A World Bank 102669 Quarterly Report OCTOBER 2015 Commodity Markets Outlook Understanding El Niño Q1 Q2 Q3 Q4 A World Bank Quarterly Report OCTOBER 2015 Commodity Markets Outlook © 2015 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The maps were produced by the Map Design Unit of The World Bank. The World Bank does not guarantee the accuracy of the data included in this work. 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C O M M O D I T Y M A R K ETS O U T L OO K Contents 7 Contents Acknowledgments Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Special Focus: Understanding El Niño: What does it mean for commodity markets? . . . . . . . . . . . . . . . . . . 13 Commodity Market Developments and Outlook Energy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Box: Iran Nuclear Agreement: A game changer for energy markets? . . . . . . . . . . . . . . . . . . . . . 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Metals Precious metals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Fertilizers Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Appendix A: Historical commodity prices and price forecasts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Appendix B: Commodity balances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Appendix C: Description of price series and technical notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Figures 1 Commodity price indices, monthly. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 2 Commodity price indices, annual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 F.1 Oceanic Niño Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 F.2 El Niño’s pattern during June-August . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 F.3 El Niño’s pattern during December-February . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 F.4 Domestic price changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 F.5 Domestic rice price changes, 2014Q2 vs 2015Q2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 F.6 Stock-to-use ratios, maize, wheat and rice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 F.7 Price changes between Apr-Sep 2014 and Apr-Sep 2015. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 F.8 Agricultural commodity prices and El Niño episodes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 3 Crude oil prices, daily . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 4 World oil demand growth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 5 U.S. crude oil production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 6 U.S. oil rig count and oil prices, weekly. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 7 OPEC crude oil production. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 8 OECD crude oil stocks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 9 Coal consumption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 10 Coal and natural gas prices, monthly. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 B1 Iran: Monthly oil production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 8 Contents C O M M O D I T Y M A R K ETS O U T L OO K B2 Proved oil reserves of top 15 countries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 B3 Iran: Oil production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 B4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Proved natural gas reserves of top 15 countries 11 Metal prices indices, monthly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 12 World refined metal consumption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 13 World metal consumption growth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 14 Nickel price and LME stocks, daily. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 15 Precious metal prices, monthly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 16 World silver mine production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 17 Fertilizer prices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 18 Global nutrient consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 19 Agriculture price indices, monthly. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 20 Stocks-to-use ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 21 Global grain production and consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 22 Global biofuel production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Coffee prices, daily 24 Cotton stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Table 1 Nominal price indices, actual and forecast (2010 = 100). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Acknowledgements This World Bank Group Report is a product of the Prospects Group in the Development Economics Vice Presidency. The report was managed by John Baffes under the general guidance of Ayhan Kose and Franziska Ohnsorge. Several people contributed substantively to the The World Bank’s Commodity Markets Outlook is report. John Baffes authored the Special Focus published quarterly, in January, April, July, and section on El Niño and agriculture. Shane Streifel October. The report provides detailed market analysis authored the box on Iran and sections on energy, for major commodity groups, including energy, metals, precious metals, and fertilizers. Xinghao metals, agriculture, precious metals, and fertilizers. Gong assisted with price data and Annex tables. Price forecasts to 2025 for 46 commodities are also Elena Ianchovichina provided comments on the presented, together with historical price data. The Iran box. The design and production of the report report also contains production, consumption, and was managed by Maria Hazel Macadangdang. trade balances for major commodities. Commodity Graeme Littler edited the report. Mark Felsenthal price data updates are published separately at the provided extensive editorial comments. Poonam beginning of each month. Gupta reviewed the report. Phillip Jeremy Hay, Vamsee Krishna Kanchi, and Mikael Reventar The report and data can be accessed at: managed the media relations and dissemination. www.worldbank.org/commodities The accompanying website was produced by Mikael Reventar and Katherine Rollins. For inquiries and correspondence, email at: commodities@worldbank.org. COMMODITY MARKETS OUTLOOK | OCTOBER 2015 E X E C U T I V E S U M M A RY 11 Executive Summary with much of the increase in North America. Non-energy commodity prices fell 5 percent in the Ample supplies and weak demand, especially for third quarter of 2015, down more than a third industrial commodities, contributed to the continued from their early-2011 high. Abundant supply and slide in most commodity prices in the third quarter of large inventories were among the reasons. Metals 2015 (Figure 1). Annual price forecasts are revised prices fell 12 percent to barely half their early-2011 down for 2015 and 2016. Only a modest recovery is peak on weakening demand and supply increases expected in 2016 (Figure 2). This issue briefly analyzes from earlier large investments. Agriculture prices the implications of the ongoing El Niño episode and fell 2.4 percent (down for six consecutive quarters) the recent Nuclear Agreement with Iran for on comfortable supply prospects, despite El Niño agricultural and energy markets, respectively. fears. Fertilizer prices fell marginally on abundant Although El Niño could be the strongest on record, its production capacity. Precious metals prices impact is likely to be predominantly local rather than declined 7 percent on weakening investment global because world commodity markets are currently demand reflecting expectations of a U.S. interest well-supplied and spillovers from local markets to rate hike and dollar appreciation. global prices are typically weak. Following Iran’s Outlook and risks. All main commodity price Nuclear Agreement, the country’s 40 million barrels indices are expected to decline in 2015, mainly in floating storage could be made available almost owing to ample supply and, in the case of industrial immediately upon sanctions being lifted; and, within commodities, slowing demand in China and a few months, Iran could increase its crude oil emerging markets (Table 1). Energy prices are production toward pre-sanctions levels. The impact of expected to fall 43 percent from 2014. Average oil Iranian exports on global oil and natural gas markets prices for 2015 of $52/bbl have been revised down could be large over the longer term provided that Iran from $57/bbl (July Commodity Markets Outlook) attracts the necessary foreign investment and owing to large stocks, resilient supply, and technology to extract its substantial reserves. expectations of larger Iranian oil exports. Natural Trends. Energy prices dropped 17 percent in the gas prices are expected to be sharply lower, third quarter of 2015, as oil prices weakened due following the path of oil prices while coal prices are to continuing supply surpluses and anticipation of expected to fall on slowing Chinese demand. higher Iranian oil exports in 2016. Coal and Downside risks to the energy price forecast include natural gas prices declined marginally on continued higher-than-expected production from OPEC weak demand and excess supply. Oil consumption producers and continuing falling costs of the U.S. growth has risen this year, in part due to lower shale oil industry. Slowing demand and high stocks prices. Oil supply continues to outpace demand, would further weigh on oil prices. Upside risks although global production is plateauing and year- include accelerating declines in shale output, on-year growth is diminishing. U.S. oil production delayed implementation of the Iran agreement, peaked in April and is now on a declining trend. and supply curtailment because of geopolitical OPEC production reached a three-year high, with events. much of the increase coming from Iraq and Saudi Non-energy prices are expected to fall 14 percent in Arabia. OECD crude oil inventories have soared, Figure 1  Commodity price indices, monthly Figure 2  Commodity price indices, annual US$ nominal, 2010=100 US$ real, 2010=100 150 140 Energy 120 125 100 Agriculture 100 80 Agriculture Metals 60 75 Metals 40 Energy 50 20 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 1980 1985 1990 1995 2000 2005 2010 2015 2020 Source: World Bank Source: World Bank. Note: Last observation in September 2015. Note: Shaded area denotes price forecast. 12 e X e C U t I V e s U M M A RY CoMMoDItY MARKets oUtLooK | oCtoBeR 2015 TABLE 1 Nominal price indices, actual and forecasts (2010 = 100) Price Indices (2010=100) Change (%) Revision2 2011 2012 2013 2014 2015F1 2016F1 2014-15 2015-16 2015F 2016F Energy 129 128 127 118 67 66 -43.3 -1.7 -5.4 -11.0 Non-Energy3 120 110 102 97 83 84 -14.4 1.2 -2.2 -2.5 Metals 113 96 91 85 68 69 -19.2 1.1 -2.2 -3.7 Agriculture 122 114 106 103 89 91 -13.0 1.3 -2.3 -2.0 Food 123 124 116 107 91 92 -15.2 1.5 -3.2 -2.9 Grains 138 141 128 104 89 91 -14.5 2.0 -5.3 -4.9 Oils and meals 121 126 116 109 86 88 -21.5 2.3 -3.7 -3.5 Other food 111 107 104 108 100 100 -7.5 0.2 -0.5 -0.5 Beverages 116 93 83 102 93 92 -8.7 -0.8 -0.5 -0.2 Raw Materials 122 101 95 92 84 85 -9.0 2.0 -0.9 -1.0 Fertilizers 143 138 114 100 95 95 -5.0 -0.5 -0.0 -0.0 Precious Metals3 136 138 115 101 92 91 -9.2 -1.1 0.2 0.1 Memorandum items Crude oil ($/bbl) 104 105 104 96 52 51 -45.5 -2.1 -5.0 -9.8 Gold ($/toz) 1,569 1,670 1,411 1,266 1,175 1,156 -7.2 -1.6 0.0 0.2 Source: World Bank Note: (1) “F” denotes forecast. (2) “Revision” denotes change to the forecast from the July report in percentage points. (3) The Non-Energy price index excludes precious metals. See Appendix C for definitions of prices and indices. 