countries: China (up 4%), India are projected to average $500/ton during 2009, down (15%), Indonesia (8%), and Thailand (36%), increasing from $650/ton in 2008. Yet, real prices in the medium global stocks to 94.7 million tons, up from this sea- term are expected to average 50% higher than their son’s 89.8 million tons. 2000-07 average. Monthly Prices ($/ton) Annual Prices ($/ton) Global market data 2006/07 2007/08 2008/09 2009/10 2006/07 2007/08 2008/09 2009/10 PRODUCTION (000 metric tons) CONSUMPTION (000 metric tons) China 127,200 130,224 135,100 134,400 Thailand 9,557 10,011 9,000 8,500 India 93,350 96,690 98,900 99,500 Vietnam 4,522 4,649 5,200 5,000 Indonesia 35,300 37,000 37,300 37,600 India 5,740 4,654 2,500 4,000 Bangladesh 29,000 28,800 31,000 31,000 Pakistan 2,839 3,000 4,000 3,300 Vietnam 22,922 24,375 23,693 23,760 US 2,923 3,370 2,974 3,102 Thailand 18,250 19,300 19,400 20,000 China 1,340 969 1,300 1,300 Burma 10,600 10,730 10,150 10,730 Egypt 1,203 750 300 900 Philippines 9,775 10,479 10,593 10,710 World 31,459 31,120 28,672 29,694 Brazil 7,695 8,199 8,500 8,500 IMPORTS (000 metric tons) Japan 7,786 7,930 8,029 7,710 Philippines 1,800 2,700 2,000 1,750 US 6,267 6,344 6,515 7,163 Iran, Islamic Rep. 1,500 1,500 1,700 1,700 Pakistan 5,450 5,700 6,300 6,200 Nigeria 1,500 1,800 1,400 1,600 World 420,668 433,817 443,650 448,143 Saudi Arabia 958 961 1,360 1,370 STOCKS (000 metric tons) EU-27 1,338 1,566 1,050 1,300 China 35,915 38,015 42,845 44,445 Iraq 613 975 1,000 1,000 India 11,430 13,000 17,000 19,500 Malaysia 886 799 1,020 830 Indonesia 4,607 5,607 6,307 6,807 Côte d'Ivoire 920 845 800 800 Thailand 2,510 2,207 3,115 4,223 South Africa 795 1,025 580 750 Philippines 4,868 4,548 3,991 3,002 Japan 675 597 700 700 Japan 2,406 2,556 2,715 2,725 Senegal 675 820 740 700 Vietnam 1,392 2,018 1,761 1,771 Mexico 594 583 630 675 US 1,266 942 741 1,253 US 653 759 572 667 World 75,103 80,637 89,798 94,729 World 28,173 29,311 26,256 26,272 Source: US Department of Agriculture Global Commodity Markets World Bank Rubber 19 Natural rubber prices averaged $1.54/kg during Jan- World production of synthetic rubber totaled 12.8 May 2009, 45% lower than the corresponding period million tons in 2008, 6% lower than the year before. of 2008. Yet, prices are twice as high compared to the This is the first annual decline of that magnitude in the lows experienced during the early 2000s. The decline recent history of the sector. Likewise, consumption of reflects lower crude oil prices--down 53% during this synthetic rubber declined 5% in 2008 (and continues to period--which in turn reduced the cost of producing be weak in 2009) due to reduction in tire demand as substitute synthetic rubber. Weak demand for tire pro- the automobile sales in most countries (especially high duction due to the auto industry’s woes have played income) have collapsed. a key role as well. Global natural rubber consumption Natural rubber prices for 2009 are projected to av- declined to 9.6 million tons in 2008, from 9.9 million erage at levels similar to that of Jan-May, i.e., $1.50/ tons last year, thus increasing global stocks by almost kg and increase to $1.60/kg in 2010. This is in line 10%. In addition to the traditional natural rubber sup- with the projected crude oil price of $56/barrel in 2009 pliers (Thailand, Indonesia, Malaysia), which account and $63/barrel in 2010 as well as reversal of the eco- for 70% of global production, Vietnam is emerging an nomic downturn in 2010. However, if crude oil prices important player in the rubber market with its 2008 increase more than projected or economic recovery production share exceeding 7%. Consumption is domi- is quicker than anticipated, natural rubber prices may nated by China, accounting for more than one quarter experience a sharper increase. of global demand. Monthly Prices ($/kg) Annual Prices ($/kg) Global market data NATURAL RUBBER SYNTHETIC RUBBER 2005 2006 2007 2008 2005 2006 2007 2008 PRODUCTION (000 metric tons) PRODUCTION (000 metric tons) Thailand 2,937 3,137 3,056 3,020 US 2,366 2,606 2,670 2,294 Indonesia 2,271 2,637 2,755 2,824 China 1,632 1,813 2,215 2,304 Malaysia 1,126 1,284 1,200 1,078 Japan 1,627 1,607 1,655 1,663 India 772 853 811 880 Russian Fed. 1,146 1,219 1,209 1,109 Vietnam 469 554 602 663 Korea, Rep. 770 848 1,010 970 China 510 533 600 638 Germany 855 865 901 790 Côte d'Ivoire 165 178 189 195 France 655 664 655 645 World 8,907 9,701 9,726 9,942 World 12,165 12,719 13,538 12,785 CONSUMPTION (000 metric tons) CONSUMPTION (000 metric tons) China 2,150 2,400 2,550 2,435 China 2,580 2,880 3,435 3,560 US 1,159 1,003 1,018 1,041 US 2,002 2,001 1,929 1,714 India 789 815 851 878 Japan 1,156 1,171 1,162 1,171 Japan 857 874 888 858 Germany 635 635 710 580 Malaysia 387 383 446 461 Brazil 405 425 477 532 Thailand 335 321 374 367 Russian Fed. 568 572 612 497 World 9,069 9,329 9,884 9,550 World 11,904 12,481 13,264 12,647 GROSS EXPORTS (000 metric tons) GROSS EXPORTS (000 metric tons) Thailand 2,633 2,772 2,704 2,561 US 1,105 1,250 1,316 1,157 Indonesia 2,025 2,287 2,407 2,408 Korea Rep. 556 620 797 782 Malaysia 1,128 1,131 1,018 916 Germany 747 749 775 731 Vietnam 538 678 682 619 Russian Fed. 637 708 657 632 World 6,994 7,557 7,551 7,280 World 7,243 7,614 7,668 7,071 Source: International Rubber Study Group Global Commodity Markets World Bank 20 Soybeans Soybean prices averaged $416/ton during Jan-May Part of the soybean price increase has been fueled 2009, 27% lower than the corresponding average of by the use of competing vegetable oils in biodiesel 2008. The 2008 rally reflected strong demand for bio- production, currently estimated at 9% of global vege- fuel feedstock of competing crops (mainly maize for table oil use. The growth prospects for biodiesel, how- ethanol in the US and rapeseed oil for biodiesel in ever, are limited according to F.O.Licht’s latest Biofuel the EU) and to a lesser extent a poor crop in South report, which projects the share of vegetable oil going America’s key suppliers due to unfavorable weather. to biofuel production to stagnate in 2009. Consequent- Consequently, global production declined to 213 mil- ly, soybean prices are expected to average 390/ton in lion tons in 2008/09, 4% down from a year ago while 2009 (down from 523/ton in 2008) followed by a fur- stocks declined by 20%. The situation, however, is ex- ther decline in 2010 to $385/ton. These forecasts, how- pected to improve considerably during the next sea- ever, are subject to both downside and upside risks. son. According to the US Department of Agriculture Such risks are linked to easing of biodiesel mandates latest update, next season’s crop is projected to be in the EU (reducing demand for competing edible oils) 14% higher than 2008/09, with production increases and further increases in crude oil price (making the expected by all key suppliers: US (up 8%), Brazil (up biofuel industry more profitable), respectively. 