Global | Commodities took center stage in a unique year

A year ago, few managed to glimpse what 2022 was to be like geopolitically and socially, let alone economically. In this complex environment, one of the key asset classes was commodities.

Key points

• Key points:
• The year began with the invasion of Ukraine by Russian forces. In response, the world's major economies imposed sanctions on Russia, creating uncertainty and high concern about the future of energy commodities, as Russia is the world's second largest crude oil producer and a key player in Europe's energy supply.
• The US Federal Reserve also began an interest rate hike cycle that, at the time, seemed premature. Today, it seems to have been too late. This shift in policy contributed to the weakening of the US and world economy, which should have been accompanied by a significant decline in commodity prices that did not occur.
• This mismatch between activity and prices, resulting in part from the expectation of weak future supply, aroused the concern of markets and governments, not only because of the high cost of basic goods, but also because of possible shortages, especially in grains and other agricultural commodities. There were fears of a repeat of the 2011 protests associated with the increase in wheat prices.
• Now, 2022 closes with the disappointment of declines in most commodity prices, but still at levels above those that would be consistent with the observed and expected level of activity.

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