2015, with declines in all main indices . Metals Indonesia, Malaysia, and Thailand—rather than prices are projected to fall by 19 percent . The Global . largest drop is expected for iron ore, as new low- Focus on El Niño’s impact on commodity markets. cost capacity reaches the market and steel El Niño often adversely affects agricultural production declines in China . Some metal production in the Southern Hemisphere, especially producers are closing high-cost operations and countries in Latin America and East Asia, as well as reducing investment in future capacity . Supplies Australia . Recent weather forecasts suggests that are also expected to tighten from upcoming closure the current El Niño episode could be one of the of large zinc mines due to resource exhaustion and strongest on record . However, its impact on Indonesia’s continuation of ore export ban, which commodity prices is likely to be local rather than mainly affects nickel, bauxite, and copper . global because global markets are currently well- Downside risks to the metal price forecasts include supplied and country-specific factors could have a slower demand in China as the country transitions significant impact on local prices . to a less metal-intensive, consumer-driven economy—impacting both emerging- and Iran’s Nuclear Agreement. An international developed-country producers . Upside risks include agreement on Iran’s nuclear program was reached further closures of high-cost mines, and delays in July 2015 and is expected to be implemented in bringing on new capacity . A recovery in global the first half of 2016 . Within a few months of demand would also boost prices . sanctions being lifted, Iran could increase crude oil production by 0 .5-0 .7 mb/d, potentially reaching Agriculture prices are projected to fall 13 percent in a 2011 pre-sanctions level of 3 .6 mb/d . Iran could 2015 (in April the projected decline was 11 immediately start exporting from its 40 million percent), with decreases in all main indices . The barrels of floating storage of oil . The impact of outlook mainly reflects abundant supplies, despite Iranian exports on global oil and gas markets could El Niño fears, and a high level of grain stocks . The be large over the longer term provided that Iran largest price decline is for edible oils and meals attracts the necessary foreign investment and (down 22 percent), owing to ample supplies and technology to extract its substantial reserves . Iran rising stocks . Grains prices are projected to fall by also has the potential to produce and export a 15 percent . Beverage and agriculture raw material significant volume of natural gas over the long prices are expected to each fall by 9 percent . term, as the country has the world’s largest known Fertilizer prices are expected to contract as well on gas reserves . weak demand and excess capacity expansion due to earlier high prices . Risks to the agriculture price forecasts include intensification of El Niño, which could reduce yields in grains (especially rice) and edible oils (palm oil) . However, this risk is regional—in East Asian countries including SPECIAL FOCUS: Understanding El Niño: What does it mean for commodity markets? COMMODITY MARKETS OUTLOOK | OCTOBER 2015 SPECIAL FOCUS 15 Understanding El Niño: What does it mean for commodity markets? El Niño often adversely affects agricultural production in Australia, while there is modest impact in the North- the Southern Hemisphere, especially countries in Latin ern Hemisphere. America and East Asia, as well Australia. Recent weather El Niño episodes occur every 2-7 years and last 9-12 forecasts suggests that the current El Niño episode could be months. Typically, they develop during April-June and one of the strongest on record. However, its impact on reach maximum strength during December-February commodity prices is likely to be predominantly local rather and they are often followed by La Niña, a weather pat- than global because global markets are currently well- tern following lower than normal temperatures in the supplied; country-specific factors could have a significant Pacific. The strongest El Niño on record occurred in impact on local prices. 1997-98. The El Niño episode currently under way could be According to most forecasting models, the current El one of the strongest on record and is expected to Niño may be the strongest since detailed data have reach maximum strength during December-Febru- been available (Earth Institute 2015). It is expected to ary, potentially lasting throughout early summer of reach—and remain—in the “strong” or “very strong” 2016 (Figure F.1). Given its likely impact on agri- category (see Figure F.1 for definition) throughout the cultural production, the current episode has raised end of the Southern Hemisphere’s growing season, concerns that it may put upward pressure on global and into early spring (and possibly summer) in the agricultural commodity prices. This section analyzes Northern Hemisphere according to forecasts pub- the implications of El Niño for commodity markets lished on September 17, 2015. It is likely to be fol- by addressing the following questions: (1) What is lowed by La Niña, but it is too early to assess the El Niño? (2) How does it impact commodity mar- strength of the latter (NOAA 2015). kets? (3) Could the current episode trigger a spike in world agricultural commodity prices? How does it impact commodity markets? What is El Niño? The impact of El Niño is highly heterogeneous across El Niño is a weather pattern which causes the winds of regions and commodities, depending on the timing, the equatorial Pacific to slow or reverse direction, in duration, intensity, and weather patterns prior to its turn raising the temperature of waters over a vast area occurrence. Particularly, it impacts agricultural com- of the Central and Eastern Pacific Ocean. Higher tem- modities by affecting yields—lowering them for most peratures cause below- or above-normal precipitation but raising them for others—and industrial commodi- in many regions, especially in the Southern Hemi- ties by affecting operations and infrastructure. sphere (Figures F.2 and F.3). The impact is most no- ticeable in South America, East Asia, South Asia, and Figure F1.1  Oceanic Niño Index ENSO index forecast as of September 2015 2 1 0 -1 -2 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Source: National Oceanic Atmospheric Administration (NOAA; historical data through August 2015) and Earth Institute (forecasts from September 2015 to June 2016, as of September 17, 2015). Note: The ENSO (El Niño Southern Oscillation) Index represents a centered three-month mean SST (Sea Surface Temperature) anomaly for the Niño 3.4 region (i.e.,5oN-5oS, 120o-170oW). According to the NOAA, events are defined as five consecutive overlapping three-month periods at or above the +0.5o anomaly for El Niño events and at or below the -0.5 anomaly for La Niña events. The threshold is further broken down into Weak (with a 0.5 to 0.9 SST anomaly), Moderate (1.0 to 1.4), Strong (1.5 to 1.9) and Very Strong (≥ 2.0) events. An event to be categorized in any of the above categories it must have equaled or exceeded the threshold for at least three consecutive 3-month periods. Note that the value of the index can change up two months after the “real” time data become available because of a filtering process applied to the data. 16 sPeCIAL FoCUs CoMMoDItY MARKets oUtLooK | oCtoBeR 2015 Impact on agricultural commodities • Southern Africa . Drier than normal conditions It is useful to briefly analyze recent weather forecasts are also developing in Southern Africa, but the re- for areas affected by El Niño and review main agricul- gion is not a key player in any global commodity tural commodities produced in those areas . market . • Central and South America . Dry conditions are • North America . Warmer than average tempera- expected to persist across Central America and tures across Canada and the northern U .S . may parts of South America while wetter than normal hamper grain yields, but wetter-than-average con- conditions are projected in Brazil and north-east ditions across the rest of the U .S . could boost soy- Argentina—a key production region for coffee, bean yields . soybeans, and some grains . Thus far, both global and domestic prices of key grains • Australia . As of September, rainfall in most part have not experienced a major spike, even in countries of Australia had been below average . Australia is at risk from El Niño, regardless of the period exam- the world’s fifth larger wheat exporter . ined . For example, in a sample of 22 countries, the median price of maize increased only 2 .1 percent from • East Asia . Drier than normal conditions that de- the first to the second quarter of 2015; the median veloped in the summer are expected to continue, prices of wheat and rice changed very little over that especially in Indonesia, the Philippines, Thailand, period . In global markets, the world price of maize, and Vietnam . In Indonesia, recent projections wheat, and rice declined by 3, 9 .5, and 7 .5 percent show a decline of 1 to 2 million tons of rice, over the same period, respectively (Figure F .4, left equivalent to 1 .5 to 3 percent of the country’s rice panel) . A comparison of the second quarter of 2015 to output (World Bank 2015) . In addition to rice, the corresponding quarter of 2014, confirms small the region is a key supplier of palm oil and natural changes in domestic prices for the same sample of rubber . countries as well . (Yet, there was large dispersion of • Central Asia . El Niño is likely to intensify snow domestic prices across countries, even for countries in accumulation in the mountainous areas of Cen- the same regions, see Figure F .5) . tral Asia, thus improving irrigation conditions for Impact on industrial commodities the summer of 2016 in a number of countries, including Afghanistan, Iran, Tajikistan, and Uz- • Energy . Drought conditions could reduce hydro- bekistan (the world’s fourth largest cotton electric power generation, while weaker winds exporter) . could lower wind turbine electricity generation . Electricity shortfalls could have adverse spillovers • South Asia . So far, growing conditions in South to production of other commodities . For exam- Asia have not been affected by El Niño in a major ple, in Zambia, copper mines may need to reduce way . This is significant for India because agricul- production if an El Niño-induced drought re- ture, which is mainly rain-fed and thus subjected duces electricity supply from hydro power sources . to weather fluctuations, accounts for 17 percent Conversely, above-normal rainfall would benefit of its GDP . hydroelectric generation and reduce power gen- eration from other sources . FigurE F1.2 El Niño's pattern during FigurE F1.3 El Niño's pattern during December- June-August February Warm Warm Wet Warm Wet Wet & Cool Dry Dry & Warm Dry Warm Wet Wet Wet & Warm Dry Warm Warm Warm Dry & Warm Dry & Cool Wet Wet Warm Source: National Oceanic Atmospheric Administration. Source: National Oceanic Atmospheric Administration. Note: This map depicts El Niño’s impact at its early stages. Note: This map depicts El Niño’s impact during its peak. COMMODITY MARKETS OUTLOOK | OCTOBER 2015 SPECIAL FOCUS 17 • Metals. Excessive rain fall can disrupt mining ac- ment of Agriculture, which releases a monthly global tivities and related transport infrastructure, thus update for most grain and oilseed commodities, negatively affecting metal production. For exam- maintained its comfortable outlook for the 2015–16 ple, in March, heavy rains and mudslides in crop year in its October update. northern Chile and southern Peru curtailed activ- Weak connection between global and domestic ity temporarily at some copper mines. Additional prices. The links between global and domestic prices rainfall could also affect zinc and other metal pro- are weak, especially for small developing countries. duction in Peru. In East Asia, in contrast, drier Thus, it could take a long time for any El Niño–re- conditions during the wet season could enhance lated shortages to affect world markets, unless they bauxite production (Malaysia) and nickel output are severe and affect a major producer. The well-sup- (Philippines). Mining and loading of bauxite in plied nature of global grain markets is reflected in Malaysia stops on rainy days and exports grind to prices, which have declined considerably between a halt in January during the heaviest part of the April-September 2015 (when El Niño fears were in- monsoon. Conversely, drought could disrupt river tensified) and the same period last year (from -8 per- transport or water-dependent operations. For ex- cent in rice to -32 percent in wheat, Figure F.7). ample, prolonged drought in Papua New Guinea has recently led to the closure of a large copper A weak correlation between domestic and global agri- mine due to low river flow that restricted access cultural prices has been well-documented in the lit- erature (Baffes and Gardner 2003; Ceballos et al. and the replenishment of fuel and food stocks. 