5%), and Argentina (up 50%). Monthly Prices ($/metric ton) Annual Prices ($/metric ton) Global market data 2006/07 2007/08 2008/09 2009/10 2006/07 2007/08 2008/09 2009/10 PRODUCTION (000 metric tons) Exports (000 metric tones) US 87,001 72,859 80,536 86,954 US 30,386 31,598 33,743 34,292 Brazil 59,000 61,000 57,000 60,000 Brazil 23,485 25,364 26,250 24,000 Argentina 48,800 46,200 34,000 51,000 Argentina 9,559 13,837 7,400 9,400 China 15,967 14,000 16,000 15,600 Paraguay 4,361 5,400 2,300 3,970 India 7,690 9,470 9,650 10,000 Canada 1,683 1,753 1,875 1,900 Paraguay 5,856 6,900 3,800 5,750 World 71,310 79,534 73,178 75,302 Canada 3,460 2,700 3,300 3,400 IMPORTS (000 metric tons) World 237,111 221,100 212,786 241,722 China 28,726 37,816 37,500 38,100 CRUSHINGS (000 metric tons) EU-27 15,291 15,123 13,050 12,900 US 49,198 49,024 44,634 45,586 Japan 4,094 4,014 3,650 3,950 China 35,970 39,518 40,604 43,050 Mexico 3,844 3,614 3,450 3,490 Argentina 33,586 34,607 32,000 35,100 Taiwan 2,436 2,149 2,050 2,250 Brazil 31,109 31,944 32,000 31,600 Thailand 1,532 1,753 1,575 1,705 EU-27 14,670 14,870 12,750 12,600 Indonesia 1,309 1,147 1,200 1,600 India 6,615 8,170 8,300 8,700 Turkey 1,268 1,277 1,100 1,280 Mexico 3,900 3,675 3,565 3,615 World 69,062 78,157 72,342 74,398 Japan 2,925 2,890 2,580 2,750 STOCKS (000 metric tons) Taiwan 2,161 1,965 1,815 1,990 Argentina 22,606 21,760 16,000 20,875 Paraguay 1,355 1,400 1,500 1,550 Brazil 18,190 19,072 14,900 16,415 Thailand 1,406 1,514 1,450 1,497 China 2,700 4,245 6,341 6,291 Canada 1,524 1,383 1,325 1,400 US 15,617 5,580 3,531 6,262 World 195,659 201,702 192,764 200,835 World 62,885 53,088 42,548 51,877 Source: US Department of Agriculture Global Commodity Markets World Bank Sugar 21 Sugar prices averaged 30.4 cents/kg during Jan-May Brazil has long been the world’s largest sugar sup- 2009, 9% higher compared to the same period of 2008 plier, currently accounting for almost half of global when they averaged 27.9 cents/kg. Sugar is among the exports despite 60% of its sugar cane production go- few commodities whose price defied the trend and ing to ethanol production. Most Brazilian sugar cane increased during this period, mainly in response to an processors have the flexibility to switch from sugar 11% reduction in global output. The shortfall was ac- to ethanol production and vice-versa. The decline in counted for by India, turning it to a net sugar importer. crude oil prices is encouraging Brazilian producers to India’s production declined from 28.6 million tons in increase their sugar output at the expense of ethanol, 2007/08 to 16.8 million tons in 2008/09, due to delayed thus preventing sugar prices from rising any further. payments to sugar growers and higher prices of com- Consequently, we project sugar prices to average 28 peting food crops. Global sugar output during 2009/10 cents/kg in 2009, down from 29 cents/kg in 2008 and (US Department of Agriculture May-update), however, increase only slightly in 2010 and 2011. Prices, how- is expected to increase by 8% with India and Brazil ac- ever, could be even lower if global production recov- counting for all of the increase. Similarly, exports will ers more strongly from recent weakness. Conversely, increase by three million tons, all of which will come further increases in crude oil prices would make the from Brazil’s record crop of 36.9 million tons. ethanol industry more profitable, hence putting up- ward pressure on sugar prices. Monthly Prices (cents/kg) Annual Prices (cents/kg) Global market data 2006/07 2007/08 2008/09 2009/10 2006/07 2007/08 2008/09 2009/10 PRODUCTION (000 tons) EXPORTS (000 tons) Brazil 31,450 32,100 32,350 36,850 Brazil 20,850 19,750 20,250 24,300 India 30,780 28,630 16,780 20,750 Thailand 4,705 4,914 5,500 5,700 EU-27 17,757 17,740 16,900 17,000 Australia 3,860 3,700 3,544 3,600 China 12,855 15,898 13,500 14,500 UAE 1,730 1,825 2,000 2,013 Thailand 6,720 7,820 7,200 7,500 Guatemala 1,500 1,333 1,490 1,515 US 7,662 7,396 6,900 7,326 EU-27 2,162 1,386 1,695 1,505 Mexico 5,633 5,852 5,550 5,500 Cuba 620 950 900 900 Australia 5,212 4,939 4,834 4,834 South Africa 1,267 1,154 1,000 900 Pakistan 3,615 4,163 3,562 3,670 World 50,634 52,116 48,248 51,260 Russian Fed. 3,150 3,200 3,480 3,350 IMPORTS (000 tons) Indonesia 1,900 2,300 2,500 2,600 EU-27 4,338 3,650 3,994 4,500 South Africa 2,313 2,360 2,350 2,300 India 0 0 1,800 2,500 Argentina 2,440 2,190 2,420 2,250 Russia Fed. 2,950 3,100 2,800 2,400 Guatemala 2,365 2,274 2,247 2,250 UAE 1,826 1,912 2,087 2,100 World 164,470 166,480 148,732 159,924 Indonesia 2,350 2,000 2,000 1,950 STOCKS (000 tons) Nigeria 1,080 1,385 1,250 1,650 India 9,850 9,100 4,540 4,770 US 1,887 2,377 2,478 1,639 EU-27 4,005 4,769 3,668 3,363 Korea, South 1,555 1,560 1,550 1,600 China 1,401 3,965 3,395 3,345 Malaysia 1,730 1,495 1,540 1,530 Thailand 1,745 2,651 2,351 2,051 Japan 1,350 1,337 1,502 1,500 Indonesia 1,120 1,020 1,120 1,270 Algeria 1,310 1,300 1,400 1,450 Mexico 1,718 1,615 920 1,155 Canada 1,437 1,386 1,459 1,450 World 36,916 41,061 31,971 31,210 World 45,144 44,966 47,955 49,611 Source: US Department of Agriculture Global Commodity Markets World Bank 22 Tea The world price of tea, three-auctions-average, peaked Beginning in September 2008, however, prices be- at $2.76/kg in July 2008, a 24-year-high in nominal gan falling following global economic downturn. Rus- terms, before plummeting to $1.93/kg in December. sia