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Commodity Market: Instability Is Intensifying in Global Arena

Representational Image: Collected

Representational Image: Collected

There is intense instability in the international commodity market. The effects of the novel coronavirus epidemic, macroeconomic policies and multifaceted disruptions in the supply cycle are responsible for the apparent instability. This was stated by Mikael Gelchi, Chief Executive Officer of Lewis Dreyfus Company (LDC). He said this in a recent interview with Reuters.

Mikael Gelchi said that the prices of agricultural products have increased the most in the world market. In the first half of the year, the profit of LDC has also increased significantly. Although it is below the record profit of a decade ago. Mikael said that there is a radical difference between the international commodity market of 2010-11 and the current commodity market. Now the scene is turning towards a series of instability.

One after another of the coronavirus has pushed the commodity market to the brink of disaster. Markets are becoming more volatile on the question of the US Federal Reserve's declining currency support. There are various obstacles including cargo clutter, container crisis, high level of transportation cost. According to Gelchi, due to these obstacles, the supply cycle of the product is not suddenly becoming normal. This year, all types of products, including fuel, have received additional price increases. This is currently signaling a shift in the world’s low-carbon economy.   


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