16th Oct 2014 17:08
Washington (Alliance News) - Prices of most commodities including oil are likely to remain soft for the rest of 2014 and much of next year, the World Bank said Thursday.
The World Bank's energy price index fell about 6% in the July-September period amid strong supplies. Harvest prospects for commodity crops are strong, too, the Washington-based development lender said in its latest Commodity Markets Outlook.
Meanwhile, the eurozone's tepid economic recovery has ground to a halt, and some of the fast-growing emerging markets and developing economies are seeing their expansions moderate.
"A broad-based expansion in commodity supply is coinciding with weakness in global growth, especially in emerging economies, where most of the demand expansion has been taking place," said Ayhan Kose, director of the World Bank's Development Prospects Group.
Oil prices had dropped below 90 dollars per barrel, despite conflicts with energy market ramifications in Ukraine and Iraq.
Potential bumper crops should further lower food prices, which have fallen from 2012 peaks. The World Bank called it "good news for the urban poor."
Coffee and cocoa prices have spiked, while fertilizer prices are lower this year.
The World Bank also forecast falling prices for gold, copper and iron ore.
"Lower commodity prices will help ease balance of payments pressures in food- and energy-importing countries," said John Baffes, senior economist in the Development Prospects Group. "However, commodity exporting countries may feel the pinch because of lower export earnings."
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