Global Commodity Prices Dip 2.5% Representing the Steepest Fall in Seven Years

By Soko Directory Team / Published October 1, 2018 | 6:16 am



economic mobility

Global commodity prices declined by 2.5 percent y/y in August 2018 following July’s 7.3 percent decrease, representing the steepest fall in nearly 7-years.

Prices for both Brent and WTI crude oil declined overall in August to USD 73.1 per barrel and USD 68.0 per barrel, respectively, from USD 74.4 per barrel and USD 70.8 per barrel, respectively, in July. This decline was attributed to the ongoing trade war between China and the U.S., and rising production by key producers including Russia and Saudi Arabia, after the relaxation of the agreed supply cuts.

According to Cytonn Investments monthly report on Global Markets Review, oil prices rose steadily since mid-August following reports that Iranian oils exports had fallen ahead of the reintroduction of sanctions by the U.S., as well as concern regarding the adverse weather in the U.S.

The report further stated that metal prices dropped throughout the summer by 3.0 percent, reflecting concerns about trade tensions and growth prospects in China.

Agricultural prices fell in August by 1.8 percent due to ample supply for key commodities, including coffee and sugar. However, grains prices rose in August by 4.3 percent, driven by rising wheat prices, due to weather-hit harvests in Europe, Russia and some parts of Australia.

According to the latest Consumer Price Indices and Inflation rates by the Kenya National Bureau of Statistics (KNBS), the overall year on year inflation stood at 5.70 percent in the month of September 2018.

KNBS reported that between August and September 2018, Food and Non-Alcoholic Drinks’ Index increased by 0.37 percent due to increase in prices of some foodstuffs outweighing decreases recorded in respect of others.

“This increase in the food index was greatly neutralized by recent fall in prices of maize grain and related products,” read the report by KNBS.

The year on year food inflation, increased from negative 1.15 percent in August 2018 to a positive 0.50 percent in September 2018.

Housing, Water, Electricity, Gas and Other Fuels’ Index, increased by 0.47 percent in September 2018 compared to August 2018.

Further, the index was 7.29 percent higher than in September 2017, mainly on account of the review of tariff structure for electricity.

During the same review period, the Transport Index increased by 7.99 percent compared to the previous month, and 17.29 percent compared to same month in 2017, mainly on account of increase in the pump prices of petrol and diesel which triggered an increase in prices of other transport components.




About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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