Home Commodities: Towards an unsustainable volatility…

GEAB 148

The monthly bulletin of LEAP (European Laboratory of Political Anticipation) - 15 Oct 2020

Commodities: Towards an unsustainable volatility…

For the last 20 years, the international prices of many commodities have been set within a framework of globally recognised futures and spot contracts. Today, as many contracts detach from the delivery of the underlying physical commodity, volatility is surging on the back of QE and a host of new retail speculators have entered the marketplace; the whole system is becoming less stable. As on-line markets turn their attention to new speculators in search of quick cash settlements, many markets are demonstrably failing to fulfil their principle role as a distribution network for future production. We anticipate that in these rapidly evolving and volatile markets – driven by ever-increasing trade tensions ‘post-covid’ – the present global economic ecosystem will fracture even further, ushering in an era of more regionally based physical exchanges, bilateral trade deals and flexible pricing regimes. 

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Contents

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