Sugar prices reached a four-month high on Tuesday after India, the world's largest consumer, lifted duties on the import of raw sugar to bridge a shortfall in domestic production.
Oil consumers and producers united yesterday to warn that extreme price volatility was dangerous for the world economy, but disagreed on what an appropriate price should be.
Global oil demand will collapse next year and commodities will not return to the highs they reached this summer in the foreseeable future, two authoritative reports said on Tuesday as they forecast a long and painful worldwide recession.
The world economy will consume in the next five years far less oil than previously assumed, the western countries' energy watchdog said on Friday in a further sign of the impact of the global economic crisis on commodities markets.
Merrill Lynch warned that oil prices could fall as low as $25 a barrel next year if the recession affecting the US, Europe and Japan extended to China, the main driver of demand growth in commodity markets in recent years.
Gold prices will rise next year as the financial crisis pushes more investors into the precious metal safe haven, according to delegates polled on Tuesday during the London Bullion Market Association annual meeting in Kyoto.
Gazprom, Russia's gas monopoly, on Tuesday predicted oil prices would reach $250 a barrel in 2009. The prediction came as the developed world's energy watchdog warned that record high oil prices were needed to choke off demand in order to balance the oil market.
India 's threat to impose a blanket ban on agricultural commodities futures trading would not ease food prices, analysts, traders and food executives warned, describing the measure as political posturing.
Rice prices surged to a fresh 34-year high on Tuesday as the Philippines awarded a tender for the staple at an average price of $708 a tonne, up almost 50 per cent from the price it paid in late January. The sharp rise reflects a market suffering from tightening supply after key producers India and Vietnam this month both imposed further restrictions on rice exports. Supplies from Thailand are also low, traders said.
Global food prices will come under further pressure on Monday as benchmark prices for cereals at much higher levels come into operation, making it almost inevitable that a second wave of food price inflation will hit the world's leading economies.
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