The escalation of prices in the last months of commodity prices (example: soybeans, corn, iron ore and copper) has promoted a debate among economists about their continuity and related reasons.
But what does commodities mean? Economic expression in English, which refers to a specific good or product of primary origin marketed on the world stock exchanges, with high commercial and strategic value. Usually, associated with mineral, vegetable or agricultural resources due to its sphere of influence in the industrial sector and basic needs of the population.
Despite the consensus around the definition, there is a disagreement among economists about the commodities cycle. Some argue that it has been a continuous cycle since 2008 (global economic crisis), others argue that it is a typical market behavior (losses recovery in 2020).
However, there are a number of objective reasons for the recent behavior of commodities. As a result of the global economic shock caused by the pandemic, there is a synchronized global recovery of economies. This more or less slow synchronization is taking place and, regardless of the pandemic continuity, economic agents have been adjusting to the new reality (contrary to the initial ignorance).
The growing concern with sustainability may increase the demand for minerals related to such change. Obviously, technological options cannot be ignored, as they recognise different challenges, results and consequences. And, without a serious and ethical evaluation, the consequences may not be mitigated.
The World Economic Forum estimates that 1.5 billion people will be middle class in Asia over the next nine years, with emphasis on India, which is expected to grow between 6.5% and 7% in that period. This is indicative of a demand for agricultural products and whose environmental consequences will be very high.
And, of course, successive currency injections by different world economies will boost demand and prices for metallic commodities for investments in infrastructure and/or reorganise production chains. However, this monetary response reflects other challenges to the economy (continuous cycle of crises due to the non-relationship with the precious metals available).
