By Sam Boughedda

In a analysis piece launched Wednesday, Fiona Boal, S&P Dow Jones Head of Commodities and Actual Property at S&P Dow Jones Indices, mentioned meals and vitality inflation issues drove up the costs of commodities in Could.

“Document inflation prints, export embargos and import bans helped the , the broad commodities benchmark, to publish one other month-to-month acquire in Could, ending the month up 5.1% and bringing its YTD efficiency to 47.0%,” wrote Boal.

She added that the Ukraine-Russia battle disrupting the circulate of vitality and agricultural commodities out of the international locations drove vitality and grain markets greater. As well as, the prospect of upper rates of interest and recession fears continued to stress metals markets, whereas the EU agreeing to a partial ban on Russian oil and China lifting some covid-related restrictions additionally boosted vitality costs and helped lengthen their bull run.

Boal defined {that a} “rising concern amongst central bankers and others concerning meals safety serves to focus on the significance of agricultural commodities to the worldwide financial system from each a societal and environmental perspective.”

Extreme restrictions on wheat exports from Ukraine and Russia, “mixed with worsening harvest prospects in China, elements of Europe and the U.S., in addition to an export ban by main producer India, have tightened shares and exacerbated world meals provide issues. Because of this, world wheat costs have skyrocketed,” concluded Boal.

Power holds the largest weighting within the index, with WTI the most important holding.