SM Commodities Index - August 2022

12 September 2022

The latest prices and key trends from the SM Commodities Index.

Crude oil

Crude oil prices fell in August primarily due to weak global demand, according to S&P Global. Mainland China's oil demand has fallen year-on-year for the past five consecutive months and will continue to see declines because economic recovery is sluggish.

Global demand remains below production capacity, and periodic interest rate increases to combat inflationary pressure will keep it that way. On top of this, Russian oil is still making its way into the market, as export flows are at or above pre-invasion levels by pivoting to Asia from Europe.

Cotton

Cotton prices also fell in late July and early August on the market reacting to concerns about global growth. The cotton market is concerned about continued global monetary tightening and Chinese lockdowns leading to a potentially strong decline in demand.

The second half of August saw some rebound in prices as US drought has lowered new harvest supplies for this autumn, though the price did not recover back to highs seen over the last few months.

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