Figure 1.5: Aggregate Commodity Prices

conditions remain broadly accommodative, with elevated equity valuations and subdued yields. In EMDEs, financing conditions have tightened in recent months because of policy rate hikes in some countries (Brazil, Mexico, and the Russian Federation), pandemic setbacks, and country-specific risks. Net portfolio inflows to EMDEs have been weak in anticipation of the eventual policy normalization by the Federal Reserve and a broader decline in risk sentiment.

Commodity prices remain well above their prepandemic level, with several of these international prices reaching all-time highs (figure 1.5). Elevated shipping costs have contributed to higher import prices for some commodities while the spread of the Delta variant of the coronavirus has contributed to increased uncertainty about demand. Energy prices have seen a particularly sharp increase in recent months, especially for natural gas and coal, which have risen by more than 50 percent since the start of the year. Oil prices rose above their prepandemic levels in the first half of 2021 but have plateaued more recently due to demand concerns and the gradual reversal of previous production cuts by the OPEC+ alliance. Metal prices remain generally stable on aggregate, with some outliers. Tin prices reached an alltime high amid supply disruptions and continued strong demand from the electronics sector, whereas copper prices declined slightly from recent all-time highs amid the spread of the Delta variant and a softening in economic indicators in China. Agricultural commodity prices have been volatile, with weather-induced supply concerns pushing up the prices of wheat, cocoa, and coffee.

FIGURE 1.5: Aggregate Commodity Prices Sources: Bloomberg; World Bank. Note: The last observation is July 2021.

140 Index, 2010=100 60 100 20 Jan-19 May-19 Sep-19 Jan-20 May-20 Sep-20 Jan-21 May-21 Energy Metals Agriculture July-21

Commodity prices remain elevated, with several stabilizing at record highs.