Commodity prices going hot and high in 2010: IMF
Tuesday, 5 January 2010
LONDON, Jan 04 (Commodity Online): Commodity prices are going to be hot and high in 2010, says a report from the International Monetary Fund (IMF). IMF that is on a mission to sell gold reserves said that in the wake of improving global economy, demand for commodities will rise this year.
Saying that prices of many commodities will increase further in 2010, IMF said in its commodities forecast said that the demand side should generally be the main source of upward pressure, as global activity is widely expected to expand at a faster pace.
The report said commodity price prospects also depend on global macroeconomic conditions. "Information about expected future spot prices derived from key commodity futures options confirms that investors anticipate higher prices in 2010, but the probability of another commodity price spike would seem remote over the near term," IMF said.
As per the agency, the demand is expected to continue rising at a solid pace as industrialisation continues in emerging and developing economies.
The global agency said commodity prices will remain high in 2010 by historical standards over the long term as the industrialisation of emerging countries supports consumption.
"Accommodating this demand will eventually require further capacity expansion in many commodity sectors, with some need to tap higher-cost sources," IMF said in the report.
Analysts said the IMF forecast of higher commodity prices in 2010 could worry central bankers because of the threat of higher inflation.
Saying that prices of many commodities will increase further in 2010, IMF said in its commodities forecast said that the demand side should generally be the main source of upward pressure, as global activity is widely expected to expand at a faster pace.
The report said commodity price prospects also depend on global macroeconomic conditions. "Information about expected future spot prices derived from key commodity futures options confirms that investors anticipate higher prices in 2010, but the probability of another commodity price spike would seem remote over the near term," IMF said.
As per the agency, the demand is expected to continue rising at a solid pace as industrialisation continues in emerging and developing economies.
The global agency said commodity prices will remain high in 2010 by historical standards over the long term as the industrialisation of emerging countries supports consumption.
"Accommodating this demand will eventually require further capacity expansion in many commodity sectors, with some need to tap higher-cost sources," IMF said in the report.
Analysts said the IMF forecast of higher commodity prices in 2010 could worry central bankers because of the threat of higher inflation.