and Pakistan (latter, Kenya’s top importer) had Prices in 2008 averaged $2.42, up 19 percent over cut back tea imports significantly as their economic 2007; by May 2009 prices have rebounded to $2.69/kg. woes worsened. Imports elsewhere reduced also, par- While the sharp price decline during the second half of ticularly the oil exporters who favored premium tea 2008 has been similar to most commodities, tea prices grades (these countries accounted for 34% of global have recovered sooner, reflecting weather related sup- tea imports volume in 2008.) ply tightness. Preliminary data for 2009 indicate that supply short- The 2008 rally was fueled primarily by the robust age has continued, in turn supported the price recov- demand for premium grade teas, especially by Russia ery. Production during the first quarter of 2009 for as well as a number of Middle-East oil exporters, owing India, Kenya and Sri Lanka was 46 thousand tons, 19 to their increased purchasing power; the rally was also percent lower than the first quarter 2008 on account of attributed to global supply tightness. Kenyan crop suf- drier than normal weather. fered due to prolonged dry weather, lack of fertilizers In view of the tight supplies, tea prices are expect- which nearly tripled in price and to civil disturbances ed to average $2.35/kg during 2009. Prices are likely earlier in 2008. to fall to $2.20 in 2010, on improved supply prospects. Monthly Prices (cents/kg) Annual Prices (cents/kg) Global market data 2005 2006 2007 2008 2005 2006 2007 2008 PRODUCTION (000 metric tons) GROSS EXPORTS (000 metric tons) China 935 1,028 1,140 1,160 Kenya 348 312 344 383 India 946 982 945 981 Sri Lanka 299 315 294 299 Kenya 324 311 370 346 China 287 287 289 297 Sri Lanka 317 311 305 318 India 195 216 176 193 Turkey 135 142 178 155 Vietnam 88 105 111 115 Indonesia 156 140 150 148 Indonesia 102 95 84 95 Vietnam 133 143 148 144 Argentina 66 71 74 76 Japan 100 100 92 93 Malawi 43 42 47 40 Argentina 80 88 87 72 World 1,566 1,578 1,572 1,643 Bangladesh 61 53 58 59 NET IMPORTS (000 metric tons) Uganda 38 37 45 43 Russian Fed. 173 166 174 173 Malawi 38 45 48 42 UK 128 135 131 131 Tanzania 30 31 35 32 US 100 108 109 117 Myanmar 18 18 18 19 Pakistan 139 117 106 99 Iran, Islamic Rep. 25 20 17 18 Egypt 74 79 69 94 Taiwan, China 19 19 18 17 Dubai 62 69 72 71 Rwanda 16 17 17 17 Other CIS 53 56 58 60 Nepal 13 14 14 14 Iran, Islamic Rep. 43 49 55 58 Zimbabwe 15 16 14 9 Morroco 50 51 53 48 PNG 7 7 7 7 Japan 51 48 47 43 Burundi 8 6 7 6 Iraq 58 67 32 36 World 3,457 3,573 3,761 3,750 World 1,468 1,487 1,491 1,506 Sources: International Tea Committee, F.O. Lichts and World Bank estimates Global Commodity Markets World Bank Wheat 23 Wheat prices averaged a little over $238/ton during The expected decline in global output is concen- Jan-May 2009, 38% lower than the respective 2008 av- trated among four key suppliers. They include EU-27, erage. Last year’s rally, which was fuelled partly by Russian Federation, Canada (all 9% down), and the US strong biofuel demand for competing crops, took (19% down). Yet, despite the projected 4% reduction place against the backdrop of a record wheat crop in in next season’s output, the rebuilding of stocks indi- 2008/09, up 12% from the season before. According cates that the wheat market is well-supplied. Similarly to the May-2009 US Department of Agriculture crop wheat trade, while expected to decline by 5% during update, global wheat production is expected to de- next season, still exceeds the 2007/08 average by six cline 4% in 2009/10. Stocks are projected to increase million tons. Thus, barring any unfavorable weather for the second straight year thus pushing the stock-to- event, prices are expected to average $230/ton in use ratio to 0.19, well above the 2007/08 record low 2009, a little lower than their Jan-May average, while of 0.14 and more in line with the historical average of a moderate increase is expected to take place during 0.20. The stock buildup will be accounted for by China 2010. Such forecast is subjected to upside risks if crude (22%), India (22%), and Iran (34%), none of which is a oil prices increase further (reflecting the strong correla- major exporter. Interestingly, these countries increased tion between the two prices at high crude oil prices.) their stocks during the earlier season, perhaps in an In the longer term, real wheat prices are expected to effort to reduce their reliance on global supplies. remain well above the averages experienced during the early 2000s. Monthly Prices ($/metric ton) Annual Prices ($/metric ton) Global market data 2006/07 2007/08 2008/09 2009/10 2006/07 2007/08 2008/09 2009/10 PRODUCTION (000 tons) EXPORTS (000 tons) EU-27 124,870 120,204 151,568 138,244 US 24,725 34,403 27,488 24,494 China 108,466 109,298 113,000 113,000 EU-27 13,816 12,271 22,000 18,000 India 69,350 75,810 78,600 77,500 Canada 19,434 16,375 16,800 17,500 Russian Fed. 44,900 49,400 63,700 58,000 Russian Fed. 10,584 12,552 17,000 17,500 US 49,217 55,821 68,026 55,139 Australia 8,728 7,487 14,000 15,500 Canada 25,265 20,054 28,610 26,000 Kazakhstan 8,089 8,181 4,500 6,500 Pakistan 21,277 23,300 21,500 24,000 Ukraine 3,366 1,236 12,000 6,000 Australia 10,822 13,838 21,500 23,000 Argentina 10,709 11,197 4,500 5,500 Ukraine 14,000 13,900 25,900 19,000 India 200 50 200 2,000 Turkey 17,500 15,500 16,800 18,000 Turkey 2,377 1,722 1,800 1,900 Kazakhstan 13,500 16,600 12,500 14,000 World 111,636 117,512 129,776 123,713 Iran, Islamic Rep. 14,500 15,000 10,000 12,000 IMPORTS (000 tons) Argentina 16,000 16,800 8,400 11,000 Egypt 7,300 7,700 8,500 8,500 World 595,620 609,697 682,684 657,625 EU-27 5,137 6,942 6,500 6,500 STOCKS (000 tons) Brazil 8,048 6,711 6,000 5,700 China 38,450 38,963 48,913 59,613 Indonesia 5,711 5,458 5,300 5,500 EU-27 14,075 12,414 20,982 20,226 Iran, Islamic Rep. 1,100 200 7,000 5,500 US 12,414 8,323 18,217 17,346 Japan 5,747 5,701 5,500 5,500 India 4,500 5,800 13,910 16,910 Algeria 4,874 5,904 5,600 5,400 Russian Fed. 2,231 1,819 7,469 7,769 Iraq 2,912 3,424 3,400 3,800 Canada 6,865 4,561 7,531 7,531 Korea, Rep. 3,439 3,092 3,200 3,400 Iran, Islamic Rep. 3,507 3,157 4,507 6,057 Mexico 3,610 3,136 