Non-oil commodity prices on the rise

W orld commodity prices have strengthened signifi- – candy since mid-1999, as evidenced by the 25% rise in the IMF index of primary commodity prices in the past 12 months. While much of the credit for this recovery goes to the upturn in oil prices, non-fuel commodities have also shown strength this year with the index of non-fuel commodity prices rising by 5% over the nine months to June this year. However, non-energy prices have yet to recover fully from their late 1990s slump when they fell by as much as 25% over the period between the beginning of 1997 to the middle of 1999. The IMF non-fuel commodity price index fell by 14.7% in 1998 alone. Prices are expected to continue the recovery that started in 1999, due to stronger economic growth and reductions in excess supply of certain commodities. Cycles are the dominant feature of movements in world