by Helen Sanders, Editor
As I sit here with my morning cup of tea and toast, with the radio on, while the rest of the country seems to be out on the beach eating chocolate ice cream and/or drinking flasks of lukewarm coffee, depending on where in the world you happen to be, it occurs to me just how reliant we are on commodities. Energy, metals, grain, rice, tea, coffee, cocoa are all essential features of our lives, virtually every day of the year (or in the case of precious metals, they don’t feature quite enough for my liking). For corporations, the reliance on commodities either as inputs or outputs is often fundamental to the business. Over recent years, we have seen unprecedented volatility in the price of commodities of all sorts, fuelled by supply peaks, a decline in demand, currency fluctuations, ongoing economic uncertainty and growing demand for commodities by the investment community. So as it is often said that opinions are the cheapest commodities in the world, what could we witness in the future, and how is the corporate community responding?
A little crystal ball gazing
According to the IMF’s World Economic Outlook (WEO) in July 2010, world growth is projected at 4.6% in 2010 and 4.3% in 2011. This forecast is around 0.5% higher for 2010 than previously stated in April 2010, reflecting stronger than anticipated activity during the first half of the year and enhanced by attractive prospects in Asia, particularly China,
“Overall, macroeconomic developments during much of the spring confirmed expectations of a modest but steady recovery in most advanced economies and strong growth in many emerging and developing economies.” (WEO, July 2010)