Nothing seems to be immune to the contagion of the U.S.-led credit crisis.
Scotiabank's Commodity Price Index, which measures price trends in 32 of Canada's major exports, fell 8.9% month-over-month in August, its first drop this year.
Oil and gas led the decline in August as prices decreased 20% from July averages. Plunging oil prices in Texas led to a double-digit decline in Edmonton light crude oil and an even bigger drop in Canadian natural gas export prices.
That fall has been driven primarily by uncertainty in the financial markets and continued volatility in commodity prices as investors move billions of dollars between financial assets and commodities like gold and oil.
The Scotiabank report noted that wild swings in the oil market, from a record high of US$147.90 per barrel on July 11 to a low of US$90.51 on September 16, resulted from hedge funds repositioning their portfolios.
Uncertainty over the strength of the U.S. dollar as a result of the federal government's proposed US$700 billion bailout for financial institutions will continue to drive up oil prices until the credit crisis has been resolved.
The report also found that prices for such base metal as zinc and nickel have likely peaked during this business cycle and will continue to drop over the next several years, in parallel with an expected slowing of global economic growth.
Declines, however, will be more limited than in past business cycles as demand stays strong for copper, potash, uranium and molybdenum. Potash prices rose to US$802.50 per tonne from US$763 in July and are expected to increase to around US$900 by year's end.