An inverse parameter market. A year of war in Ukraine and the simultaneous rise in interest rates have altered traditional dependencies. An unprecedented situation for international trade in raw materials. Commodities linked to industry collapse and agricultural ones soar. Starting with potatoes whose quotation on the German Eex platform has reached 35 euros per quintal. It has made much more than stock exchanges, bitcoin, or government bonds considering that the rise was 72%.
It was not an isolated case: sugar grew by 32% and orange juice (the absolute protagonist of “An armchair for two”) gained 53%. Instead, they collapsed industrial commodities such as gas (minus 50%), petroleum (minus 20%) and even lithium (minus 64%) disappointing the business houses that had focused on this essential raw material for the construction of batteries. A confirmation that, under the marquee, the electric car stage is dramatically empty.
Many words, many investments (more words than deeds) but poor sales results. To win new customers a dramatic price war was started which had in Elon Musk, big boss of Tesla, his prophet. Conversely, the rush of agricultural raw materials is real and this explains, better than any other statistic, why inflation is taking a long time to fall despite the fall in gas, oil and non-food commodities.
Demand is always very strong
First of all, potatoes, which are always subject to very strong demand. The offer, on the other hand, has decreased due to both the drought and the phytosanitary emergency linked to the presence of elateridi, which has led to a decrease in production: the infestation of this beetle makes marketing unsuitable, because it generates holes in the potato that large-scale distribution tends not to sell”. In these cases the product is destined for other uses, “such as distillation, methanization, zootechnics…”
The electric car does not drive: the lithium collapses
Not one of the main energy commodities costs less than a year ago. In the field of metals we find gold that has risen above $2,000 an ounce, following the hypothesis of a halt in the restrictive policy by the Federal Reserve. In recent days the yellow metal has dropped but compared to a year ago it grew by 4.5%.
Increased the increase in silver now above 6%. Then almost all minus signs: -10.4% copper and -64% lithium, two metals in great demand for electric cars that are struggling to tear the market apart. It is no coincidence that platinum, +20%, is required for its anti-emissions function in the mufflers of increasingly less polluting vehicles with endothermic engines.
Lastly, steel scores -25%. In the agricultural world, instead, wood (minus 60%), milk (-23%) and butter (-34.5%) and even wheat (-38%) is at the center of numerous international negotiations linked to the Russo-Ukrainian war. Overall, second PricePedia, the total commodity index shows an annual fall in prices of 14%. And for 2024 it expects a decrease of 5%. For energy raw materials, a fall of -21% is expected and that of industrial prices shows a decrease of 12%.