3,400 3,400 World 126,981 120,065 167,052 181,904 World 114,527 113,651 127,939 118,595 Source: US Department of Agriculture Global Commodity Markets World Bank 24 Appendix A: Prices and Forecasts Table A1: Commodity Price Data 2007 2008 2009 2008 2008 2008 2009 2009 2009 2009 2009 Jan-Dec Jan-Dec Jan-Jun Apr-Jun Jul-Sep Oct-Dec Jan-Mar Apr-Jun Apr May Jun Energy Coal, Australia a/ $/mt 65.73 127.10 69.20 138.65 162.80 92.97 71.93 66.48 63.56 64.50 71.38 Crude oil, avg, spot a/ $/bbl 71.12 96.99 51.65 120.97 115.68 56.00 44.11 59.19 50.28 58.15 69.15 Crude oil, Brent a/ $/bbl 72.70 97.64 52.06 122.39 115.60 55.89 44.98 59.13 50.85 57.94 68.62 Crude oil, Dubai a/ $/bbl 68.37 93.78 51.74 116.67 113.47 53.67 44.56 58.93 50.18 57.40 69.21 Crude oil, West Texas Int. a/ $/bbl 72.28 99.56 51.16 123.85 117.98 58.45 42.80 59.52 49.81 59.13 69.62 Natural gas Index a/ 2000=100 186.5 267.9 170.6 286.0 284.1 266.2 198.2 143.0 144.7 143.0 141.3 Natural gas, Europe a/ $/mmbtu 8.56 13.41 10.06 12.40 14.62 15.75 11.94 8.18 8.51 8.09 7.95 Natural gas, US a/ $/mmbtu 6.98 8.86 4.14 11.35 9.03 6.40 4.57 3.71 3.50 3.81 3.81 Natural gas LNG, Japan a/ $/mmbtu 7.68 12.53 9.28 11.71 13.33 14.62 10.90 7.66 8.12 7.50 7.35 Non Energy Agriculture Beverages Cocoa b/ ¢/kg 195.2 257.7 259.2 276.4 282.6 224.1 259.7 258.7 258.1 247.5 270.4 Coffee, arabica b/ ¢/kg 272.4 308.2 302.0 315.1 321.2 267.8 283.9 320.2 297.4 332.9 330.2 Coffee, robusta b/ ¢/kg 190.9 232.1 170.6 243.6 244.8 192.6 175.8 165.3 166.5 166.7 162.7 Tea, auctions (3), average b/ ¢/kg 203.6 242.0 241.2 254.7 272.3 206.6 217.0 265.4 250.9 269.4 276.0 Tea, Colombo auctions b/ ¢/kg 252.2 278.9 279.2 298.5 303.2 208.8 261.7 296.7 287.3 296.5 306.2 Tea, Kolkata auctions b/ ¢/kg 192.1 225.5 223.1 244.0 260.9 220.2 174.5 271.6 244.4 289.4 281.1 Tea, Mombasa auctions b/ ¢/kg 166.5 221.8 221.5 221.6 252.8 190.8 214.9 228.0 221.0 222.3 240.8 Food Fats and Oils Coconut oil b/ $/mt 919 1,224 729 1,499 1,246 772 677 781 747 843 754 Copra $/mt 607 816 480 1,013 817 520 447 513 499 559 480 Groundnut oil b/ $/mt 1,352 2,131 1,224 2,328 2,417 1,773 1,283 1,165 1,187 1,157 1,151 Palm oil b/ $/mt 780 949 661 1,198 928 512 577 744 702 801 730 Palmkernel oil $/mt 888 1,130 672 1,420 1,114 609 577 766 717 830 751 Soybean meal b/ $/mt 308 424 394 484 450 320 365 424 388 437 446 Soybean oil b/ $/mt 881 1,258 807 1,466 1,353 830 755 859 801 892 885 Soybeans b/ $/mt 384 523 427 585 566 377 394 460 414 465 502 Grains Barley b/ $/mt 172.4 200.5 122.9 239.1 216.6 129.5 116.3 129.5 111.3 128.7 148.5 Maize b/ $/mt 163.7 223.1 171.4 259.0 244.7 168.4 166.9 176.0 168.5 179.9 179.5 Rice, Thailand, 5% b/ $/mt 326.4 650.2 568.9 855.3 703.0 564.4 586.3 551.6 549.7 533.0 572.0 Rice, Thailand, 25% $/mt 306.5 n.a. 463.9 n.a. 669.5 449.9 469.4 458.4 446.0 454.0 475.3 Rice,Thai, A1.Special / Super $/mt 272.3 482.3 324.5 693.7 478.6 314.1 323.4 325.7 335.7 322.4 319.0 Sorghum $/mt 162.7 207.8 146.7 246.9 214.7 151.0 145.3 148.1 154.1 160.1 130.0 Wheat, Canada $/mt 300.4 454.6 323.7 484.4 390.2 322.1 321.9 325.5 315.4 334.6 326.6 Wheat, US, HRW b/ $/mt 255.2 326.0 241.1 346.5 317.7 228.1 231.6 250.5 234.2 262.3 255.1 Wheat US SRW $/mt 238.6 271.5 191.5 277.8 241.5 182.7 187.4 195.6 182.6 202.5 201.7 Other Food Bananas EU $/mt 1,037 1,188 1,211 1,263 1,123 944 1,142 1,280 1,292 1,286 1,262 Bananas US b/ $/mt 676 844 875 920 775 847 891 858 890 830 854 Fishmeal $/mt 1,177 1,133 1,055 1,185 1,198 1,023 1,013 1,096 1,040 1,103 1,146 Meat, beef b/ ¢/kg 260.3 313.8 254.0 332.7 372.4 268.0 245.2 262.8 255.5 263.7 269.2 Meat, chicken b/ ¢/kg 156.7 169.6 173.8 167.9 177.1 174.7 173.5 174.1 171.2 174.5 176.7 Meat, sheep ¢/kg 412.0 458.5 403.7 493.2 477.3 410.0 378.5 428.8 404.4 427.7 454.4 Oranges b/ $/mt 957 1,107 831 1,322 1,163 842 799 864 905 888 798 Shrimp, Mexico b/ ¢/kg 1,010 1,069 973 1,109 1,048 1,014 976 970 970 970 970 Sugar EU domestic b/ ¢/kg 68.09 69.69 52.60 77.59 74.70 51.97 51.44 53.75 52.09 53.84 55.34 Sugar US domestic b/ ¢/kg 45.77 46.86 45.85 46.34 51.52 44.72 43.82 47.89 46.83 47.68 49.15 Sugar, world b/ ¢/kg 22.22 28.21 31.37 27.01 31.14 26.28 28.85 33.89 30.09 35.36 36.22 Continued on next page Global Commodity Markets World Bank Appendix A: Prices and Forecasts 25 Table A1: Commodity Price Data (Continued from previous page) 2007 2008 2009 2008 2008 2008 2009 2009 2009 2009 2009 Jan-Dec Jan-Dec Jan-Jun Apr-Jun Jul-Sep Oct-Dec Jan-Mar Apr-Jun Apr May Jun Raw Materials Timber Logs, Cameroon $/cum 381.3 526.9 410.7 554.4 548.5 473.8 426.8 394.6 382.5 395.4 406.0 Logs, Malaysia b/ $/cum 268.0 292.3 298.9 282.3 277.7 315.7 313.6 284.3 283.1 291.1 278.8 Plywood ¢/sheets 640.7 645.5 569.1 647.3 648.6 645.5 572.8 565.5 567.7 565.9 562.7 Sawnwood, Cameroon $/cum 759.8 958.3 705.3 1,052.3 974.5 770.8 689.2 721.4 684.3 717.6 762.5 Sawnwood, Malaysia b/ $/cum 806.3 889.1 821.8 935.8 900.3 859.9 813.7 830.0 815.7 855.4 818.8 Woodpulp $/mt 767.0 820.2 554.3 870.7 848.8 711.0 565.1 543.4 538.8 545.4 546.0 Other Raw Materials Cotton A Index b/ ¢/kg 139.5 157.4 126.5 166.5 168.2 126.9 120.8 132.2 125.2 136.3 135.1 Cotton Memphis ¢/kg 142.9 161.5 136.1 171.6 170.0 130.1 129.8 142.4 135.6 150.2 141.4 Rubber RSS1, US ¢/kg 248.0 284.1 176.4 311.7 329.1 202.8 165.8 187.0 183.6 189.8 187.6 Rubber RSS3, SGP b/ ¢/kg 226.3 258.6 156.2 303.5 298.4 159.0 146.0 166.4 162.4 169.3 167.5 Fertilizers DAP b/ $/mt 432.5 967.2 332.9 1,191.6 1,153.7 663.3 362.2 303.6 335.4 297.5 277.8 Phosphate rock b/ $/mt 70.9 345.6 153.3 367.5 409.2 371.3 193.3 113.3 125.5 117.5 96.9 Potassium chloride b/ $/mt 200.2 570.1 795.9 511.1 635.0 766.7 865.2 726.7 745.0 717.5 717.5 TSP b/ $/mt 339.1 879.4 284.7 1,036.4 1,107.8 658.7 321.7 247.7 278.0 245.0 220.0 Urea b/ $/mt 309.4 492.7 254.2 575.7 745.4 292.2 267.3 241.1 245.2 240.8 237.4 Metals and Minerals Aluminum b/ $/mt 2,638 2,573 1,422 2,940 2,787 1,821 1,360 1,485 1,421 1,460 1,574 Copper b/ $/mt 7,118 6,956 4,046 8,443 7,680 3,905 3,428 4,663 4,407 4,569 5,014 Gold $/toz 697 872 915 896 870 795 909 922 890 929 946 Iron ore b/ ¢/dmtu 84.7 140.6 101.0 140.6 140.6 140.6 101.0 101.0 101.0 101.0 101.0 Lead b/ ¢/kg 258.0 209.1 132.8 230.7 191.2 124.5 115.7 149.9 138.3 144.0 167.4 Nickel b/ $/mt 