2015; Minot 2011; Heady 2011; and Baffes, Kshirsagar, and Mitchell 2015). Indeed, domestic Could the current episode trigger prices are driven by a host of country-specific factors, a spike in world agricultural including weather patterns, currency movements, commodity prices? transportation costs (between domestic trading cen- ters and ports), quality differences, and trade The current El Niño episode is unlikely to cause a policies. spike in global agricultural prices given ample supply Limited impact of previous El Niño episodes. The of major agricultural commodities, weak links be- influence of El Niño on rainfall and temperature has tween global and domestic prices, and limited impact been systematically documented by Ropelewski and of past episodes. However, it could be a source of sig- Halpert (1987) and Nicholson et al (2001). The esti- nificant local disruptions in the most affected mated global impacts of previous El Niño episodes regions. range widely but, in general, agricultural yields tended Ample supplies. Most commodity markets, including to decrease, albeit marginally (Iizumi et al. 2014). For those of grains and oilseeds, are well-supplied. Stock- example, during an El Niño episode, maize, rice, and to-use ratios (a measure of the abundance of supplies wheat yields could decrease by up to 4 percent and relative to demand) for maize, wheat, and rice are global soybean yields could increase by 2.1-5.4 per- well above their 10-year average, and much higher cent. Algieri (2014) and Ubilava (2014) also estab- than in 2006–07 when a spike in most food com- lished that both El Niño and La Niña shocks reduce modity prices began (Figure F.6). The U.S. Depart- yields and increase world wheat prices. Naylor et al Figure F1.4  Domestic price changes Figure F1.5  Domestic rice price changes, Percent 2015Q2 vs 2014Q2 2015Q2 vs. 2015Q1 2015Q2 vs. 2014Q2 80 Bolivia Bangladesh 60 Wholesale median prices (local currencies) Paraguay World price (US$) Viet Nam 40 Honduras Median price India change (-2%) 20 Dominican Republic Uganda 0 Thailand Myanmar -20 Uruguay -40 -30 -20 -10 0 10 20 Maize Wheat Rice Maize Wheat Rice Percent Source: FAO GIEWS Food Price Database. Source: FAO GIEWS Food Price Database. Note: See Box F1.1 for more details. Note: The world rice price declined 2 percent over this period. 18 SPECIAL FOCUS COMMODITY MARKETS OUTLOOK | OCTOBER 2015 (2001) show that ENSO (El Niño Southern Oscilla- Cashin, Mohaddes and Raissi (2015) found that while tion) anomalies account for 40 percent of inter-annual activity in Australia, Chile, Indonesia, India, Japan, variation of rice production in Indonesia. For agricul- New Zealand and South Africa may slow marginally tural commodities more broadly, a one-standard devi- in response to El Niño shocks, for some countries (in- ation weather shock during El Niño could raise real cluding the United States and European region), an El prices by 3.5-4 percent (Brunner 2002). Niño can lift growth. Consistent with the weak impact on yields, existing Larger impact on local markets. El Niño is likely to evidence also suggests a weak impact on agricultural have a greater impact in local food markets that are commodity prices (Figure F8). Of six such episodes weakly linked to international markets—a fairly com- since 1980 (excluding the ongoing one), in only one mon characteristic of local food markets in poor coun- case (2002-03) the six-month average agricultural tries. Weather disturbances tend to have a robust price index leading to the episode increased modestly short-run impact on local prices in a significant num- either compared to the previous 6-month period or ber of maize markets in developing countries (Brown compared to a year ago. In all other cases, prices either and Kshirsagar 2015). In contrast, a smaller share of declined (1982-83) or changed very little. Even during maize markets are influenced by global prices in the the 1997-98 episode, the strongest in recorded history short-run. with estimated worldwide damages estimated at US$ 35-45 billion, prices declined. Mixed El Niño impacts have also been reported in the context of high income country growth. For example, Figure F1.6  Stock-to-use ratios, maize, Figure F1.7  Price changes between Apr-Sep wheat, and rice 2014 and Apr-Sep 2015 Percent Percent 30 2006-07 -40 -30 -20 -10 0 10-yr average 2015-16 Rice 25 Maize 20 Cotton 15 Copper Natural rubber 10 Soybeans 5 Palm oil Sugar 0 Maize Wheat Rice Wheat Source: U.S. Department of Agriculture. Source: World Bank. Note: The 2015-16 value reflects the October 2015 update. Note: The average April-September was chosen on the basis of the intensification of El Niño discussions Figure F1.8  Agricultural commodity prices and El Niño episodes Index, deflated by U.S. CPI, Jan. 2010=100 Agriculture price index 200 ENSO Index peaks 170 140 1.4% -7.1% -2.9% -0.9% -6.5% -14.8% 110 -2.2% -7.3% -12.6% 10.4% -19.6% 9.8% 80 3.8% -3.5% 50 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Source: World Bank and NOAA. Note: The ENSO peaks reflect values greater than 1 (see Figure F1.1). The numbers denote percent changes of the six-month average price index leading to the episode compared to the previous six-month period (bold) and the corresponding six-month period of the previous year (italic). The last observation for both agricultural price index and El Niño is September 2015. COMMODITY MARKETS OUTLOOK | OCTOBER 2015 SPECIAL FOCUS 19 References Climate Data to Predict Rice Production in Indo- nesia.” Climatic Change 50: 255-65. Algieri, B. 2014. “A Roller Coaster Ride: An Empiri- Nicholson, S. E., and J. Kim. 1997. "The Relation- cal Investigation of the Main Drivers of the Inter- ship of the El Nino-Southern Oscillation to Afri- national Wheat Price.” Agricultural Economics 45: can Rainfall." International Journal of Climatology 459-75. 17.2: 117-135. Baffes, J. and B. Gardner. 2003. “The Transmission NOOA (National Oceanic Atmospheric Administra- of World Commodity Prices to Domestic Markets tion). http://www.cpc.noaa.gov/products/analy- under Policy Reforms in Developing Countries.” sis_monitoring/ensostuff/ensoyears.shtml. Ac- Policy Reform 6: 159–180. cessed on October 7, 2015. Baffes, J., V. Kshirsagar, and D. Mitchell. 2015. Ropelewski, C. F., and M. S. Halpert. 1987. "Global “What Drives Local Food Prices? Evidence from and Regional Scale Precipitation Patterns Associ- the Tanzanian Maize Market.” Policy Research ated with the El Niño/Southern Oscillation." Working Paper 7338. World Bank, Washington Monthly Weather Review 115.8: 1606-1626. D.C. Ubilava, D. 2014. “The ENSO Effect on World Brown, M. E., and V. Kshirsagar. 2015. "Weather Wheat Market Dynamics: Smooth Transitions in and International Price shocks on Food Prices in Asymmetric Price Transmission.” Selected Paper the Developing World." Global Environmental presented at the Agricultural & Applied Econom- Change 35: 31-40. ics Association’s Annual Meeting, Minneapolis, Brunner, A. D. 2002. “El Niño and World Primary MN, July, 27-29. Commodity Prices: Warm Water or Hot Air?” Re- World Bank (2015). East Asia and Pacific Economic view of Economics and Statistics 84: 176-183. Update: Staying the Course. World Bank, Washing- Cashin, P., K. Mohaddes, and M. Raissi. 2015. “Fair ton D.C. Weather or Foul? The Macroeconomic Effects of El Niño’.” IMF Working Paper 15/89. International Monetary Fund, Washington D.C. Ceballos, F., M. A. Hernandez, N. Minot, and M. Robles. 2015. “Grain Price and Volatility Trans- mission from International to Domestic Markets in Developing Countries.” Selected Presented at the 2015 Agricultural & Applied Economics Associa- tion and Western Agricultural Economics Association Meeting, San Francisco, CA, July 26-28. Earth Institute. 2015. http://iri.columbia.edu/our- expertise/climate/forecasts/enso/current/. Interna- tional Research Institute for Climate and Society, Columbia University. Accessed on October 7. Headey, D. D. 2013. “The Impact of the Global Food Crisis on Self-assessed Food Security.” The World Bank Economic Review 27: 1–27. Iizumi, T., M. Yokozawa, G. Sakurai, M. I. Travasso, V. Romanenkov, P. Oettli, T. Newby, Y. Ishigooka, and J. Furuya. 2014. “Historical Changes in Global Yields: Major Cereal and Legume Crops from 1982 to 2006.” Global Ecology and Biogeography 23: 346-57. Minot, N. 2011. “Transmission of World Food Price Changes to markets in Sub-Saharan Africa.” IFPRI Discussion paper 01059. International Food Policy research Institute, Washington D.C. Naylor, R. L., W. P. Falcon, D. Rochberg, and N. Wada. 2001. “Using El Niño/Southern Oscillation COMMODITY MARKET DEVELOPMENTS AND OUTLOOK Energy Metals Precious metals Fertilizers Agriculture 22 commodity markets outlook OCTO B ER 2 0 1 5 Energy affected by declining production from shale (light oil) and falling imports of Canadian light synthetic oil (due to problems with Canadian bitumen upgrading plants). Outside the U.S., however, surplus light oil in Energy prices, as measured by the World Bank En- the Atlantic basin is exerting downward pressure on ergy Index, fell 17 percent in the third quarter Brent crude prices. Futures prices show the discount from the previous period. Oil led the decline drop- for WTI versus Brent widening to near $5/bbl over the ping 19 percent on expected weaker demand, con- next several years. tinuing supply surpluses, and anticipation of rising Iranian oil exports in 2016 (see Box). Coal and World oil demand increased and estimated 1.9 mb/d natural gas prices both fell 3 percent owing to weak (2.0 percent) in the first nine months of this year (Fig- demand and excess supply. ure 4). Growth was concentrated in the U.S. and China—up a combined 1.1 mb/d—with strong gains in India as well, up 0.2 mb/d. U.S. oil demand rose Crude oil 0.5 mb/d (2.6 percent), mainly for gasoline, partly as lower prices encouraged people to drive more. China’s Crude oil prices averaged $48.8/bbl in the third quar- demand jumped 0.6 mb/d (up 5.9 percent). The larg- ter, down 19 percent from the second quarter (see Fig- est increase was also for gasoline, despite falling car ure in Annex 2, Crude Oil). Prices fell below $50/bbl sales. Diesel demand has been flat (in both countries), at the beginning of August and traded in a narrow av- with slowing industrial activity in China accounting eraging $47/bbl into early October (Figure 3). Prices for its subdued consumption. The Volkswagen scandal have been driven lower by expectations of slowing has raised uncertainty about long term diesel use in global growth (particularly in China and emerging consumer vehicles. markets), and various supply considerations, including high stocks, resilient non-OPEC output, and greater World oil demand growth is expected to slow slightly Iranian production next year. Oil demand remains in the fourth quarter, putting annual global growth at quite strong, particularly in China and the United 1.8 mb/d (1.9 percent)—more than double the growth States, led by robust consumer appetite for gasoline. in 2014. Non-OECD demand is expected to climb by U.S. crude oil production has begun to decline due to more than 1.2 mb/d (2.5 percent), a pace similar to lower investment and drilling. This is expected to help recent years. OECD demand is projected to rise 0.6 rebalance the market and reduce the large inventory mb/d, with gains coming from North America and overhang next year. OPEC output remains elevated Europe. In 2016, global oil demand is projected to and higher exports from Iran are expected once sanc- slow to 1.2 mb/d (1.3 percent), with increases mainly tions are lifted. in the non-OECD and OECD Americas. The stimu- lus of lower prices on consumer demand, particularly The differential between West Texas Intermediate for gasoline, is expected subside. (WTI) and Brent spot oil prices narrowed substan- tially in late September due to falling crude oil Although global oil supply continues to outpace de- stocks—particularly at Cushing, Oklahoma, a delivery mand, it plateaued near 97 mb/d in recent months point for WTI futures contracts. With relatively strong and y-o-y growth is steadily slowing. Total output demand for light oil in the U.S., WTI prices have been grew by 1.8 mb/d y-o-y in the third quarter, but is Figure 3  Crude oil prices, daily Figure 4  World oil demand growth US$/bbl mb/d, growth year over year 70 4.0 China OECD 65 Other Non-OECD 2.0 60 Brent 55 0.0 50 45 WTI -2.0 40 35 -4.0 Jan-15 Apr-15 Jul-15 Oct-15 2007Q1 2009Q1 2011Q1 2013Q1 2015Q1 Source: World Bank. Source: World Bank, International Energy Agency. Note: Last observation is October 2015. Note: Last observation is 2015Q4. CO M M O D I T Y M A R K ET S O U T L OO K october 2015 23 down from more than 3 mb/d gains in the first half of Importantly, well productivity has improved substan- this year. OPEC production rose by 1.3 mb/d in the tially. In the Eagle Ford (Texas) and Bakken (North third quarter, and non-OPEC supply also grew by 1.3 Dakota) regions, new well productivity has risen from mb/d. The U.S. accounted for than less than half of less the 300 barrels per well in early 2012, to 694 and the non-OPEC supply growth at 0.6 mb/d, down sub- 795 barrels, respectively, and improved by about 9 stantially from a gain of 1.6 mb/d in the first quarter. percent in the third quarter alone. The other non-OPEC increases were mainly from Drilling and completion costs have fallen significantly, Asia, recovering output in the North Sea (from last and efficiencies have improved through reduced drill- year’s U.K. maintenance and strike in Norway), Rus- ing time, better planning and innovation. Technology sia, Brazil, Canada, and biofuels. also continues to improve, including new generation In the United States, crude oil production peaked in rigs, pad drilling (drilling multi wells on a single land April at 9.6 mb/d and slipped to under 9.4 mb/d in track) and “re-fracking” of wells. On the other hand, July (Figure 5). The decrease primarily occurred in shale oil wells decline rapidly, falling by some 