The dynamics of commodity markets remained volatile this year: prices for wheat, coffee, sugar, wood, and energy rose steadily, while gold prices fell despite accelerating inflation.
The cost of coffee in 2021 has doubled amid adverse weather conditions in Brazil, which destroyed most of the crop, writes MarketWatch.
“There was a terrible drought, and then there were frosts three times,” said Sean Hackett, president of Hackett Financial Advisors.
According to Trading Economics, prices for Arabica coffee at the beginning of the year were around $1.25 per pound, and in early December reached a high since 2011 at $ 2.49. Currently, prices are around $2.25.
Sugar prices have also risen amid volatile weather in Brazil: they have peaked since early 2017 at more than 20 cents a pound in mid-November, up from 15.8 cents in early January.
Oil futures showed a significant rise as demand outweighed supply, says Teucrium Trading CEO Sol Gilberti. The supply shortage is partly due to the growing frustration of investors and politicians in fossil fuels.
“Manufacturers are experiencing social pressure, regulatory pressure, and economic pressure,” he said.
In early January, Brent oil prices jumped to $87 a barrel from $ 51 a barrel.
Meanwhile, natural gas prices in Europe soared more than sevenfold – to a record 153 euros per megawatt-hour against 20 euros in early January.
“No one has enough alternative energy sources to stop using hydrocarbons, so demand is rising and prices are rising,” Gilberty said.
Spring droughts in key wheat production regions, including Canada, Russia, and the United States, have negatively impacted yields. Prices rose from $ 6.40 per bushel in early January to $ 8.56.
In turn, wood prices soared to a new record high of more than $ 1,600 per 1,000 board feet. For comparison: at the beginning of the year they were around $ 878. The jump in prices came as a shock to the construction industry. “It was a bubble,” Hackett said.
Meanwhile, the most unexpected dynamics in 2021 is shown by gold prices, which fell by about $1,944 per troy ounce at the beginning of the year to $1,785. Prices have fallen despite accelerating consumer inflation in the United States.
In Brazil in 2021, there were two cataclysms at once: first abnormal frosts, then abnormal drought. The plantations have been hit hard, and the world’s coffee has dwindled. So we have to fall in love with some other drink? Read the answers in this story.