37,230 21,111 11,696 25,682 18,961 10,843 10,471 12,920 11,166 12,635 14,960 Silver ¢/toz 1,341 1,500 1,321 1,720 1,495 1,020 1,265 1,376 1,252 1,411 1,466 Steel products index c/ 2000=100 182.0 289.3 245.0 279.2 338.2 310.4 274.5 215.5 219.0 213.8 213.6 Steel cr coilsheet c/ $/mt 650 966 867 900 1,100 1,100 1,033 700 700 700 700 Steel hr coilsheet c/ $/mt 550 883 767 833 1,000 1,000 933 600 600 600 600 Steel, rebar c/ $/mt 522 760 461 838 934 630 473 450 425 450 475 Steel wire rod c/ $/mt 533 1,010 1,103 950 1,135 1,200 1,200 1,007 1,100 1,020 900 Tin b/ ¢/kg 1,454 1,851 1,227 2,265 2,051 1,310 1,103 1,351 1,174 1,379 1,499 Zinc b/ ¢/kg 324.2 187.5 132.3 211.3 177.0 118.5 117.2 147.3 137.9 148.4 155.7 World Bank Commodity Price Indices (2000 =100) Energy 244.8 342.0 185.4 417.8 406.0 212.9 166.3 204.5 177.5 201.1 235.0 Non Energy 224.7 272.0 198.8 307.8 292.6 206.3 189.9 207.7 200.0 209.3 213.9 Agriculture 180.3 229.5 189.5 259.4 243.5 178.6 181.9 197.0 189.0 200.8 201.3 Beverages 169.9 210.0 202.7 221.4 226.8 181.2 197.9 207.6 201.9 206.0 215.0 Food 184.7 247.4 200.1 286.3 260.5 185.7 190.4 209.7 199.1 214.7 215.3 Fats and Oils 209.0 277.3 209.6 327.7 288.9 182.4 191.4 227.8 211.0 237.4 235.1 Grains 189.0 281.7 223.2 335.2 298.5 218.6 221.3 225.1 216.9 226.8 231.7 Other Food 149.0 177.1 166.6 187.4 188.9 160.2 161.3 171.9 167.4 173.9 174.3 Raw Materials 174.9 195.7 157.0 213.7 210.4 160.0 153.1 160.9 157.9 164.4 160.4 Timber 136.8 150.5 142.4 155.4 150.2 149.4 143.1 141.8 139.8 145.9 139.7 Other Raw Materials 216.6 245.3 172.9 277.4 276.3 171.6 164.0 181.8 177.7 184.7 183.1 Fertilizers 240.1 566.7 338.6 624.1 741.1 492.2 376.6 300.6 314.8 300.2 286.9 Metals and Minerals 314.0 325.7 202.0 371.1 342.4 230.6 185.0 219.0 209.4 216.3 231.5 a/ Included in the energy index (2000=100) b/ Included in the non-energy index (2000=100) c/ Steel not included in the non-energy index Sources include: Africa Tea Brokers Ltd Weekly Market Report, Bloomberg, Canadian Grain Commission, Canadian Wheat Board, Cotton Outlook, Coal Week International, Fertilizer International, Fertilizer Week, FRuiTROP, INFOFISH, INTERFEL Fel Actualités hebdo, International Cocoa Organization, International Coffee Organization, Interna- tional Rubber Study Group, International Tea Committee, International Tropical Timber Organization, Internatonal Sugar Organization, ISTA Mielke GmbH Oil World, Japan Lumber Journal, Japan Metal Bulletin, Meat Trades Journal, MLA Meat & Livestock Weekly, Platts International Coal Report, Platts Metals Week, Singapore Commodity Exchange, Sopisco News, Sri Lanka Tea Board, Statistisches Bundesamt, US Department of Agriculture, US NOAA Fisheries Service, Vale and World Gas Intelligence. Global Commodity Markets World Bank 26 Appendix A: Prices and Forecasts Table A2: Commodity Prices and Price Projections in Current Dollars Actual Projections 1970 1980 1990 2000 2008 2009 2010 2011 2015 2020 Energy Coal, Australia $/mt 7.8 40.1 39.7 26.3 127.1 70.0 65.0 70.0 70.0 75.0 Crude oil, average $/bbl 1.2 36.9 22.9 28.2 97.0 55.5 63.0 65.8 78.6 80.6 Natural gas, Europe $/mmbtu 0.4 4.2 2.8 3.9 13.4 9.0 8.0 7.5 9.5 10.0 Natural gas, US $/mmbtu 0.2 1.6 1.7 4.3 8.9 4.8 6.5 8.0 10.0 10.5 Natural gas LNG, Japan $/mmbtu n.a. 5.7 3.6 4.7 12.5 8.5 7.5 8.0 10.0 10.5 Non-Energy Agriculture Beverages Cocoa ¢/kg 68 260 127 91 258 260 240 200 175 170 Coffee, arabica ¢/kg 115 347 197 192 308 290 270 255 255 230 Coffee, robusta ¢/kg 91 324 118 91 232 180 178 177 180 150 Tea, auctions (3) average ¢/kg 84 166 206 188 242 235 220 220 220 225 Food Fats and Oils Coconut oil $/mt 397 674 337 450 1,224 700 750 750 850 715 Groundnut oil $/mt 379 859 964 714 2,131 1,300 1,325 1,340 1,325 1,110 Palm oil $/mt 260 584 290 310 949 650 660 670 780 715 Soybean meal $/mt 103 262 200 189 424 385 350 330 308 304 Soybean oil $/mt 286 598 447 338 1,258 770 800 810 850 800 Soybeans $/mt 117 296 247 212 523 390 385 383 375 375 Grains Barley $/mt n.a. 78 80 77 201 120 140 150 170 176 Maize $/mt 58 125 109 89 223 165 166 167 174 175 Rice, Thailand, 5% $/mt 126 411 271 202 650 500 470 462 470 483 Wheat, US, HRW $/mt 55 173 136 114 326 230 250 265 269 276 Other Food Bananas, US $/mt 166 377 541 424 844 890 868 847 710 605 Meat, beef ¢/kg 130 276 256 193 314 250 265 270 290 325 Meat, chicken ¢/kg n.a. 69 98 119 170 164 167 170 181 197 Oranges $/mt 168 400 531 363 1,107 835 900 941 950 900 Shrimp ¢/kg n.a. 1,152 1,069 1,515 1,069 960 975 990 1,050 1,150 Sugar, world ¢/kg 8.2 63.2 27.7 18.0 28.2 28.0 29.0 31.0 34.0 38.0 Agricultural Raw Materials Timber Logs, Cameroon $/cum 43 252 343 275 527 410 400 405 425 490 Logs, Malaysia $/cum 43 196 177 190 292 280 260 262 270 320 Sawnwood, Malaysia $/cum 175 396 533 595 889 795 760 773 825 970 Other Raw Materials Cotton ¢/kg 68 206 182 130 157 125 128 135 145 140 Rubber, Asia ¢/kg 41 142 86 67 259 150 160 170 190 185 Tobacco $/mt 1,076 2,276 3,392 2,976 3,589 3,800 3,400 3,400 3,400 3,500 Fertilizers DAP $/mt 54 222 171 154 967 350 300 310 360 400 Phosphate rock $/mt 11 47 41 44 346 130 100 90 80 95 Potassium chloride $/mt 32 116 98 123 570 750 400 300 255 220 TSP $/mt 43 180 132 138 879 300 300 300 310 340 Urea $/mt 18 192 119 101 493 230 180 185 200 245 Metals and Minerals Aluminum $/mt 614 1,775 1,639 1,549 2,573 1,450 1,800 2,200 2,650 2,800 Copper $/mt 1,416 2,182 2,661 1,813 6,956 3,700 4,000 4,200 4,525 4,650 Gold $/toz 36 608 383 279 872 900 850 800 700 750 Iron ore ¢/dmtu 9.8 28.1 32.5 28.8 140.6 100.0 80.0 77.5 71.0 76.0 Lead ¢/kg 30 91 81 45 209 125 126 127 132 142 Nickel $/mt 2,846 6,519 8,864 8,638 21,111 11,000 12,000 13,000 15,250 16,500 Silver ¢/toz 176 2,064 482 500 1,500 1,300 1,200 1,100 1,000 1,050 Tin ¢/kg 367 1,677 609 544 1,851 1,200 1,220 1,240 1,320 1,420 Zinc ¢/kg 30 76 151 113 187 125 140 143 152 164 Projections as of June 1, 2009 Global Commodity Markets World Bank Appendix A: Prices and Forecasts 27 Table A3: Commodity Prices and Price Projections in Constant 2000 Dollars Actual Projections 1970 1980 1990 2000 2008 2009 2010 2011 2015 2020 Energy Coal, Australia $/mt 27.0 49.5 38.5 26.3 100.2 54.1 49.8 53.6 52.6 55.0 Crude oil, average $/bbl 4.2 45.5 22.2 28.2 76.4 42.9 48.2 50.4 59.1 