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After an exceptional year of soaring commodity prices, 2022 might herald a return to normal, according to the annual Cyclops report, which is a reference on the subject… But the year promises to be even more uncertain than the previous ones.
The experts have learned from their mistakes and are making their prognosis very cautiously following the last two improbable years that the world of commodities has just experienced. Thus, for the circle Cyclope which is a reference in the field, this year 2022 should in theory mark a return to normal, or even a drop in the prices of certain products, with however still very high levels.
But the experts, including the boss of the Cyclops circle, the French economist Philippe Chalmin, open several umbrellas to protect themselves. The sanitary umbrella first. Because these forecasts are built with an assumption of stable health conditions, without predicting the emergence of a new variant. There are also climatic hazards, in particular the strength of the El Nina disturbance which might affect harvests in Latin America. And of course the geopolitical hazards “ If Russia invaded Ukraine, the barrel of oil would explode the ceiling, and there would be a shortage of gas to be expected in Europe “, notes our interlocutor, who also points to possible agricultural consequences.
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Another unknown is the appetite of the Middle Kingdom: China’s import levels will be decisive, for agricultural markets in particular.
A few certainties alongside all these unknowns: the logistics crisis is not over and container freight rates will remain high for several more months. At the beginning of January 2022, “ 11.5 million containers – full or empty – were waiting in the 13 most important ports on the planet “, reports the economists of Cyclops. The situation should not ease before 2023.
Second certainty, the energy crisis will also last, at least until the end of winter, or even longer, because it will then be necessary to rebuild stocks which are currently very low. The sector will also have to deal with China’s needs for liquefied natural gas: in 2021, the country became the leading importer of LNG ahead of Japan.