commodities

With the onset of the COVID19 pandemic and the application of the first measures of social isolation and the closure of non-essential economic activities, the financial market collapsed and the commodities market began a new cycle of price contraction.

The recovery of commodity prices has had two moments. The first was marked by strong injections of liquidity into the markets and low interest rates. The second moment occurred when the upward trend extended beyond the recovery of previous levels throughout 2021.

The effect of rising commodity prices has been a combination of multiple factors. Its behavior, although presented as a short-term trend, may induce inflationary processes in the long term.

The slowdown in economic activities impacted manufacturing production linked to the world market, and likewise food processing and distribution. The world is approaching a food consumption crisis. There are growing problems in the production and distribution of basic foods that are widespread.
The effect of the economic and production slowdown caused by COVID-19 has been a rise in food prices and in the prices of basic goods, which, however, is not reflected in consumer price indices, in general, due to the strong deflation of fuels and other raw materials.
With the economic rationale of free markets, free international food trade became more profitable and the notion of food security was abandoned. We now see the consequences on prices and the risks on the lack of supplies