By Almot Maqolo.
Harare, Zimbabwe (News of the South) – The World Bank said the agriculture price index as a whole is expected to remain stable this year as declines in grains are expected to be offset by price rises for oils and meals and raw materials.
The group said this in the latest April Commodity Markets Outlook report which provides detailed market analysis for major commodity groups, including energy, metals, agriculture, precious metals and fertilizers.
The report includes price forecasts to 2030 for 46 commodities and provides historical price data.
“Favorable conditions have pushed stocks-to-use ratios to 15-year highs for wheat, maize and rice,’” said John Baffes, Senior Economist and lead author of the Commodity Markets Outlook.
“Assessments point to a surplus this year and next for global supplies of key grains.”
The World Bank said beverages, which include coffee, cocoa and tea prices are forecast to drop more than 6 percent in 2017 owing to greater than expected supply.
Agricultural raw materials are projected to rise 4 percent.
The World Bank noted that the end of the El Nino/La Nina cycle limits upside price risk for the 2017 to 2018 agricultural commodity forecasts.
Metals prices are projected to jump 16 percent this year due to strong demand, especially from China, and supply constraints, including mine disruptions in Chile, Indonesia and Peru.
It said labour strikes and contractual disputes at large mines have contributed to higher copper prices.
However, precious metals are expected to decline by 1 percent this year and 1 percent next year as benchmark interest rates rise and safe-haven buying ebbs.
Meanwhile, the prices for energy commodities which also include natural gas and coal are projected to jump 26 percent this year and 8 percent in 2018.
In line with oil price forecasts, natural gas is anticipated to gain 15 percent this year, led by a jump in U.S. prices.
Coal is seen climbing 6 percent in this year on the back of earlier supply restrictions in China, which consumes half the world’s coal output.
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