Tuesday, January 5, 2010

Commodity Prices Increasing in 2010 Says IMF

Commodity Prices Increasing in 2010

The IMF just released its view on what the price movements of commodities will be in 2010, and in general, like me, they believe a stronger demand will push the prices higher as Asian markets start to rebound.

Thomas Helbling from the IMF Research Department added though that commodity prices would be tempered by higher stocks, which could keep prices in a number of cases from exploding upwards, but still should increase gradually.

Another factor of course is whether we're really in a recovery, and if that will translate into increased demand.

For the Asian markets that could be the case, although Western markets and the U.S. aren't anywhere near a recovery, contrary to mainstream press accounts.

Even so, the commodity price index of the IMF has risen by 40 percent from February 2009, and that was during what was considered a down year.

The commodity price index of the IMF should increase to much higher levels this year, even with commodity inventories high.

Over the long term the IMF expects commodity prices to remain high in general, and not fall down to historical levels.

Commodity Prices Increasing in 2010

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