2021 had seen many commodity prices rise by 15-20% and one would think 2022 should be a more stable year but looking at the first-month price rises it is getting extremely volatile.
If the major energy commodities are to be looked at these are price shocks that the world would get impacted in the next few months. The price rises are not only due to the low inventory levels but the risk premium on the tensions between Russia and Ukraine.
On the other end of the spectrum, metals are near the higher price bands waiting for any risk to edge them out for the next price shock. But here you will be able to find some downside risks as China is dealing with Covid and pollution reduction by shutting down industrial zones impacting the demand in short term.
And lastly, the agriculture segment, this would be a surprise this year and not in a good way. This is because urea and other fertilize shortages have already destroyed the sowing season and the food stocking up by China that began last year will only deplete the inventories further. Even here Russia and Ukraine conflict would play a major role in Wheat.
In a nutshell, this year's start has brought more volatility to the world of commodities. This would be great if you are a trader but as a consumer, you would not be able to adjust the additional price hikes on the ones that are already due from last year.