A sharp increase in metal and mineral prices and improving oil prices gave the all-commodity price index of Scotiabank a small boost in July. The gains more than offset softening forest products and agricultural prices. Economist Patricia Mohr said the all-items index is expected to increase further during the next several months alongside a recovery in energy and precious metal prices and continuing strength in base metals.
“The overall impact of Middle East developments has been to boost commodity prices important to Canada’s trade balance, although the impact on grain prices has been negative,” Mohr said in reference to the invasion of Kuwait by Iraq.
The metal and mineral sub-index jumped in July. Copper prices have benefited from a supply shortage; aluminum has also seen its price rise, although the supply-demand balance for the metal is not as tight. The all-items index, compared with one year ago, is down by 3.5%.
The all-commodity index tracks export prices of a variety of Canadian commodities, which are weighted according to their 1984 export values, except crude oil where the value of net exports is used.
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