Most popular commodities in 2024, what are the biggest winners?

The commodities trading market has evolved significantly in 2024. Geopolitical conflicts and a shifting global economy, combined with technological progress, environmental regulations, and worldwide supply chains, are all impacting traditional commodities like gold and oil, as well as emerging commodities like lithium and sustainable energy resources.

Interestingly, a June 2024 article by S&P Global reports that, “Demand for lithium chemicals is expected to grow by 29% in 2024, reaching 1.2 million metric tons of lithium carbonate equivalent (LCE), data from S&P Global Market Intelligence shows.

But the market is still expected to record oversupply of 34,000 metric tons of LCE, according to forecasts by Commodity Insights.” Saying that, the article does however add that,” Lithium prices have stabilised since the start of 2024 as producers decrease output amid stubbornly slow demand growth from the electric vehicle sector.”

Broader commodities outlook by EUI

EUI (Economist Intelligence) says that “After three years of extreme volatility, commodities prices are set to broadly stabilise in 2024.

However, adverse weather conditions, escalating geopolitical tensions and soaring shipping costs are among the risks to watch to commodity price forecasts.”

Potential impact of the upcoming U.S. elections on commodities

The upcoming U.S. elections in early November are also predicted to have some impact on commodity prices, with speculation rife. Interestingly, this Oxford Economics research briefing dated 14 October 2024 suggests that “While a Harris presidency, assuming Democratic control of Congress, would have a minor positive impact on commodity prices, a Trump presidency with Republicans controlling Congress has the potential to lead to lower commodity prices.”

According to a Reuters article dated 13 October 2024, “Gold prices hit record highs on Thursday as uncertainty surrounding the U.S. presidential elections and the war in the Middle East prompted investors to seek out the safe-haven asset ,while easing monetary policy environment kept prices elevated.”

In fact, CNBC also reports that, “Gold prices have rallied to record highs this year, propelled by U.S. interest rate cut expectations, as well as the bullion’s appeal as a safe-haven asset. Gold futures recently hit another all-time high of $2,549.9 per ounce.”

Primary commodity price hikes

An October 2024 IMF Commodity Special Feature reports that, “Primary commodity prices increased between February and August 2024, driven by natural gas, precious metal, and beverage prices. In oil markets, supply cuts by OPEC+ (Organization of the Petroleum Exporting Countries plus selected nonmember countries, including Russia) and geopolitical tensions in the Middle East offset strong non-OPEC+ supply growth.

Beverage prices continued their ascent, which was driven by the impact of El Niño on tropical crops. Gold prices soared owing to geopolitical uncertainty and rising anticipation of rate cuts.“

Agricultural commodities, are price pressures easing?

Euromonitor International reports that, “Production of key agricultural commodities such as wheat, corn, rice, and soybeans is forecast to be strong in 2024 and 2025, supported by favourable growing conditions and improved productivity.

For instance, higher wheat output in the US, Australia, China, Kazakhstan, India and Canada is anticipated to offset weaker production in Russia and Europe. Meanwhile, global rice production is projected to reach record levels, driven by expanded acreage, adequate rainfall and higher yields.

With rice inventories at a record high in India, the country plans to ease some of its export restrictions, which could further lower prices.”

Commodities biggest winners and losers of 2024?

CNBC reports that in 2024, several agricultural commodities have experienced dramatic price increases, driven by supply disruptions, weather challenges, and rising demand. Cocoa prices, for example, surged by 66%, reaching an all-time high of $11,722 per metric ton in April due to bean shortages caused by heavy rains and disease in leading producers Ivory Coast and Ghana.

Hedge funds capitalised on these movements, adding to price volatility. Although cocoa prices have since eased, they remain above average, with stabilisation expected as weather conditions improve in West Africa.

Similarly, eggs and orange juice have seen sharp price hikes due to supply constraints. Egg prices rose over 62% following an avian flu outbreak in poultry facilities, impacting 18.5 million hens in the U.S. alone.

Meanwhile, orange juice futures spiked to a record high, driven by a decline in production from adverse weather in key producing regions, including Florida and Brazil. Experts suggest orange juice prices will likely stay high over the coming year.

Rubber and coffee prices have also climbed, with rubber up nearly 30% due to limited rainfall in major producing nations Thailand and Indonesia and heightened demand from China’s electric vehicle industry. Coffee prices rose by 25%, influenced by El Niño-induced weather disruptions across Southeast Asia, particularly in Vietnam and Indonesia, leading to reduced yields in key coffee-growing areas.

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