70 per- shale producing basins in Texas which peaked in cent or more in the first year and more than 80 percent March, and in North Dakota which peaked in Decem- in the first two years. This requires substantial drilling ber. Increases in the offshore Gulf of Mexico partly to offset the shale’s rapid declines. offset these losses. Upstream investment in the U.S. is OPEC crude oil production reached a high of 31.8 estimated to have fallen by about a third and rigs drill- mb/d in June/July—up 1.7 mb/d from February. ing for oil have fallen more than 60 percent from a Most of the gains came from Iraq and Saudi Arabia, high in October 2014 (Figure 6). each boosting output by 0.9 mb/d. These were largely Rig activity rose from its lows in June as producers offset by lower production in the Neutral Zone due to continued to develop shale deposits, but has fallen an operational dispute between Saudi Arabia and Ku- back more recently with lower oil prices. The U.S. En- wait, which share output equally. Production in Saudi ergy Information Administration projects that domes- Arabia eased in August and September, but total tic crude oil production will decline to 9.0 mb/d in the OPEC output was still 1.7 mb/d above its 30 mb/d fourth quarter to 8.7 mb/d in the third quarter of next target. Outside the Gulf, OPEC production has held year, and then rebound to 9.0 mb/d in 2016Q4. For fairly steady at around 8.0 mb/d, down from 9.6 mb/d 2016, total production is projected to decline by 0.4 in 2012Q3. The dropoff is mainly due to a large loss of mb/d, with output in the lower-48 states falling 0.5 Libyan production from civil conflict, and (to a lesser mb/d, partly offset by a gain of 0.1 mb/d in the off- extent) pipeline sabotage and theft in Nigeria. OPEC shore Gulf of Mexico. meets December 4th to discuss its production target Sharply reduced spending and drilling portends to and higher exports from Iran. At present, key Gulf lower crude oil production going forward, but there countries, led by Saudi Arabia, appear intent on main- are other factors that are helping to stem sharp reduc- taining their strategy to pursue market share despite tions in output. Producers are utilizing their most ef- low prices and reduced export revenues. ficient rigs on most productive tracts (high-grading) to Iraq’s production rose to a record 4.3 mb/d in Septem- maximize returns. There is a significant backlog of ber, with heavy-crude output from the southern fields drilled but uncompleted wells that can be completed accounting for much of recent gains because of a new at roughly two thirds of the cost a newly drilled well. Figure 5 U.S. crude oil production Figure 6 U.S. oil rig count and oil prices, weekly mb/d US$/bbl Rig count 10 150 1800 Texas Oil price, WTI (LHS) North Dakota 8 Other 1500 125 1200 6 100 900 4 75 600 2 50 US oil rig count (RHS) 300 0 25 0 Jan-09 Jan-11 Jan-13 Jan-15 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Source: U.S. Energy Information Administration, International Energy Agency. Source: Baker Hughes, Bloomberg. Note: Last observation is July 2015. Note: Last observation is October 9, 2015. 24 commodity markets outlook OCTO B ER 2 0 1 5 system for exports. The system separates light and There are a number of risks to the price forecast. On heavy grades—heavy oil no longer needs to be shut-in the downside, higher Iranian exports could extend the to enhance the quality of Basrah Light crude exports. current surplus, particularly if the rest of OPEC con- Total exports reached a record 3.7 mb/d in September, tinues to maintain market share. Non-OPEC produc- as exports from the north recovered from pipeline at- tion may hold up better than expected due to cost re- tacks at 0.6 mb/d. Most of the northern exports are duction and efficiency improvements. Looked at under the Kurdistan Regional Government. Low oil another way, lower prices may be needed curtail sur- prices and the country’s severe financial constraints— plus output. Finally, demand could also disappoint in part due to a costly battle with the Islamic State of given the slowdown in China and other emerging Iraq and Levant—has forced the oil ministry to curb markets. Upside risks include stronger consumer de- investment in new capacity and infrastructure proj- mand (especially for gasoline), delay in implementing ects. Only modest growth in oil production is expected the Iran agreement, more rapid decline in non-OPEC next year. output, and disruptions to key producers (e.g., Iraq The large supply overhang has caused OECD crude oil and Nigeria). inventories to soar (Figure 8). Much of the increase is in North America, but stocks in other regions are rela- tively high as well. Stocks of refined products in North America are above their five-year average but relatively low elsewhere. In the fourth quarter, oil demand by refineries is expected to pick up after they exit autumn maintenance, which is expected to draw on inventories during fall/winter months. Outside the OECD, China has been importing crude above its consumption needs by more than 0.1 mb/d, some of which has likely been placed in its growing strategic reserve. In- creasing storage capacity is expected to result in strate- gic stocks growing by 0.2 mb/d in the fourth quarter and into next year. Crude oil prices are projected to average $52/bbl in 2015, a drop of 46 percent from last year. U.S. crude oil production is expected to continue declining mod- erately into next year and will help to reduce the sur- plus. There is uncertainty as to how quickly the market will rebalance, and will depend on the pace of both demand and supply. Oil prices are expected to fall slightly in 2016, averaging $51/bbl, assuming a steady return to balance throughout the year. Figure 7  OPEC crude oil production Figure 8  OECD crude oil stocks mb/d Million barrels 14 1,200 Other 13 1,150 12 1,100 Crude oil stocks 11 1,050 Saudi 10 1,000 9 950 5-year average 8 900 Non Gulf 7 850 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Source: International Energy Agency. Source: International Energy Agency. Note: Last observation is September 2015. Note: Last observation is August 2015. CO M M O D I T Y M A R K ET S O U T L OO K october 2015 25 Coal Natural gas Thermal coal prices fell 3 percent in the third Natural gas prices fell 3 percent in the third quarter, quarter on continued weak demand, high stocks, as all three main markets (U.S., Europe and Japan) and surplus supply. Prices have fallen to a four-year remain in surplus amid weak demand, large stocks low because of chronic oversupply and falling and ample supply (Figure 10). European gas prices imports into China—the world’s largest consumer fell 6 percent to under $7/mmbtu, partly due to of coal (Figure 9). Global supplies continue to lower oil prices and the uncompetitiveness of gas increase from new low-cost capacity, declining in power generation. Gas delivered to Japan fell 2 costs, and depreciating producer currencies. percent to $9/mmbtu, as imported prices continue China’s coal imports are down by more than a to reflect contracts indexed to oil prices (with a third this year due to slowing industrial activity, lag). However, spot cargoes of liquefied natural gas greater use of hydro and other sources of energy, (LNG) are flowing into Asia and Europe at around and import restrictions on low quality coal. India’s $6/mmbtu due to excess supply. New LNG import demand has remained strong but is now capacity is set to come on line, mainly from slowing as domestic production improves. Australia, and the U.S. is expected to export its first Indonesia, the world’s largest coal exporter, has shipment by the end of this year. borne the brunt of the contraction in the seaborne U.S. gas prices edged higher to $2.75/mmbtu, but market. Coal production is also being cut in slipped to $2.30/mmbtu at the beginning of Australia and elsewhere, but could come back on October due to near record stocks and mild line if warranted. weather heading into winter. Demand for gas is Coal prices are expected to decline 17 percent in expected to remain robust for power generation, 2015 to $50/ton on continued surplus supply. where it is an attractive substitute for coal. Gas Coal faces difficult market conditions going production continues to grow but at a diminishing forward due to slowing import demand in China. rate, and shale gas production levelled the past few Reasons for concern include moderate growth for months at 42 bcf/d, or about 53 percent of total electricity generation in key importing regions, U.S. gas production. Shale gas production increased competition from natural gas due to continues to climb in the northeast Marcellus and lower prices, larger penetration of renewables due Utica regions, and new pipelines are moving more to environmental policies, and introduction of pf the region’s gas to markets. carbon trading schemes which would penalize coal Natural gas prices are expected to record large further. Meanwhile, coal supplies are expected to declines this year in all three main markets: U.S. be ample, in part because of the ramp-up in new (down 36 percent to $2.8/mmbtu); Europe (down capacity from earlier investment (though now 26 percent to $7.4/mmbtu), and Japan (down 36 slowing). Production cost reductions and weak percent to $10.3/mmbtu). Prices are expected to producer currencies may keep high-cost capacity remain weak in all regions due to surplus supply, in play. relatively weak demand, and continuing low oil prices. Figure 9  Coal consumption Figure 10  Coal and natural gas prices, monthly Million tons of oil equivalent US$/mmbtu Natural Gas 2,000 20 (Japan) China 1,500 15 OECD Natural Gas (U.S.) 1,000 10 Natural Gas (Europe) Other 500 5 FSU Coal (Australia) 0 0 1970 1980 1990 2000 2010 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 Source: BP Statisticsl Review of World Energy. Source: World Bank. Note: Last observation is 2014. Note: Last observation is September 2015. 26 commodity markets outlook OCTO B ER 2 0 1 5 BOX Iran Nuclear Agreement: A game change for energy markets? An international agreement on Iran’s nuclear program sanctions—see Congressional Research Service was reached in July 2015 and is expected to be 2015). Provisions are in place to “snap-back” implemented in the first half of 2016. Sanctions will be sanctions if Iran is deemed to violate its suspended at that time and terminated in 2023. commitments. Sanctions end eight years after the Within a few months of sanctions being lifted, Iran “Adoption Day,” and the UN resolution (which could increase crude oil production by 0.5-0.7 mb/d, adopted the agreement) terminates after 10 years, potentially reaching a 2011 pre-sanctions level of 3.6 assuming no provisions are reinstated over the mb/d. Iran could immediately start exporting from its course of the agreement. Some nuclear restrictions 40 million barrels of floating storage of oil, of which and IAEA access and verification extend for 15 more than half is condensate. The impact of Iranian years. exports on global oil and natural gas markets could be large over the longer term provided that Iran attracts the necessary foreign investment and technology to How does it affect the global oil extract its substantial reserves. market? Upon the lifting of sanctions, Iran could almost What does the agreement entail? immediately start exporting using its 40 million barrels of floating storage of oil. Less than half of On July 14, 2015, the five permanent UN Security this inventory is crude oil and the majority is Council Members plus Germany reached a condensate—a liquid produced mainly from its comprehensive nuclear agreement with Iran, known offshore natural gas fields. Condensate can also be as the Joint Comprehensive Plan of Action (JCPOA produced from crude oil, which is under sanctions, 2015). The plan places limitations on Iran’s nuclear that have inhibited sales. Condensate prices and program and lifts nuclear-related sanctions by the refining margins remain weak as markets are well United Nations (UN) Security Council, the EU and supplied, especially in Asia. the U.S., which intensified in 2012. On July 20, Within a few months of sanctions being lifted, 2015, the UN Security Council endorsed the Iran could raise crude oil production by 0.5-0.7 JCPOA, and the agreement is expected to formally mb/d, potentially reaching a 2011 pre-sanctions take effect on October 18 (“Adoption Day”) pending output level of 3.6 mb/d (Figure B1), or about 4 Iran’s response to queries from the International percent of global oil consumption. It could take Atomic Energy Agency (IAEA) about its past nuclear longer to register a sizeable increase in production, work. Upon IAEA verification that Iran has however, given that some oil fields could require implemented required measures, the agreement is to rehabilitation. formally enter into force on “Implementation Day,” expected in the first half of 2016. At