Commodity prices climbed 2.3% from April to May after dipping in April, according to Scotiabank's Commodity Price Index report released this morning.
Year-over-year, commodity prices are up 1.9%. Patricia Mohr, Scotiabank vice-president of economics and commodity market specialist, said, "The decline in commodity prices from the April 2011 near-term peak – just prior to the negative economic fallout from excessive eurozone sovereign debt – has narrowed to -14.2% from -19.9% in late 2012."
The increase was driven in large part by potash imports. China's potash imports increased by almost 19% between January and April 2013 to 2.67 metric tonnes. Brazilian imports jumped by 53% year-over-year to 2.2 metric tonnes due to buyers taking advantage of lower potash prices.
"A backup in longer-dated interest rates in recent weeks has triggered a stronger U.S. dollar, creating headwinds for many dollar-denominated commodity prices," the report states. "A shortage of liquidity in China's banking system also unnerved commodity markets last week."