59.1 Natural gas, Europe $/mmbtu 1.5 5.2 2.7 3.9 10.6 7.0 6.1 5.7 7.1 7.3 Natural gas, US $/mmbtu 0.6 2.0 1.7 4.3 7.0 3.7 5.0 6.1 7.5 7.7 Natural gas LNG, Japan $/mmbtu n.a. 7.0 3.5 4.7 9.9 6.6 5.7 6.1 7.5 7.7 Non-Energy Agriculture Beverages Cocoa ¢/kg 234 321 123 91 203 201 184 153 132 125 Coffee, arabica ¢/kg 397 427 192 192 243 224 207 195 192 169 Coffee, robusta ¢/kg 316 400 115 91 183 139 136 136 135 110 Tea, auctions (3) average ¢/kg 289 205 200 188 191 182 168 168 165 165 Food Fats and Oils Coconut oil $/mt 1,376 831 327 450 964 541 574 574 639 524 Groundnut oil $/mt 1,311 1,059 936 714 1,679 1,005 1,014 1,026 996 814 Palm oil $/mt 901 720 282 310 747 503 505 513 587 524 Soybean meal $/mt 355 324 195 189 334 298 268 253 232 223 Soybean oil $/mt 992 737 435 338 991 595 613 620 639 587 Soybeans $/mt 405 365 240 212 412 302 295 293 282 275 Grains Barley $/mt n.a. 96 78 77 158 93 107 115 128 129 Maize $/mt 202 154 106 89 176 128 127 128 131 128 Rice, Thailand, 5% $/mt 438 506 263 202 512 387 360 354 353 354 Wheat, US, HRW $/mt 190 213 132 114 257 178 191 203 202 202 Other Food Bananas, US $/mt 575 465 526 424 665 688 665 649 534 444 Meat, beef ¢/kg 452 340 249 193 247 193 203 207 218 238 Meat, chicken ¢/kg n.a. 85 96 119 134 127 128 130 136 144 Oranges $/mt 582 493 516 363 873 646 689 720 714 660 Shrimp ¢/kg n.a. 1,420 1,039 1,515 842 742 746 758 790 844 Sugar, world ¢/kg 28.5 77.9 26.9 18.0 22.2 21.7 22.2 23.7 25.6 27.9 Agricultural Raw Materials Timber Logs, Cameroon $/cum 149 310 334 275 415 317 306 310 320 359 Logs, Malaysian $/cum 149 241 172 190 230 217 199 201 203 235 Sawnwood, Malaysia $/cum 608 489 518 595 701 615 582 592 620 711 Other Raw Materials Cotton ¢/kg 234 254 177 130 124 97 98 103 109 103 Rubber, Asia ¢/kg 141 176 84 67 204 116 123 130 143 136 Tobacco $/mt 3,727 2,806 3,297 2,976 2,828 2,938 2,603 2,603 2,557 2,567 Fertilizers DAP $/mt 187 274 167 154 762 271 230 237 271 293 Phosphate rock $/mt 38 58 39 44 272 101 77 69 60 70 Potassium chloride $/mt 109 143 95 123 449 580 306 230 192 161 TSP $/mt 147 222 128 138 693 232 230 230 233 249 Urea $/mt 63 237 116 101 388 178 138 142 150 180 Metals and Minerals Aluminum $/mt 2,128 2,188 1,593 1,549 2,027 1,121 1,378 1,684 1,993 2,054 Copper $/mt 4,904 2,690 2,586 1,813 5,481 2,861 3,063 3,216 3,403 3,411 Gold $/toz 125 749 373 279 687 696 651 613 526 550 Iron ore ¢/dmtu 34 35 32 29 111 77 61 59 53 56 Lead ¢/kg 105 112 79 45 165 97 96 97 99 104 Nickel $/mt 9,860 8,037 8,614 8,638 16,635 8,506 9,188 9,953 11,468 12,102 Silver ¢/toz 609 2,544 468 500 1,182 1,005 919 842 752 770 Tin ¢/kg 1,273 2,068 591 544 1,459 928 934 949 993 1,042 Zinc ¢/kg 102 94 147 113 148 97 107 109 114 120 Projections as of June 1, 2009 Global Commodity Markets World Bank 28 Appendix A: Prices and Forecasts Table A4. Weighted Indices of Commodity Prices and Inflation, 2000=100 a/ Actual Projection Index 1970 1980 1990 2000 2008 2009 2010 2011 2015 2020 Current dollars Energy 5.6 124.3 81.3 100.0 342.0 177.8 194.0 209.7 276.9 285.1 Non-energy 53.0 143.5 118.6 100.0 272.0 190.0 186.7 189.7 197.8 202.9 Agriculture 54.4 157.8 116.4 100.0 229.5 181.5 181.0 181.3 187.6 188.8 Beverages 66.5 221.2 120.3 100.0 210.0 198.8 186.9 167.8 158.3 149.3 Food 58.0 161.8 118.9 100.0 247.4 190.7 193.1 195.7 203.0 202.2 Fats and Oils 68.4 158.7 108.0 100.0 277.3 201.6 202.9 203.8 214.7 204.7 Grains 58.9 161.0 124.7 100.0 281.7 207.4 208.8 211.8 218.1 222.3 Other Food 43.7 166.5 128.0 100.0 177.1 161.1 166.0 170.4 174.1 180.9 Raw Materials 39.3 115.7 108.2 100.0 195.7 150.3 148.5 153.4 165.1 176.4 Timber 28.0 74.6 90.4 100.0 150.5 136.7 129.8 131.7 139.5 164.3 Other Raw Materials 51.7 160.6 127.6 100.0 245.3 165.2 168.9 177.2 193.1 189.6 Fertilizers 23.6 143.9 101.2 100.0 566.7 314.6 225.1 206.8 203.3 226.4 Metals and Minerals 53.4 114.1 125.2 100.0 325.7 193.2 194.1 204.8 218.1 229.0 Constant 2000 dollars b/ Energy 19.3 153.2 79.0 100.0 269.5 137.5 148.5 160.6 208.2 209.1 Non-energy 183.4 176.9 115.3 100.0 214.3 146.9 142.9 145.2 148.8 148.8 Agriculture 188.4 194.5 113.1 100.0 180.8 140.3 138.6 138.8 141.1 138.5 Beverages 230.4 272.7 116.9 100.0 165.5 153.7 143.1 128.4 119.0 109.5 Food 201.1 199.5 115.5 100.0 195.0 147.4 147.8 149.8 152.7 148.3 Fats and Oils 236.9 195.7 105.0 100.0 218.5 155.9 155.4 156.1 161.5 150.1 Grains 203.9 198.6 121.1 100.0 222.0 160.4 159.8 162.2 164.0 163.1 Other Food 151.4 205.3 124.4 100.0 139.5 124.6 127.1 130.4 130.9 132.7 Raw Materials 136.1 142.7 105.1 100.0 154.2 116.2 113.7 117.5 124.2 129.4 Timber 97.0 92.0 87.9 100.0 118.6 105.7 99.4 100.8 104.9 120.5 Other Raw Materials 178.9 198.0 124.0 100.0 193.3 127.7 129.3 135.7 145.2 139.1 Fertilizers 81.6 177.4 98.4 100.0 446.5 243.3 172.3 158.3 152.9 166.1 Metals and Minerals 184.9 140.7 121.7 100.0 256.7 149.4 148.6 156.8 164.0 167.9 Inflation indices, 2000=100 c/ MUV index d/ 28.87 81.11 102.90 100.00 126.91 129.32 130.61 130.61 132.98 136.34 % change per annum 10.88 2.41 -0.29 3.46 1.90 1.00 0.00 0.36 0.50 US GDP deflator 27.53 54.04 81.59 100.00 120.00 122.42 125.13 127.86 140.51 156.83 % change per annum 6.98 4.21 2.06 2.64 2.02 2.21 2.18 1.91 2.22 a/ Commodity price projections as of June 1, 2009. b/ Computed from unrounded data and deflated by the MUV index. c/ Inflation indices for 2008-2020 are projections as of January 28, 2008. Growth rates for years 1980, 1990, 2000, 2008, 2015 and 2020 refer to compound annual rate of change between adjacent end-point years; all others are annual growth rates from the previous year. d/ Unit value index of global manufacture exports in US dollar terms. Sources: World Bank, Development Prospects Group. Historical US GDP deflator: US Department of Commerce. Global Commodity Markets World Bank Appendix B: Description of Price Series 29 Aluminum (LME) London Metal Exchange, unalloyed pri- moisture 8.0%; for year 2004, 67.40% Fe; 2000-03, mary ingots, high grade, minimum 99.7% purity, set- 67.55% Fe, moisture 7.6 - 8.0 %; contract price to tlement price beginning 2005; previously cash price Europe, f.o.b. Ponta da Madeira. Unit dry metric Bananas (Central & South America), major brands, ton unit (dmtu) stands for mt 1% Fe-unit. To con- c.i.f. Hamburg vert price in