that time An increase in Iran’s exports comes amidst ample nuclear-related sanctions would be suspended and global supplies and as OPEC peers and Russia vie Iran could begin to increase its crude oil exports for market share, especially in Asia. Iran will (presently capped at about 1.1 mb/d under quickly seek to regain its earlier market share, Figure B1 Iran: Monthly oil production Figure B2  Proved oil reserves of top 15 countries mb/d Venezuela Escalation of 5 sanctions Saudi Arabia Total Canada Iran, Islamic Rep. 9.3% of world 4 Iraq total Russian Federation Crude oil 3 Kuwait United Arab Emirates United States 2 Libya Nigeria Kazakhstan 1 Qatar Natural gas liquids China Brazil 0 0 50 100 150 200 250 300 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 billion barrels Source: International Energy Agency (2015). Source: BP Statistical Review of World Energy (2015). Note: Last observation is September 2015. Note: Total Global Reserves end 2014 were 1700 billion barrels. CO M M O D I T Y M A R K ET S O U T L OO K october 2015 27 particularly in Europe where Iran lost 0.7 mb/d of return to pre-sanction highs of close to 2.5 mb/d by sales with the imposition of sanctions. International 2017. However, exports will unlikely return to record petroleum companies, particularly those in Europe, highs of the 1970s—at least for the foreseeable future. may choose to preferentially source oil from Iran as Ianchovichina, Devarajan, and Lakatos (2015) a strategic measure to help them enter Iran’s estimate that a rise of 1 mb/d back to a pre-sanction upstream sector. Rising exports from Iran will add level in July 2011 would reduce international oil to expected surpluses next year, resulting in greater prices in 2016 by 13 percent. Apart from the impact pressure on prices, unless accommodated by lower on global energy markets, removal of sanctions and production from OPEC or cost-induced declines larger oil revenues would provide a major boost to the elsewhere. Anticipation of Iran’s exports has already Iranian economy, its international trade, and foreign contributed to lower prices in recent months. direct investment—especially in the oil and gas In the longer term, Iran has substantial reserves (9.3 sectors. percent of world total) to raise production significantly (Figure B2). However, its crude production may only exceed 4.0 mb/d—last seen in How does it affect global natural gas 2008—toward the end of the decade, as raising markets? capacity will be costly and require foreign investment and technology. To attract investment amidst sharp Iran produced 173 billion cubic meters of natural gas cutbacks in expenditures by international companies in 2014, equivalent to 5 percent of world production, and larger demand for foreign capital and technology, of which most was consumed domestically. Over the Iran may have to offer additional incentives. The longer-term, Iran has the potential to produce and government is planning to soon present a new oil export significant volumes of natural gas. The country contract model to international investors. U.S. oil has the world’s largest known reserves—18 percent of companies will still be prohibited from conducting world total, ahead of the Russian Federation at 17 business with Iran, as other U.S. sanctions remain in percent and Qatar at 13 percent, (Figure B4). The place. However, non-U.S. oil companies will be able country could over time develop gas export capacity to take advantage of this opportunity. via pipelines to neighboring countries and to Europe via Turkey, and eventually transport liquefied natural In the early 1970s, Iran produced 6.0 mb/d (10 gas to Europe and Asia. Iran may utilize its gas reserves percent of world production) and exported 5.7 to promote domestic gas-based industries and inject mb/d at its peak, but both production and exports gas into oil fields to help expand production and declined due to revolution and war from the late exports (gas injection is a normal industry process 1970s through much of the 1980s, and due to that increases reservoir pressure to help speed up oil sanctions more recently (Figure B3). The increase in extraction). Moving up the value chain, Iran might domestic oil consumption, which has been also use gas to export higher-value-added electricity supported by large consumer subsidies, has also and petrochemicals (see Khajehpour 2015). impinged on exports. Planned subsidy reforms are underway and are expected to moderate domestic The impact of Iran’s exports on regional gas prices consumption growth while helping exports to rise. will depend on prevailing global gas demand and the Exports of crude oil and natural gas liquids could ability of markets to absorb the gas. The increasing Figure B3 Iran: Oil production Figure B4  Proved natural gas reserves of top 15 countries mb/d US$/bbl Iran, Islamic Rep. Consumption 7 140 Russian Federation Iranian Revolution Net exports Sanctions Qatar Real oil price (RHS) Escalation 6 120 Turkmenistan 18.2% of world United States total 5 Iran-Iraq War 100 Saudi Arabia 1980-1988 United Arab Emirates 4 80 Venezuela Nigeria 3 60 Algeria Australia 2 40 Iraq China 1 20 Indonesia Canada 0 0 0 10 20 30 40 1965 1975 1985 1995 2005 2015 trillion cubic metres Source: International Energy Agency (2015). Source: BP Statistical Review of World Energy (2015). Note: Last observation is September 2015. Note: Total Global Reserves end 2014 were 1700 billion barrels. 28 commodity markets outlook OCTO B ER 2 0 1 5 number of actual and potential gas exporters on Economic Brief. the horizon creates uncertainty, as does the Ianchovichina, E., S. Devarajan, and C. Lakatos. changing structure of gas demand (relative to both coal and renewables) due to environmental 2015. “The Lifting of Iran’s Economic pressures. Sanctions: Global Effects and Strategic Responses.” Mimeo, World Bank, Washington, D.C. References International Energy Agency. 2015. Oil Market Report. Various issues. International Energy BP. 2015. BP Statistical Review of World Energy. Agency, Paris. June. London, U.K. JCPOA. 2015. Joint Comprehensive Plan of Action. Congressional Research Service. 2015. “Iran Vienna, Austria, July 14. Sanctions.” Congressional Research Service, Washington, D.C., August 4. Khajehpour, B. 2015. “Iran Post Sanctions: How Much Oil Will Hit the Market?” Presented to Devarajan, S., and L. Mottaghi. 2015. Economic Columbia University, New York, N.Y., Implications of Lifting Sanctions on Iran. MENA September 28. Annex: Timeline of international oil sanctions 1979 November - US imposes the first sanctions and Turkey from economic sanctions in return for on Iran, banning imports from Iran and freezing their cutting imports of Iranian oil. $12bn assets. 2012 July - European Union boycott of Iranian oil 1995 March - US companies are prohibited from exports comes into effect. investing in Iranian oil and gas and trading with 2012 October - Iran’s currency, the real, falls to a Iran. record low against the US dollar, losing about 50% 1996 April - Congress passes a law requiring the of its value since 2011. EU countries announce US government to impose sanctions on foreign further sanctions against Iran focusing on banks, firms investing more than $20m a year in the trade and gas imports and freezing assets of energy sector. individuals and companies that supply Iran with technology. 2006 December - The UN Security Council imposes sanctions on Iran’s trade in nuclear-related 2013 November - Iran agrees to curb uranium materials/technology and freezes the assets of enrichment above 5% and give UN inspectors individuals and companies. better access in return for about $7 billion in sanctions relief at talks with the P5+1 group—US, 2007 October - US announces sweeping new Britain, Russia, China, France, and Germany—in sanctions against Iran, the toughest since 1979. Geneva. UN Security Council tightens economic and trade sanctions on Tehran. 2015 April - Iran and the EU reach a nuclear framework agreement and set for a final agreement 2010 June - UN Security Council imposes a in July 2015 with attendant lifting of the EU and fourth round of sanctions against Iran over its the US sanctions on Iran. nuclear program, including tighter financial curbs and an expanded arms sanctions. 2015 July 14th - The P5+1 group reach an agreement with Iran on limiting Iranian nuclear 2011 May and December – the assets of 243 activity in return for the lifting of sanctions. Iranian entities and around 40 more individuals are frozen and visa bans imposed. 2015 July 20th - The U.N. Security Council unanimously approved the July 14th agreement. 2012 January - US imposes sanctions on Iran's central bank, for its oil export profits. Iranian 2015 October 18th – “Adoption Day.” The July threatens to block the transport of oil through the 14th agreement (The Joint Comprehensive Plan of Strait of Hormuz. Action) comes into effect. 2012 June - US bans the world’s banks from completing oil transactions with Iran, and exempts Source: Devarajan and Mottaghi (2015). seven major customers India, South Korea, Malaysia, South Africa, Sri Lanka, Taiwan, China CO M M O D I T Y M A R K ET S O U T L OO K october 2015 29 Metals output. Capital expenditures for new capacity have declined significantly which will help to rebalance markets in coming years. Amid oversupply in most markets, metals prices Nickel prices plunged 19 percent due to weak de- fell 12 percent in the third quarter, a fourth straight mand, destocking from the stainless steel sector quarterly retreat (Figure 11). Declines occurred in (which consumes about 70 percent of world re- all metals. The surpluses reflected slowing demand, fined nickel), and resilient Chinese output. LME notably from China and other emerging econo- inventories remain near record highs (Figure 14) mies, and weak global indicators for industrial pro- and there are reported large non-exchange stocks duction and manufacturing. But it also reflected in Asia. China’s nickel pig iron (NPI) production, ongoing supply increases, and still-high stocks for while contracting, has held up longer than ex- a number of metals. The World Bank Metals Price pected following Indonesia’s ore export ban (en- Index for September was 50 percent below its high acted to encourage domestic processing). Chinese in February 2011. producers have secured supplies from the Philip- pines and tapped large stockpiles of Indonesian ore The sell-off was exacerbated by China’s devaluation acquired prior to the ban in January 2014—al- of the yuan and plunging equity values, adding to though these stocks are now running out. Ship- concerns about future metal demand. China’s share ments from new NPI plants in Indonesia are rising of global metal consumption has risen above 50 and further investment in capacity is expected. percent (Figure 12), and has accounted for the Nevertheless, current prices are significantly below bulk of world growth the past 15 years (Figure 13). estimated breakeven costs for much of China’s NPI As the country transitions from an investment-led, sector, and production cuts there and elsewhere are production-based economy to one that is con- expected to help rebalance the nickel market. sumer driven, metals demand is expected to slow as the economy becomes less metal intensive. A Zinc prices dropped 16 percent on sharply higher much larger currency devaluation would further LME stocks, weak global demand to galvanize steel reduce demand as raw material imports become (which accounts for more than half of zinc end-use more costly. There does not appear to be a group of consumption), and strong refined production countries to replace China’s large growth in metal growth in China. The zinc market is expected to demand, at least in the near term. tighten with further large mine closures this year, but the tightness is now expected to be smaller On the supply side, production continues to climb than previously thought due to new mine projects, following years of large investments and higher expansions at existing operations, reactivation of prices. Additional supply increases are expected in previously closed mines, and delayed closures (e.g., the near-to-medium term, which are expected to Skorpion mine in Namibia from 2016 to 2019). keep most markets in surplus. Prices have fallen Key uncertainties center on China’s potential deep into the cost curve for some metals and high- growth for zinc mining/smelting and the pace of cost capacity is being closed. However, deprecia- stainless steel production. tion of producer country currencies and falling production costs (e.g., energy) are helping sustain Figure 11  Metal price indices, monthly Figure 12  World refined metal consumption US$ indices, 2010=100 Million metric tons 150 5 130 4 China 110 3 Base metals 90 OECD 2 70 Iron ore 1 50 Other non-OECD 30 0 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Jan-95 Jan-98 Jan-01 Jan-04 Jan-07 Jan-10 Jan-13 Jan-16 Source: World Bank. Source: World Bureau of Metal Statistics. Note: Last observation is September 2015. Note: Total of aluminum, copper, lead, nickel, tin, and zinc. 30 commodity markets outlook OCTO B ER 2 0 1 5 Copper prices fell 13 percent amid weak demand in 2011—on continued oversupply and weak demand. China, elevated stocks, and steady increases in new Prices rose in August/September following lower ex- mine capacity. There have been significant supply dis- ports out of Australia and low port stocks in China, ruptions due to heavy rains and strikes in Chile, lack but Australian shipments have recovered and surplus of rainfall/electric-power in Zambia and Democratic conditions are expected to continue. Significant new Republic of the Congo, and drought affecting opera- low-cost iron ore capacity continues to come on-line tions and river transport in Papua New Guinea. Some in Australia and Brazil, forcing closure of high-cost producers have announced plans to idle production in production in China and elsewhere. As new sources 2016 because of the low price environment. New mine of supply hit the market, further displacement will supply is coming on-line in the next few years, mainly likely be required to balance the market. from a number of mid-size mines in the Americas, and Metals prices are projected to decline by 19 percent in is expected to keep the market in surplus. 