How the commodities supercycle will foment unrest around the world
Commodities, including metals, energy and agricultural goods have seen prices climb steadily. With many societies are already on edge, we could see a new round of social unrest around the world.

Are we in a new commodity supercycle? asks The Economist. Many raw materials enjoyed strong gains last year, with copper prices up by more than 25% since the start of 2020 and iron ore surging by 75%. China responded to Covid-19 with an infrastructure-led stimulus plan that turned the country into a “voracious importer” of industrial metals and food.
As demand spiked, supply contracted; Covid-19 disruption meant Chilean copper mines and Brazilian iron ore excavators were unable to operate at full capacity. Even energy prices are perking up now: a cold winter has sent Asian liquefied natural gas prices to a record high. Bank of America analysts think the trend will continue, notes Zero Hedge. It says that a cocktail of stimulus, reflation and economic reopening should ensure continued robust commodity demand. Copper could end the year at $9,500 a tonne, up from $7,973 now.
Surging food prices are “one of the most dangerous features” of the latest commodity surge, says Albert Edwards of Société Générale in a note. Grain prices have risen more than 50% in just six months. Droughts in South America have worsened the shortages. As in 2011, a central bank “fire-hose” of monetary stimulus appears to be pumping up agricultural markets. The world’s poor might be about to fall victim to a “price momentum” bubble in basic foodstuffs as speculators pile in again.
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Soya bean and rice prices have also taken off, says Eoin Treacy on fullertreacymoney.com. Corn futures have hit a seven-year high. The 2011 Arab Spring was sparked in large part by “the high cost of bread in Tunisia” during the last major agricultural price surge. Societies are already on edge. Now rising food prices could herald a new round of social unrest.
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Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019.
Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere.
He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful.
Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.
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