Agência para o Investimento e Comércio Externo de Portugal


Global commodity prices climb for fourth consecutive month in April; uncertainty elevated heading into May.

Global commodity prices rose for the fourth consecutive month in April, jumping 5.1% month-on-month. The print followed March’s 2.9% increase and marked the strongest result in 15 months.


In contrast to previous months, April’s increase in global commodity prices was entirely due to healthy gains in the energy sector; prices for all the other commodity groups fell from March. Concerns over global oil supply boosted prices for oil and oil-related products, while reduced geopolitical risks and strong economic data in the United States dented prices for precious metals. Base metal and agriculture prices posted just small losses on a month-on-month basis.


Despite April’s robust reading, the recent momentum in global commodity prices appears to be quickly waning. Trade tensions between China and the United States flared in late April following President Trump’s threat to hike tariffs on USD 200 billion worth of Chinese imports. The threat materialized on 10 May, with tariffs being hiked from 10% to 25%. Although the tariff hike was originally planned for the start of the year, President Trump postponed the measure as negotiations advanced. In response to the U.S. action, China announced new tariff hikes on 13 May, effective 1 June. The immediate effect of the trade dispute escalation on commodities was a sizeable decline in prices for oil and soybeans. Prices for some base metals also fell on concerns that it could weigh on global demand, especially China’s, while gold prices increased on rising geopolitical risks.

FocusEconomics Consensus Forecast panelists surveyed this month expect global commodity prices to increase 0.8% in Q4 2019 compared to the same period in 2018 (previous report: 0.0% year-on-year). The increase will reflect healthy gains in precious metal and agricultural prices, while base metal prices will post only a small rise and energy prices will decline. FocusEconomics panelists project global commodity prices to fall 0.6% in annual terms from Q4 2019 to Q4 2020.