2015 due to increases in new production capacity and Lead prices declined 12 percent due to weak battery slowing demand growth in China. The largest decline demand, especially in China where vehicle sales have is for iron ore, which is expected to fall by 40 percent slowed and the e-bike sector has plateaued. Supplies of due to significant increases in new capacity from Aus- lead from both primary and secondary (battery recy- tralia and Brazil, followed by nickel (down 28 per- cling) sources have been adequate, although LME cent) and tin (down 26 percent). Most other prices stocks declined the past two months. Lead supply— are expected to decline as markets remain in surplus often a by-product of zinc mine production—will be amid high stocks. Markets are expected to tighten in affected by zinc mine closures. Much will depend on the medium term due to reduced investment in new China where mine supply output has risen strongly in production capacity, stronger global demand, and the past, but fell in 2014 due to environmental and some specific factors, including Indonesia’s ore export profitability issues. The majority of lead supply will ban and closure of large zinc mines due to continue to come from battery recycling. exhaustion. Aluminum prices fell 10 percent, despite falling LME Downside risks to the forecast include slower demand inventories, on slowing demand and continued strong in China and tightening environmental constraints to growth in smelting capacity in China. There have been reduce pollution. On the supply side, lower costs and closures of high-cost capacity, including within China, further producer currency depreciation could sustain but these fall short of the growth in new low-cost ca- surplus output and delay supply rebalancing. Upside pacity in China, resulting in a global surplus. Further risks are centered on stronger demand growth and cuts are required to balance the market, but closures supply side factors such as project delays and disrup- are expensive and often slow to materialize, in part due tions, falling ore grades, environmental constraints, to local government pressures in China to sustain em- and closure of high-cost capacity. ployment. Aluminum demand remains relatively ro- bust globally due to its diversified use in multiple sec- tors, and is expected to be a key driver going forward. Iron ore prices decreased 6 percent—down a seventh straight quarter and to less than one-third of its high in Figure 13  World metal consumption growth Figure 14  Nickel price and LME stocks, daily Million metric tons US$/ton Thousand metric tons OECD 12 Other non-OECD 60,000 500 Thousands China 8 50,000 400 40,000 4 300 Nickel price (LHS) 30,000 0 200 20,000 -4 100 10,000 LME stocks (RHS) -8 0 0 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Source: World Bureau of Metal Statistics. Source: Bloomberg. Note: Consumption reflects the sum of aluminum, zinc, lead, nickel and copper. Note: Last observation is October 16, 2015. CO C O M M O D I T Y M A R K ET ETSS O U T L OO K october 2015 31 Precious metals ing up to 76 in September (compared with an av- erage of 65 over the past three decades). Reduced silver intensity in the electronic and photovoltaic sectors and declining trends in photographic ap- Precious metals prices fell 7 percent in the third plications contributed to lower consumption. Like quarter (Figure. 15) on weakening investment de- gold, investor sentiment remains, but consumer mand. Platinum led the declines falling by 13 per- intake of silver bars and coins in the U.S. has been cent, mainly on oversupply from rising production strong. Mine supply continues to expand, with in South Africa, while silver and gold prices fell 9 gains mainly in the Americas and Asia (Figure 16). and 6 percent, respectively. Expectations of a U.S. interest rate hike and dollar appreciation damp- Platinum prices continued to fall more steeply ened investor sentiment. than its peers reflecting a recovery in South African mine output from last year’s strikes. However, a Following a strong start to the year, gold prices significant portion of the industry is losing money have declined despite concerns over the Chinese at current prices and some production cutbacks economy and debt/political issues in Greece. These and deferments have been announced. Demand conditions were outweighed by investor expecta- from the auto sector remains buoyant due to in- tions of dollar strength and a U.S. interest rate in- creased auto production, particularly in Europe, crease—the key drivers going forward. While the but the auto/platinum industries received a jolt decision by the U.S. Federal Reserve on September from the Volkswagen diesel emissions scandal. 17th to defer a rate hike provided some respite, it (Platinum is mainly used to produce catalysts for was quickly followed by the Federal Reserve’s state- diesel vehicles.) ment that the central bank is on track to raise in- terest rates this year. Rising interest rates typically Precious metals prices are projected to decline 8 have negative implications for gold prices, as inves- percent in 2015 on lower investment demand. tors seek yield-bearing assets. Platinum will register the steepest decline, (22 per- cent) owing to expected surplus supply. Silver Physical demand for gold has been weak this year, prices are expected to fall 17 percent, as the metal although third-quarter imports were strong in In- is generally thought to be more vulnerable than dia and rebounded in China. Gold mine supply is gold to shifting investment sentiment. Gold prices trending lower as companies cut investments and are projected to fall 8 percent, largely driven by ex- focus on aggressive cost reduction. At this point, pectations of a rising dollar and tightening in U.S. containing costs is the objective rather shutting monetary policy. Downside risks to the forecast down mines, a more expensive proposition. Lower include stronger-than-expected monetary tighten- energy prices, improved efficiency, and depreciat- ing and dollar strength. Significantly weaker U.S. ing producer currencies have helped reduce costs. growth (and the ramifications for the dollar) and However, lower capital expenditures for explora- monetary policy pose upside risk. For platinum tion and development will negatively impact fu- over the longer term, how consumers and govern- ture production. ments respond to the Volkswagen scandal, pose Silver prices fell more than gold, in part due weak added risks. industrial demand, with the gold/silver ratio edg- Figure 15  Precious metal prices, monthly Figure 16  World silver mine production US$/toz US$/toz Thousand metric tons 2,100 45 2500 Platinum Africa Oceania Europe (LHS) 1,800 Gold (LHS) 2000 35 1,500 1500 25 1,200 1000 15 900 Silver 500 (RHS) 600 5 0 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Jan-95 Jan-98 Jan-01 Jan-04 Jan-07 Jan-10 Jan-13 Jan-16 Source: World Bank. Source: World Bureau of Metal Statistics. Note: Last observation is September 2015. Note: Last observation is July 2015. 32 commodity markets outlook OCTO B ER 2 0 1 5 Fertilizers lower), and expected lack of subsidy funding be- ginning in October for the current fertilizer year. Phosphate production remains below capacity due Fertilizer prices fell 1 percent in the third quarter, to curtailments in Tunisia and South Africa. down a second consecutive quarter, due to excess Potash (potassium chloride) prices fell 1 percent supply capacity and weak import demand among owing to weak demand, particularly in Brazil, and major agricultural consuming countries (Figure destocking. The adverse effects of El Niño is ex- 17). Urea prices led the decline—falling 3 percent pected to weaken demand into 2016, notably In- and down for the fifth straight quarter—while dia and South-east Asia. India has been pushing to phosphate and potash prices fell 1 percent. De- renegotiate contract prices lower through March. mand weakness stems from declining purchasing Upcoming annual contract negotiations with Chi- power among farmers globally, lower agriculture nese and Indian buyers are expected to result in commodity prices, and depreciating currencies of lower prices due to surplus capacity. emerging economies. In the coming months, ad- Fertilizer prices are projected to decline by 5 per- verse weather from El Niño may further impact cent in 2015, because of weak demand, rising sup- agriculture production and fertilizer demand in ply, and destocking. Nutrient application, which Asia. Supply surpluses are being exacerbated by has been on a rising trend (Figure 18), faces head- falling costs, cheaper feedstock prices (e.g., natural winds as farmers are likely to thrift on fertilizer use gas), and declining producer currencies. to reduce costs and offset effects of lower crop The large decline in urea prices was mainly due to prices and currency depreciation. Prices are gener- oversupply amid weak demand. Imports into Bra- ally expected to increase moderately over the me- zil are down sharply this year, and it appears buyers dium term due to expected moderate growth in there and in South-east Asia are adopting just-in- demand, higher energy costs, and required new time purchases in anticipation of lower prices. capacity of primary and processed supply. Contributing to the downward pressure on prices Price forecast risks are skewed to the downside ow- were increases in new capacity, notably in the Mid- ing to poor financial positions of farmers, and ex- dle East and North Africa, and lower energy prices pected increases in new production capacity. Sub- for high cost producers in Europe (spot/hub based sidy reform in large consuming countries would gas), Ukraine (oil-indexed gas) and China (coal). curtail demand, and also adjust current imbalances China’s exports increased sharply, with the country in fertilizer use, notably in India where urea appli- benefiting from lower coal prices and currency cation is favored over phosphate and potash. On devaluation. the upside, higher agriculture prices and currency Prices for DAP (diammonium phosphate) fell 1 appreciation could boost fertilizer demand and percent due to weak demand especially in Brazil. prices. TSP (triple superphosphate) prices were flat. In- dia’s imports have been robust but may be nega- tively impacted by a lower rupee, weaker monsoon season (with rainfall estimated to be 15 percent Figure 17  Fertilizer prices Figure 18 Global nutrient consumption US$/mt Million metric tons 1200 DAP 200 Nitrogen Phosphorus Potassium 1000 160 Potassium 800 chloride 120 600 80 400 40 200 Urea 0 0 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 2004-05 2006-07 2008-09 2010-11 2012-13 2014-15 Source: World Bank. Source: Agrium Factbook, International Fertilizer Association. Note: Last observation is September 2015. Note: Consumption does not include industrial use. CO M M O D I T Y M A R K ET S O U T L OO K october 2015 33 Agriculture supplies, combined with a marginal increase in consumption, imply a lower S/U ratio (0.19 in 2015/16 versus last season’s 0.20). Lastly, global rice production is expected to decline marginally as Supply conditions for agricultural commodities re- well (from 479 to 474 million tons) on weakening mained favorable in the third quarter. Most prices prospects in Asia, particularly India and Thailand, continued their broad-based declines, with the the world’s top rice exporter. overall index down 2.5 percent for the quarter and 13 percent lower than a year prior (Figure 19). The Global supplies (beginning stocks plus produc- two key food sub-indices—grains, and edible oils tion) of all three grains are expected to reach 2.68 and meals—declined more than 4 percent in the million tons in 2015-16, down marginally from quarter. Agricultural raw materials declined almost last season’s record of 2.71 million tons, according 2 percent for the quarter, while beverage prices re- to the U.S. Department of Agriculture’s October mained virtually unchanged. 