cents/dmtu to $/dmt SSF (dry ore), Bananas (Central & South America), major brands, US multiply by percent Fe content. import price, free on truck (f.o.t.) US Gulf ports Lead (LME), refined, 99.97% purity, settlement price Barley (Canada), feed, Western No. 1, Winnipeg Com- Logs (Malaysia), meranti, Sarawak, sale price charged modity Exchange, spot, wholesale farmers’ price by importers, Tokyo beginning February 1993; pre- Coal (Australia), thermal, f.o.b. piers, Newcastle/Port viously average of Sabah and Sarawak weighted by Kembla, 6,300 kcal/kg (11,340 btu/lb), less than Japanese import volumes 0.8%, sulfur 13% ash beginning January 2002; previ- Logs (West Africa), sapele, high quality (loyal and ously 6,667 kcal/kg (12,000 btu/lb), less than 1.0% marchand), 80 centimeter or more, f.o.b. Douala, sulfur, 14% ash Cameroon beginning January 1996; previously of Cocoa (ICCO), International Cocoa Organization daily unspecified dimension price, average of the first three positions on the Maize (US), no. 2, yellow, f.o.b. US Gulf ports terminal markets of New York and London, nearest Meat, beef (Australia/New Zealand), chucks and cow three future trading months forequarters, frozen boneless, 85% chemical lean, Coconut oil (Philippines/Indonesia), bulk, c.i.f. Rotter- c.i.f. US port (East Coast), ex-dock, beginning No- dam vember 2002; previously cow forequarters Coffee (ICO), International Coffee Organization indica- Meat, chicken (US), broiler/fryer, whole birds, 2-1/2 tor price, other mild Arabicas, average New York to 3 pounds, USDA grade “A”, ice-packed, Georgia and Bremen/Hamburg markets, ex-dock Dock preliminary weighted average, wholesale Coffee (ICO), International Coffee Organization indi- Meat, sheep (New Zealand), frozen whole carcasses cator price, Robustas, average New York and Le Prime Medium (PM) wholesale, Smithfield, Lon- Havre/Marseilles markets, ex-dock don beginning January 2006; previously Prime Copper (LME), grade A, minimum 99.9935% purity, Light (PL) cathodes and wire bar shapes, settlement price Natural Gas (Europe), average import border price ex- Copra (Philippines/Indonesia), bulk, c.i.f. N.W. Europe cluding UK beginning June 2000; previously includ- Cotton (Cotton Outlook “CotlookA index”), middling ing UK 1-3/32 inch, traded in Far East, c.&f. beginning Natural Gas (US), spot price at Henry Hub, Louisiana 2006; previously Northern Europe, c.i.f. Natural Gas Index, composite index weighted by con- Cotton (US), Memphis/Eastern, middling 1-3/32 inch, sumption volumes for Europe, US and Japan lique- c.i.f. Northern Europe, one of the 15 styles based fied natural gas (LNG) on which the Cotlook A Index is computed Natural gas LNG (Japan), import price, cif, recent two Crude oil, average spot price of Brent, Dubai and West months’ averages are estimates Texas Intermediate, equally weighed Nickel (LME), cathodes, minimum 99.8% purity, settle- Crude oil, Dubai Fateh 32° API, f.o.b. Dubai, spot price ment price beginning 2005; previously cash price Crude oil, UK Brent 38° API, f.o.b. UK ports, spot price Oranges (Mediterranean exporters) navel, EEC indica- Crude oil, West Texas Intermediate (WTI) 40° API, tive import price, c.i.f. Paris f.o.b. Midland Texas, spot price Palm oil (Malaysia), 5% bulk, c.i.f. N. W. Europe DAP (diammonium phosphate), standard size, bulk, Palmkernel Oil (Malaysia), c.i.f. Rotterdam spot, f.o.b. US Gulf Phosphate rock (Morocco), 70% BPL, contract, f.a.s. Fishmeal (any origin), 64-65%, c.&f. Bremen, estimates Casablanca based on wholesale price, beginning 2004; previ- Plywood (Africa and Southeast Asia), Lauan, 3-ply, ex- ously c.&f. Hamburg tra, 91 cm x 182 cm x 4 mm, wholesale price, spot Gold (UK), 99.5% fine, London afternoon fixing, aver- Tokyo age of daily rates Potassium chloride (muriate of potash), standard grade, Groundnut oil (any origin), c.i.f. Rotterdam spot, f.o.b. Vancouver Iron ore (Brazil), Companhia Vale do Rio Doce (Vale, Rice (Thailand), 5% broken, white rice (WR), milled, formerly CVRD) Carajas sinter feed, for years 2005- indicative price based on weekly surveys of export 09, 67.50% Fe (iron) content (dry weight) ores, transactions, government standard, f.o.b. Bangkok Global Commodity Markets World Bank 30 Appendix B: Description of Price Series Rice (Thailand), 25% broken, WR, milled indicative Sugar (world), International Sugar Agreement (ISA) survey price, government standard, f.o.b. Bangkok daily price, raw, f.o.b. and stowed at greater Carib- Rice (Thailand), 100% broken, A.1 Super beginning bean ports 2006, broken kernel obtained from the milling of Tea (Colombo auctions), Sri Lankan origin, all tea, WR 15%, 20%, and 25%, government standard, arithmetic average of weekly quotes. f.o.b. Bangkok; previously A.1 Special Tea (Kolkata auctions), leaf, include excise duty, arith- Rubber (any origin), Ribbed Smoked Sheet (RSS) no. metic average of weekly quotes. 1, in bales, Rubber Traders Association (RTA), spot, Tea (Mombasa/Nairobi auctions), African origin, all New York tea, arithmetic average of weekly quotes. Rubber (Asia), RSS3 grade, Singapore Commodity Ex- Tea, average three auctions, arithmetic average of quo- change Ltd (SICOM) nearby contract beginning tations at Kolkata, Colombo and Mombasa/Nairobi. 2004; during 2000 to 2003, Singapore RSS1; previ- Tin (LME), refined, 99.85% purity, settlement price ously Malaysia RSS1 TSP (triple superphosphate), up to September 2006 Sawnwood (Cameroon), sapele, width 6 inches or bulk, spot, f.o.b. US Gulf; from October 2006 on- more, length 6 feet or more, f.a.s. Cameroonian wards Tunisian, granular, f.o.b. ports Urea, (Black Sea), bulk, spot, f.o.b. Black Sea (pri- Sawnwood (Malaysia), dark red seraya/meranti, select marily Yuzhnyy) beginning July 1991; for 1985-91 and better quality, average 7 to 8 inches; length av- (June) f.o.b. Eastern Europe erage 12 to 14 inches; thickness 1 to 2 inch(es); kiln Wheat (Canada), no. 1, Western Red Spring (CWRS), in dry, c. & f. UK ports, with 5% agents commission store, St. Lawrence, export price including premium for products of certified sustain- Wheat (US), no. 1, hard red winter, ordinary pro- able forest beginning January 2005; previously