Raw materials are the heart of inflation, a main element that determines the behavior of prices, and what has been happening in recent months is the best example.
Since the first voices appeared, at the beginning of 2021, warning of the danger of entering a strong inflationary spiral in the world after Covid-19, and even warning of the possibility of entering a situation of hyperinflation, the price of main basic resources has not stopped rising.
The Bloomberg Spot Commodity Index is up 23.4% for the year and extends all-time highs. It is already trading 21% above the peak it touched in 2008, just before the outbreak of the global financial crisis. Now, basic resources continue to contribute to the increase in inflation, with the index trading 31% above the 2021 average.
Energy leads gains
The raw materials market can be divided into three blocks: energy resources, agricultural resources and metals. So far this year, the former are the ones that are contributing the most to the advances in raw materials, with a rise of 44.7% for the index that includes the price of oil, diesel, gasoline and natural gas. Agricultural resources, for their part, became more expensive by 22.06% on average in the year, and metals by 22.52%, a rise half as strong as that of energy resources.
The data, subject by subject, is clear: so far this year the price of natural gas in the United States has risen 163.7%, and barely two months have passed, while in Europe the price has risen by 190% since the first day of the year.
Oil, for its part, has shot up 44% and exceeds $110 per barrel. The memory of crude oil trading below 20 dollars, less than two months ago, already seems from another century. Now it has infected crude oil derivatives, such as gasoline or diesel, which are up 50% and 65%, respectively.
In the same period, metals are experiencing much lower rises. Aluminum is the one that rises the most in the year, with an advance of 32.4%, and its increase in cost is closely related to energy prices, since it is the metal that consumes the most for its production.
After him, the price of nickel rose 29.6% and that of iron ore 20.2%. Copper, for its part, rose 6%, a rise that is completely dwarfed when compared to the main raw materials on the floor.
food hit
As for food, the crisis in Ukraine is having a huge impact on prices, due to the impact that the deterioration in the production of some cereals may have in Russia and Ukraine, two major producers of materials such as wheat, barley, oil sunflower or corn.
Wheat is the one that rises the most in 2022, with a rebound that is already close to 74%, while corn is revalued by 28.8%. Food prices, according to the basic basket monitored by the United Nations (UN), have returned to their 2011 highs, and some analysts warn of the danger of more geopolitical tensions due to the increase in food prices. In 2011, for example, they relate them to the emergence of the Arab Spring.
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