2015 assessment. Thus, the lower S/U ratio of maize and rice will be offset by that of wheat (Fig- ure 20). Food The World Bank’s Edible Oils and Meals Price In- Grain prices declined about 5 percent in the third dex declined 4.2 percent in the quarter, following quarter and are more than 13 percent lower than a across-the-board declines in its components; the year ago. Wheat prices declined more than 15 per- largest was in palm oil, more than 13 percent. The cent in the quarter, followed by rice (down 3 per- index is down almost 20 percent compared to a cent); maize prices changed very little. year ago. Global production of wheat is expected to reach a The oilseed outlook is stable as well, with global new record in 2015-16 following upward revisions supplies of the 10 major oilseeds expected to reach to output by China, the European Union, and Ka- 715 million tons in 2015-16, up from 688 million zakhstan. Trade volume, however, is expected to tons the previous season; most of the increase decline for the year following lower imports by comes from soybeans. The outlook is positive for Morocco and several Asian wheat importers. Al- the 17 most consumed edible oils: global produc- though global wheat consumption is projected to tion for 2015-16 will reach 208 million tons, up increase moderately, the stock-to-use (S/U) ratio (a from last season’s 203 million tons. Most of the measure of the abundance of supplies relative to increase is expected in soybean oil, due to high demand) will reach a record high during 20015/16. crop yields in South America (particularly Argen- The market for maize is expected to become tighter, tina and Brazil), and palm oil, due to increased with global production projected to reach 973 mil- output in Indonesia. lion tons this season—marginally lower than the In view of well-supplied markets for most grains, May 2015 assessment, but 3.5 percent lower than oilseeds, and edible oils, the World Bank’s Food 2014/15. Weather-related production declines in Commodity Price Index is expected to average the United States and the EU, were not enough to more than 15 percent lower in 2015 compared to offset Brazil’s improved outlook. Tighter maize 2014, on top of a 7 percent decline in 2014. Edible Figure 19  Agriculture price indices, monthly Figure 20  Stocks-to-use ratios US$ indices, 2010=100 Percent 140 40 Food 120 Wheat 30 Raw materials 100 20 Rice 80 Beverages Maize 60 10 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 1990 1993 1996 1999 2002 2005 2008 2011 2014 Source: World Bank. Source: U.S. Department of Agriculture (October 2015 update). Note: Last observation is September 2015. Note: Last observation is 2015-16. 34 commodity markets outlook OCTO B ER 2 0 1 5 oils and meals will decline the most (down 21.5 • Biofuels. The outlook for agricultural prices percent), followed by grains (down 14.5 percent), also assumes that while biofuels will continue and other food items (down 7.5 percent). to play a key role in the behavior of agricul- Although still in the early stages, global grain sup- tural commodity markets, it will be less promi- plies in 2015-16 will be marginally lower, down 1 nent than in the recent past. Currently, biofu- percent from last season (Figure 21). Global edible els account for close to 1.5 mb/d in oil and meals supplies are each expected to rise energy-equivalent terms, up from 0.4 mb/d a about 3 percent from last season. decade ago (Figure 22). Although biofuels will grow over the projection period, the growth A number of short– and long-term risks underpin will be much slower than earlier assessments. the food commodity price projections. In fact, some analysts point to a slight reduc- • Weather. A weather-related risk is El Niño, tion in global biodiesel production during which typically adversely affects agricultural 2016, as policy makers are increasingly realiz- production in the Southern Hemisphere, es- ing that the environmental and energy inde- pecially countries in Latin America and East pendence benefits of biofuels may not out- Asia, as well Australia. Recent weather fore- weigh their costs and gradually ease policies casts suggest that the current El Niño episode the require diversion of food commodities to could be one of the strongest on record. How- the production of biofuels. ever, its impact on commodity prices is likely • Trade policies. On trade policies, export re- to be predominantly local rather than global. strictions are unlikely to be imposed, given That’s because global markets are currently that most markets are well-supplied. Even if well-supplied, and country-specific factors some restrictions are imposed, their impact on could have a significant impact on local prices prices is likely to be muted. (for more information, see the Special Focus section). • Investment fund activity. Lastly, investment fund activity, which was on the rise for almost • Energy prices. Given the high energy require- 15 years, has stabilized at just below $320 bil- ments of agriculture—estimated to be four to lion, according to Barclayhedge, which tracks five time more energy intensive than manufac- developments in the hedge fund industry. This turing—another risk relates to energy and fer- level is close to the 2012-14 average. The con- tilizer prices. Oil prices are expected to average tinuing weakness in prices across the entire $52/bbl in 2015, down more than 45 percent commodity spectrum is likely to induce an from 2014, while fertilizer prices are projected outflow of funds invested in commodity to fall 5 percent in 2015 (on top of last year’s markets. 12 percent decline). Low oil and fertilizer prices will ease the cost pressures that most food commodities experienced during the post-2005 price boom. Figure 21 Global grain production and Figure 22 Global biofuel production consumption Billion metric tons Million barrels per day of oil equivalent 2.4 1.5 Production Consumption 2.2 1.2 2.0 0.9 1.8 0.6 1.6 0.3 1.4 1.2 0.0 1990 1993 1996 1999 2002 2005 2008 2011 2014 1990 1993 1996 1999 2002 2005 2008 2011 2014 Source: U.S. Department of Agriculture (October 2015 update). Source: BP Statistical Review of World Energy and World Bank. Note: Grains include maize, wheat, and rice. Note: The last observation is 2015 and is a projection. CO M M O D I T Y M A R K ET S O U T L OO K october 2015 35 Beverages Agricultural raw materials The World Bank’s Beverage Price Index changed The World Bank’s Raw Material Price Index de- very little in the third quarter, but individual prices clined marginally in the third quarter (-2.2 per- followed diverse paths: tea and cocoa prices rose 3 cent), but is 9 percent lower than a year ago and and 6 percent, respectively, while coffee prices fell one-third below its early 2011 peak. The pattern is 5 and 6 percent for robusta and arabica, similar to the declines in two industrial commod- respectively. ity indices—energy and metals. The weakness of Arabica prices are 26 percent lower than last year’s industrial commodity prices reflects weakness in third quarter. Last year the coffee market experi- the global economy and the larger production ca- enced a large production shortfall due to poor pacity induced by the post-2015 price boom. weather in Brazil, which pushed arabica prices to Cotton prices declined marginally in the third record highs. Robusta price have fallen as well, quarter as the market returned to deficit after six down 6 percent for the quarter and 16 percent consecutive years of surpluses—they are down 8 from a year ago (Figure 23). The coffee market is percent from last year. The surplus of the past five projected to return to a surplus in 2015-16, with years went mostly to stock-building by China, Brazil (the world’s top arabica supplier) bouncing which currently accounts for 57 percent of world back to 48 million bags during the 12-month pe- stocks (Figure 24). Global cotton stocks currently riod ending September, and Vietnam (the world’s account for almost one full year of consumption, a top robusta supplier) maintaining its output above highly atypical situation. Although cotton prices 26 million bags. As a result, arabica and robusta are expected to average 15 percent lower in 2015, a prices in 2015 are expected to be 21 and 12 per- moderate price recovery is expected for 2016 and cent lower compared to a year ago, before stabiliz- 2017, based on the assumption that no sharp ing in 2016. draw-down in Chinese stocks will take place. After rising 5 percent in the second quarter, cocoa After a short-lived recovery in the second quarter, prices gained another 6 percent in the current pe- natural rubber prices plunged to a 10-year low riod. The market is expected to remain in deficit in (down nearly 30 percent from June to September). 2015/16 due to a production shortfall in Ghana, The downward pressure on rubber prices comes following an even larger deficit in the previous sea- from weak growth of tire sales, especially in China, son. For the year, however, cocoa prices are ex- and strong competition from synthetic rubber. pected to increase only marginally. Finally, tea (Two-thirds of natural rubber goes to tire manu- prices, which gained considerable momentum last facturing.) Despite persistent weakening in prices, quarter (+14 percent), have eased since their $3.00/ production of natural rubber is strong. Rubber kg surge in July. Supplies look comfortable, espe- prices, projected to average $1.58/kg in 2015, are cially in East Africa, as earlier reports that cocoa expected to gradually recover in 2016 and and tea markets may be subjected to El Niño-re- beyond. lated shortfalls are unlikely to materialize. Figure 23  Coffee prices, daily Figure 24  Cotton stocks US$/kg US$/kg Million metric tons 6 2.3 25 Rest of world Arabica China (LHS) 20 5 2.1 15 4 1.9 10 Robusta (RHS) 3 1.7 5 2 1.5 0 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 1990 1993 1996 1999 2002 2005 2008 2011 2014 Source: Bloomberg. Source: International Cotton Advisory Committee. Note: Last observation is October 16, 2015. Note: Last observation is 2015-16. APPENDIX A Historical commodity prices Price forecasts COMMODITY MARKETS OUTLOOK | OCTOBER 2015 APPENDIX A 39 TABLE A.1  Commodity prices Q3 Q4 Q1 Q2 Q3 Jul Aug Sep Commodity Unit 2013 2014 2014 2014 2015 2015 2015 2015 2015 2015 Energy Coal, Australia $/mt * 84.6 70.1 67.9 62.9 61.2 59.0 57.3 59.1 58.6 54.2 Coal, Colombia $/mt 71.9 65.9 66.8 63.7 57.3 54.3 50.4 52.3 49.7 49.1 Coal, South Africa $/mt 80.2 72.3 70.2 65.8 62.1 60.7 54.3 57.1 54.4 51.6 Crude oil, average $/bbl 104.1 96.2 100.4 74.6 51.6 60.5 48.8 54.3 45.7 46.3 Crude oil, Brent $/bbl * 108.9 98.9 102.1 76.0 53.9 62.1 50.0 55.9 47.0 47.2 Crude oil, Dubai $/bbl * 105.4 96.7 101.5 74.6 52.2 61.4 49.9 56.3 47.2 46.2 Crude oil, WTI $/bbl * 97.9 93.1 97.5 73.2 48.6 57.8 46.4 50.9 42.9 45.5 Natural gas, Index 2010=100 112.1 111.7 102.0 101.6 85.4 74.2 72.0 73.3 72.7 70.1 Natural gas, Europe $/mmbtu * 11.8 10.1 9.2 9.5 8.6 7.3 6.9 6.9 7.0 6.7 Natural gas, US $/mmbtu * 3.7 4.4 3.9 3.8 2.9 2.7 2.7 2.8 2.8 2.6 Natural gas, Japan $/mmbtu * 16.0 16.0 15.4 15.7 14.3 9.2 9.0 8.9 9.0 9.0 Non-Energy Agriculture Beverages Cocoa $/kg ** 2.4 3.1 3.2 3.0 2.9 3.1 3.3 3.3 3.2 3.3 Coffee, arabica $/kg ** 3.1 4.4 4.6 4.6 3.9 3.5 3.4 3.4 3.5 3.2 Coffee, robusta $/kg ** 2.1 2.2 2.2 2.3 2.1 2.0 1.9 1.9 1.9 1.8 Tea, average $/kg 2.9 2.7 2.8 2.6 2.4 2.8 2.9 3.0 2.9 2.7 Tea, Colombo $/kg ** 3.5 3.5 3.5 3.4 3.2 3.0 2.8 3.0 2.9 2.6 Tea, Kolkata $/kg ** 2.7 2.6 2.9 2.6 1.8 2.6 2.8 2.9 2.8 2.7 Tea, Mombasa $/kg ** 2.4 2.0 2.0 1.9 2.3 2.8 3.0 3.1 2.9 2.8 Food Oils and Meals Coconut oil $/mt ** 941 1,280 1,204 1,185 1,147 1,115 1,067 1,100 1,037 1,063 Copra $/mt 627 854 805 792 760 737 708 735 689 699 Fishmeal $/mt 1,747 1,709 1,767 1,792 1,712 1,523 1,472 1,466 1,469 1,480 Groundnuts $/mt 1,378 1,296 1,276 1,356 1,333 1,290 1,193 1,280 1,150 1,150 Groundnut oil $/mt ** 1,773 1,313 1,345 1,368 1,371 1,346 1,332 1,345 1,331 1,321 Palm oil $/mt ** 857 821 772 715 683 664 574 635 549 538 Palmkernel oil $/mt 897 1,121 988 958 1,046 957 802 869 739 798 Soybean meal $/mt ** 545 528 493 471 432 391 398 415 394 386 Soybean oil $/mt ** 1,057 909 865 828 774 774 734 751 730 721 Soybeans $/mt ** 538 492 457 440 411 394 385 405 381 368 Grains Barley $/mt ** 202 138 130 153 189 201 200 214 203 184 Maize $/mt ** 259 193 174 174 174 168 169 180 163 166 Rice, Thailand 5% $/mt ** 506 423 433 421 417 385 374 392 373 357 Rice, Thailand 25% $/mt 473 382 400 402 397 372 362 376 362 347 Rice, Thailand