Commodity markets suffer 'super squeeze' due to supply constraints.

Commodity markets are currently experiencing a "super squeeze," characterized by higher prices driven primarily by supply constraints rather than increased demand. Factors contributing to this situation include geopolitical risks such as the ongoing Israel-Hamas conflict and the Ukraine war, which have negatively impacted global trade, and climate change, which disrupts supply chains and commodities supply, particularly in the agricultural sector. According to HSBC, this issue is only expected to worsen as geopolitical and climate risks continue to exacerbate the situation.

January 26, 2024
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