ex- tein, export price delivered at the US Gulf port for cluding the premium prompt or 30 days shipment Shrimp (Mexico), west coast, frozen, white, No. 1, shell- Wheat (US), no. 2, soft red winter, export price de- on, headless, 26 to 30 count per pound, wholesale livered at the US Gulf port for prompt or 30 days price at New York shipment Silver (Handy & Harman), 99.9% grade refined, New Woodpulp (Sweden), softwood, sulphate, bleached, air- York dry weight, c.i.f. North Sea ports Sorghum (US), no. 2 milo yellow, f.o.b. US Gulf ports Zinc (LME), high grade, minimum 99.95% purity, settle- Soybean meal (any origin), Argentine 45/46% extrac- ment price beginning April 1990; previously special tion, c.i.f. Rotterdam beginning 1990; previously US high grade, minimum 99.995%, cash prices 44% Soybean oil (any origin), crude, f.o.b. ex-mill Nether- lands Soybeans (US), c.i.f. Rotterdam Steel products price index, 2000=100, (Japanese), com- posite price index for eight selected steel prod- ucts based on quotations f.o.b. Japan excluding shipments to the US, including China after 2002, weighted by product shares of apparent combined consumption (volume of deliveries) at Germany, Japan and the United States. The eight products are as follow: rebar (concrete reinforcing bars), merch bar (merchant bars), wire rod, section (H-shape), plate (medium), hot rolled coil/sheet, cold rolled coil/sheet and galvanized iron sheet for building which replaced galvanized sheet for appliances. Sugar (EU), European Union negotiated import price for raw unpackaged sugar from African, Caribbean and Pacific (ACP) under Lome Conventions, c.i.f. European ports Sugar (US), import price, nearest future, c.i.f. New York Global Commodity Markets World Bank Appendix C: Definitions and Explanations 31 Commodity Composition of Indices. Composition of the sub-indices is as follows: Beverages: cocoa, coffee (arabica and robusta), tea; Cereals: barley, maize, rice, wheat; Edible oils: coconut oil, groundnut oil, palm oil, soybean meal, soybean oil, soybeans; Other food: bananas, meat (beef and chicken), or- anges, shrimp, sugar; Raw materials: cotton, rubber, timber (tropical hardwood logs and sawnwood); Fertilizers: DAP, phosphate rock, potassium chlo- ride, TSP, urea; Metals: aluminum, copper, iron ore, lead, nickel, tin, zinc. Constant prices are prices which are deflated by the Manufactures Unit Value Indices (MUV), with a base of 2000=100. The MUV is the unit value index in US dollar terms of manufactures exported from the G-5 countries (France, Germany, Japan, UK, and US), weighted proportionally to the countries’ exports to the developing countries. Dollars are US dollars unless otherwise specified Index Weights. Energy consists of crude oil [84.6%], natural gas [10.8%], and coal [4.6%]. Non-energy consists of metals [31.6%], fertilizers [3.6%], and agriculture [64.8%]. Agriculture consists of bever- ages [8.4%], raw materials [16.5%], and food [39.9%] while Food consists of cereals [11.2%], edible oils [16.3%], and other food [12.4%]. Price Indices were computed by the Laspeyres formu- la. The Energy Price Index is comprised of 3 com- modities; the Non-Energy Price Index is comprised of 34 commodities. U.S. dollar prices of each com- modity are weighted by 2002-04 average develop- ing countries’ export values. Base year reference for all indexes is 2000. Countries comprised of all low and middle income economies according to World Bank income classification. Reporting period. Calendar vs. crop or marketing year refers to the span of the year. It is common in many agricultural commodities to refer to production and other variables over the twelve month period which begins with harvest. A crop or marketing year will often differ by commodity and, in some cases, by country or region. Commodities such as metals use calendar year. Tons refer to metric tons (1,000 kilograms) Global Commodity Markets World Bank 32 Appendix D: Acronyms and Abbreviations ACP African, Caribbean, and Pacific (Lome Convention) kg kilogram API American Petroleum Institute lb pound bbl barrel LME London Metal Exchange BP British Petroleum LNG Liquefied Natural Gas BPL Bone phosphate of lime mb/d million barrels per day CBGA Central Bank Gold Agreement mmbtu million of British thermal units c.i.f. cost, insurance, and freight mt metric ton CIS Commonwealth of Independent States MUV Manufactures unit value CWRS Canada Western Red Spring n.a. data not available DAP Diammonium Phosphate n.q. no quotation c.& f. cost and freight OECD Organization for Economic Cooperation and cum cubic meter Development dmtu dry metric ton unit OPEC Organization of Petroleum Exporting Countries EEC European Economic Community PNG Papua New Guinea EU European Union RSS1 Ribbed Smoked Sheet [grade 1] f.a.s. Free alongside (steamer/ship) RTT Rubber Traders Association f.o.b. free on board SGP Singapore f.o.r. free on rail SICOM Singapore Commodity Exchange f.o.t. free on truck SRW Soft Red Winter fe iron SSF Standard Sinter Feed FSU Former Soviet Union toz troy oz G-5 France, Germany, Japan, United Kingdom, and TSP Triple Superphosphate United States UAE United Arab Emirates GDP Gross domestic product UN United Nations HRW Hard Red Winter US DOE US Department of Energy ICAC International Cotton Advisory Committee USDA US Department of Agriculture ICCO International Cocoa Organization Vale Companhia Vale do Rio Doce ICO International Coffee Organization WBMS World Bureau of Metal Statistics IEA International Energy Agency WFP World Food Programme IRSG International Rubber Study Group WR white rice ISA International Sugar Agreement WTI West Texas Intermediate ITC International Tea Committee $ US dollar ITTO International Tropical Timber Organization ¢ US cent kcal kilogram-calorie Global Commodity Markets World Bank 33 Inside of book cover Global Commodity Markets World Bank THE WORLD BANK For more information on the analysis, please see 1818 H Street, NW www.worldbank.org/prospects/Prospects for the Washington, DC 20433 USA Global Economy/Commodity markets Telephone: 202 477-1234 Facsimile: 202 477-6391 Internet: www.worldbank.org E-mail: GCM@worldbank.org Global Commodity Markets World Bank