A1 $/mt 474 425 449 428 416 388 376 390 378 360 Rice, Vietnam 5% $/mt 392 407 435 414 363 351 337 346 340 326 Sorghum $/mt 243 207 184 201 237 215 190 213 179 178 Wheat, US HRW $/mt ** 312 285 262 258 239 216 183 197 180 173 Wheat, US SRW $/mt 277 245 214 239 223 205 196 207 188 194 Other Food Bananas, EU $/kg 1.0 1.0 1.0 1.0 0.9 0.9 0.9 0.9 0.9 0.9 Bananas, US $/kg ** 0.9 0.9 0.9 0.9 1.0 1.0 0.9 0.9 1.0 0.9 Meat, beef $/kg ** 4.1 4.9 5.6 5.7 4.8 4.5 4.5 4.5 4.7 4.5 Meat, chicken $/kg ** 2.3 2.4 2.5 2.5 2.5 2.5 2.5 2.6 2.5 2.5 Meat, sheep $/kg 5.2 6.4 6.5 6.1 5.6 5.4 5.1 5.2 5.1 5.0 Oranges $/kg ** 1.0 0.8 0.8 0.7 0.7 0.6 0.7 0.6 0.7 0.6 Shrimp $/kg 13.8 17.2 18.1 16.1 15.8 15.7 15.4 15.9 15.9 14.6 Sugar, EU $/kg ** 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 Sugar, US $/kg ** 0.5 0.5 0.6 0.6 0.5 0.5 0.5 0.5 0.5 0.5 Sugar, World $/kg ** 0.4 0.4 0.4 0.4 0.3 0.3 0.3 0.3 0.3 0.3 40 A P P EN D I X A C O M M O D I T Y M A R K ETS O U T L OO K | O C TO B E R 2 0 1 5 TABLE A.1  Commodity prices Q3 Q4 Q1 Q2 Q3 Jul Aug Sep Commodity Unit 2013 2014 2014 2014 2015 2015 2015 2015 2015 2015 Raw Materials Timber Logs, Africa $/cum 464 465 464 437 395 387 389 385 390 393 Logs, S.E. Asia $/cum ** 305 282 286 260 250 245 244 241 242 248 Plywood ¢/sheets 560 517 525 478 458 450 447 443 443 454 Sawnwood, Africa $/cum 749 789 800 758 726 734 743 746 747 736 Sawnwood, S.E. Asia $/cum ** 853 898 910 863 826 835 845 848 850 837 Woodpulp $/mt 823 877 875 875 875 875 875 875 875 875 Other Raw Materials Cotton $/kg ** 2.0 1.8 1.7 1.5 1.5 1.6 1.6 1.6 1.6 1.5 Rubber, RSS3 $/kg ** 2.8 2.0 1.8 1.6 1.7 1.8 1.5 1.6 1.4 1.3 Rubber, TSR20 $/kg 2.5 1.7 1.6 1.5 1.4 1.5 1.3 1.5 1.3 1.2 Fertilizers DAP $/mt ** 445 472 495 460 483 469 464 469 464 460 Phosphate rock $/mt ** 148 110 112 115 115 115 117 115 115 121 Potassium chloride $/mt ** 379 297 287 301 305 307 303 305 303 300 TSP $/mt ** 382 388 413 405 400 380 380 380 380 380 Urea, E. Europe $/mt ** 340 316 316 315 296 277 268 273 273 259 Metals and Minerals Aluminum $/mt ** 1,847 1,867 1,990 1,970 1,802 1,770 1,592 1,640 1,548 1,590 Copper $/mt ** 7,332 6,863 6,996 6,632 5,833 6,057 5,267 5,457 5,127 5,217 Iron ore $/dmt ** 135.4 96.9 90.3 74.3 63.0 58.3 55.0 52.0 56.0 57.0 Lead $/mt ** 2,140 2,095 2,182 2,001 1,810 1,942 1,717 1,763 1,704 1,684 Nickel $/mt ** 15,032 16,893 18,584 15,860 14,393 13,056 10,579 11,413 10,386 9,938 Tin $/mt ** 22,283 21,899 21,915 19,898 18,370 15,590 15,230 15,072 15,164 15,453 Zinc $/mt ** 1,910 2,161 2,311 2,235 2,080 2,192 1,843 2,001 1,808 1,720 Precious Metals Gold $/toz *** 1,411 1,266 1,281 1,199 1,219 1,193 1,124 1,128 1,118 1,125 Platinum $/toz *** 1,487 1,384 1,433 1,228 1,193 1,127 986 1,009 984 964 Silver $/toz *** 23.8 19.1 19.7 16.5 16.8 16.4 14.9 15.1 14.9 14.8 Commodity Price Indices (2010=100) Energy 127.4 118.3 121.6 93.7 67.3 75.5 62.6 68.8 59.5 59.6 Non-energy 101.7 97.0 96.8 92.7 86.7 84.8 80.7 83.0 79.9 79.1 Agriculture 106.3 102.7 101.2 97.7 92.9 90.2 88.1 90.8 87.5 85.9 Beverages 83.3 101.8 105.3 102.4 93.4 93.6 94.1 96.4 93.9 91.9 Food 115.6 107.4 104.5 101.7 96.5 91.6 88.8 92.3 87.9 86.2 Oils and Meals 115.9 109.0 102.3 97.5 91.3 86.7 83.0 87.7 81.6 79.9 Grains 128.2 103.9 97.7 96.9 95.4 89.9 85.7 91.0 83.8 82.3 Other Food 103.9 108.4 113.4 111.7 104.3 99.7 99.2 99.5 99.9 98.1 Raw Materials 95.4 91.9 91.1 85.5 84.0 85.1 83.3 84.3 83.4 82.0 Timber 102.6 104.9 106.3 99.9 95.7 96.2 96.9 97.1 97.3 96.5 Other Raw Materials 87.6 77.8 74.5 69.7 71.1 73.1 68.3 70.4 68.3 66.2 Fertilizers 113.7 100.5 101.5 102.1 99.3 95.6 94.4 94.9 94.8 93.4 Metals and Minerals 90.8 84.8 87.1 81.4 72.7 72.4 63.9 65.7 62.6 63.4 Base Metals **** 90.3 89.0 92.9 88.5 79.5 79.9 70.0 72.7 68.3 69.1 Precious Metals 115.1 101.1 102.8 94.2 95.6 93.5 87.4 87.9 87.0 87.3 Sources: See Appendix C. Notes: * Included in the energy index; ** Included in the non-energy index; *** Included in the precious metals index: **** Metals and Minerals exluding iron ore. C O M M O D I T Y M A R K ETS O U T L OO K | O C TO B E R 2 0 1 5 A P P EN D I X A 41 TABLE A.2  Price forecast in nominal U.S. dollars Forecasts Commodity Unit 2013 2014 2015 2016 2017 2018 2019 2020 2025 Energy Coal, Australia $/mt 84.6 70.1 58.0 50.0 51.9 53.9 55.9 58.1 70.0 Crude oil, avg, spot $/bbl 104.1 96.2 52.5 51.4 54.6 57.9 61.5 65.3 88.3 Natural gas, Europe $/mmbtu 11.8 10.1 7.4 7.5 7.7 7.8 8.0 8.2 9.0 Natural gas, US $/mmbtu 3.7 4.4 2.8 3.0 3.3 3.5 3.8 4.1 6.0 Natural gas, Japan $/mmbtu 16.0 16.0 10.3 10.5 10.6 10.8 10.9 11.1 12.0 Non-Energy Agriculture Beverages Cocoa $/kg 2.4 3.1 3.1 3.0 2.9 2.9 2.8 2.7 2.4 Coffee, Arabica $/kg 3.1 4.4 3.5 3.5 3.5 3.5 3.5 3.5 3.5 Coffee, robusta $/kg 2.1 2.2 2.0 1.9 1.9 1.9 1.9 1.9 1.8 Tea, avgerage $/kg 2.9 2.7 2.7 2.7 2.8 2.8 2.9 2.9 3.1 Food Oils and Meals Coconut oil $/mt 941 1,280 1,100 1,090 1,079 1,069 1,059 1,049 1,000 Groundnut oil $/mt 1,773 1,313 1,345 1,377 1,410 1,443 1,477 1,512 1,700 Palm oil $/mt 857 821 615 631 648 665 683 701 800 Soybean meal $/mt 545 528 405 412 419 426 433 441 480 Soybean oil $/mt 1,057 909 755 777 799 821 845 869 1,000 Soybeans $/mt 538 492 390 401 413 425 438 450 520 Grains Barley $/mt 202 138 195 195 196 196 197 197 200 Maize $/mt 259 193 170 174 179 184 188 193 220 Rice, Thailand, 5% $/mt 506 423 385 387 390 392 395 397 410 Wheat, US, HRW $/mt 312 285 205 211 217 223 229 235 270 Other Food Bananas, EU $/kg 0.9 0.9 1.0 1.0 1.0 1.0 0.9 0.9 0.9 Meat, beef $/kg 4.1 4.9 4.6 4.5 4.5 4.4 4.4 4.4 4.2 Meat, chicken $/kg 2.3 2.4 2.5 2.5 2.4 2.4 2.4 2.3 2.2 Oranges $/kg 1.0 0.8 0.7 0.7 0.7 0.7 0.8 0.8 1.0 Shrimp $/kg 13.8 17.2 15.4 15.1 14.9 14.6 14.4 14.1 13.0 Sugar, World $/kg 0.4 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.4 Raw Materials Timber Logs, Africa $/cum 464 465 390 400 410 420 431 442 500 Logs, S.E. Asia $/cum 305 282 245 253 262 270 279 289 340 Sawnwood, S.E. Asia $/cum 853 898 835 850 866 881 897 914 1,000 Other Raw Materials Cotton A $/kg 2.0 1.8 1.6 1.6 1.7 1.7 1.8 1.8 2.2 Rubber, RSS3 $/kg 2.8 2.0 1.6 1.7 1.7 1.8 1.9 2.0 2.6 Tobacco $/mt 4,589 4,991 5,000 4,948 4,896 4,844 4,794 4,743 4,500 Fertilizers DAP $/mt 445 472 469 466 463 460 457 454 440 Phosphate rock $/mt 148 110 117 114 111 108 105 103 90 Potassium chloride $/mt 379 297 300 301 302 303 304 305 310 TSP $/mt 382 388 385 381 378 374 371 367 350 Urea, E. Europe $/mt 340 316 275 275 276 276 277 277 280 Metals and Minerals Aluminum $/mt 1,847 1,867 1,700 1,650 1,704 1,759 1,816 1,875 2,200 Copper $/mt 7,332 6,863 5,625 5,749 5,876 6,006 6,139 6,275 7,000 Iron ore $/dmt 135.4 96.9 58.0 59.5 61.1 62.6 64.3 66.0 75.0 Lead $/mt 2,140 2,095 1,800 1,836 1,874 1,912 1,950 1,990 2,200 Nickel $/mt 15,032 16,893 12,200 12,818 13,468 14,150 14,867 15,620 20,000 Tin $/mt 22,283 21,899 16,300 16,871 17,462 18,074 18,707 19,362 23,000 Zinc $/mt 1,910 2,161 1,980 2,100 2,131 2,163 2,196 2,228 2,400 Precious Metals Gold $/toz 1,411 1,266 1,175 1,156 1,138 1,120 1,102 1,084 1,000 Silver $/toz 23.8 19.1 16.0 16.1 16.2 16.3 16.4 16.5 17.0 Platinum $/toz 1,487 1,384 1,080 1,116 1,153 1,192 1,232 1,273 1,500 Next update: January 2016. 42 A P P EN D I X A C O M M O D I T Y M A R K ETS O U T L OO K | O C TO B E R 2 0 1 5 TABLE A.3  Commodity price forecasts (2010=100) Forecasts Commodity Unit 2013 2014 2015 2016 2017 2018 2019 2020 2025 Energy Coal, Australia $/mt 79.7 66.2 54.9 46.5 47.4 48.5 49.5 50.6 56.1 Crude oil, avg, spot $/bbl 98.1 90.9 49.7 47.7 49.9 52.1 54.5 56.9 70.8 Natural gas, Europe $/mmbtu 11.1 9.5 7.0 7.0 7.0 7.1 7.1 7.1 7.2 Natural gas, US $/mmbtu 3.5 4.1 2.7 2.8 3.0 3.2 3.4 3.6 4.8 Natural gas, Japan $/mmbtu 15.0 15.1 9.7 9.7 9.7 9.7 9.7 9.7 9.6 Non-Energy Agriculture Beverages Cocoa $/kg 2.3 2.9 2.9 2.8 2.7 2.6 2.5 2.4 1.9 Coffee, Arabica $/kg 2.9 4.2 3.3 3.3 3.2 3.1 3.1 3.1 2.8 Coffee, robusta $/kg 2.0 2.1 1.8 1.8 1.8 1.7 1.7 1.6 1.4 Tea, avgerage $/kg 2.7 2.6 2.6 2.5 2.5 2.5 2.5 2.5 2.5 Food Oils and Meals Coconut oil $/mt 887 1,209 1,041 1,012 986 962 937 914 802 Groundnut oil $/mt 1,672 1,240 1,273 1,279 1,288 1,298 1,308 1,318 1,363 Palm oil $/mt 808 776 582 587 592 599 605 611 642 Soybean meal $/mt 514 499 383 383 383 383 384 384 385 Soybean oil $/mt 996 859 715 721 730 739 748 757 802 Soybeans $/mt 508 464 369 373 378 382 387 392 417 Grains Barley $/mt 191 130 185 182 179 177 174 172 160 Maize $/mt 245 182 161 162 164 165 167 169 176 Rice, Thailand, 5% $/mt 477 399 364 360 356 353 350 346 329 Wheat, US, HRW $/mt 294 269 194 196 198 200 203 205 217 Other Food Bananas, EU $/kg 0.9 0.9 0.9 0.9 0.9 0.9 0.8 0.8 0.7 Meat, beef $/kg 3.8 4.7 4.3 4.2 4.1 4.0 3.9 3.8 3.4 Meat, chicken $/kg 2.2 2.3 2.4 2.3 2.2 2.2 2.1 2.0 1.8 Oranges $/kg 0.9 0.7 0.6 0.6 0.6 0.7 0.7 0.7 0.8 Shrimp $/kg 13.0 16.3 14.6 14.1 13.6 13.2 12.7 12.3 10.4 Sugar, World $/kg 0.4 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.3 Raw Materials Timber Logs, Africa $/cum 437 439 369 371 375 378 381 385 401 Logs, S.E. Asia $/cum 288 266 232 235 239 243 247 252 273 Sawnwood, S.E. Asia $/cum 804 848 790 790 791 793 795 796 802 Other Raw Materials Cotton A $/kg 1.9 1.7 1.5 1.5 1.5 1.5 1.6 1.6 1.8 Rubber, RSS3 $/kg 2.6 1.8 1.5 1.5 1.6 1.7 1.7 1.8 2.1 Tobacco $/mt 4,327 4,714 4,733 4,597 4,474 4,358 4,244 4,134 3,609 Fertilizers DAP $/mt 419 446 444 433 423 414 405 396 353 Phosphate rock $/mt 140 104 111 106 101 97 93 89 72 Potassium chloride $/mt 357 281 284 280 276 273 269 266 249 TSP $/mt 360 367 364 354 345 337 328 320 281 Urea, E. Europe $/mt 321 299 260 256 252 249 245 242 225 Metals and Minerals Aluminum $/mt 1,741 1,764 1,609 1,533 1,557 1,582 1,608 1,634 1,764 Copper $/mt 6,913 6,482 5,324 5,341 5,371 5,403 5,435 5,468 5,614 Iron ore $/dmt 127.6 91.6 54.9 55.3 55.8 56.4 56.9 57.5 60.2 Lead $/mt 2,018 1,979 1,704 1,706 1,712 1,720 1,727 1,734 1,764 Nickel $/mt 14,173 15,955 11,548 11,909 12,309 12,728 13,163 13,612 16,041 Tin $/mt 21,010 20,683 15,428 15,674 15,959 16,257 16,563 16,873 18,447 Zinc $/mt 1,801 2,041 1,874 1,951 1,948 1,946 1,944 1,942 1,925 Precious Metals Gold $/toz 1,331 1,195 1,112 1,074 1,040 1,007 975 945 802 Silver $/toz 22.5 18.0 15.1 15.0 14.8 14.7 14.5 14.4 13.6 Platinum $/toz 1,402 1,307 1,022 1,037 1,054 1,072 1,090 1,109 1,203 Sources and Notes: See Appendix C. Next update: January 2016. C O M M O D I T Y M A R K ETS O U T L OO K | O C TO B E R 2 0 1 5 A P P EN D I X A 43 TABLE A.4  Commodity price index forecasts (2010=100) Forecasts Commodity Unit 2013 2014 2015 2016 2017 2018 2019 2020 2025 Nominal US dollars (2010=100) Energy 127.4 118.3 67.1 65.9 69.8 73.9 78.3 82.9 111.1 Non-energy commodities 101.7 97.0 83.0 84.0 85.4 86.8 88.2 89.8 98.2 Agriculture 106.3 102.7 89.4 90.6 91.8 93.0 94.4 95.7 103.3 Beverages 83.3 101.8 92.9 92.1 91.4 90.6 89.9 89.3 86.2 Food 115.6 107.4 91.0 92.4 93.8 95.3 96.8 98.3 106.8 Oils and meals 115.9 109.0 85.6 87.5 89.6 91.6 93.8 95.9 107.7 Grains 128.2 103.9 88.8 90.6 92.5 94.3 96.3 98.2 108.8 Other food 103.9 108.4 100.2 100.4 100.6 100.9 101.2 101.5 103.8 Raw materials 95.4 91.9 83.7 85.3 87.1 88.9 90.8 92.7 103.5 Timber 102.6 104.9 96.1 98.2 100.3 102.4 104.6 106.8 118.8 Other Raw Materials 87.6 77.8 70.0 71.3 72.6 74.1 75.6 77.2 86.7 Fertilizers 113.7 100.5 95.5 95.0 94.5 94.0 93.6 93.1 91.1 Metals and minerals * 90.8 84.8 68.5 69.2 71.1 73.1 75.1 77.2 88.5 Base Metals ** 90.3 89.0 75.2 75.9 77.9 80.1 82.3 84.6 97.2 Precious Metals 115.1 101.1 91.9 90.8 89.8 88.8 87.9 86.9 82.5 Constant 2010 US dollars (2010=100), deflated by the MUV Index Energy 120.1 111.7 63.5 61.2 63.8 66.5 69.3 72.3 89.1 Non-energy commodities 95.9 91.6 78.6 78.0 78.0 78.1 78.1 78.2 78.8 Agriculture 100.2 97.0 84.6 84.1 83.9 83.7 83.5 83.4 82.9 Beverages 78.5 96.1 87.9 85.6 83.5 81.5 79.6 77.8 69.2 Food 109.0 101.4 86.2 85.8 85.7 85.7 85.7 85.7 85.7 Oils and meals 109.3 103.0 81.0 81.3 81.8 82.4 83.0 83.6 86.4 Grains 120.9 98.1 84.1 84.2 84.5 84.9 85.2 85.6 87.3 Other food 98.0 102.3 94.8 93.3 92.0 90.7 89.6 88.5 83.2 Raw materials 90.0 86.8 79.2 79.3 79.6 79.9 80.3 80.8 83.0 Timber 96.7 99.0 91.0 91.2 91.7 92.1 92.6 93.1 95.3 Other Raw Materials 82.6 73.5 66.3 66.2 66.4 66.6 66.9 67.3 69.6 Fertilizers 107.2 94.9 90.4 88.2 86.4 84.6 82.9 81.2 73.1 Metals and minerals * 85.6 80.1 64.8 64.3 65.0 65.7 66.5 67.3 71.0 Base Metals ** 85.2 84.1 71.1 70.5 71.2 72.1 72.9 73.7 77.9 Precious Metals 108.5 95.5 87.0 84.4 82.1 79.9 77.8 75.8 66.2 Inflation indices, 2010=100 MUV index *** 106.1 105.9 105.7 107.6 109.4 111.2 112.9 114.8 124.7 % change per annum -1.4 -0.2 -0.2 1.9 1.7 1.6 1.6 1.6 1.7 US GDP deflator 105.4 106.9 108.5 110.7 113.0 115.3 117.6 120.0 132.6 % change per annum 1.5 1.3 1.6 2.0 2.0 2.0 2.0 2.0 2.0 Sources: See Appendix C. Notes: * Base metals plus iron ore; ** Includes aluminum, copper, lead, nickel, tin and zinc; *** MUV is the unit value index of manufacture exports. For other notes see Appendix C. Next update: January 2016. APPENDIX B Commodity Balances Energy Agriculture Metals • Coal • Cocoa • Aluminum • Crude oil • Coffee • Copper • Natural gas • Soybeans • Lead • Palm oil & Soybean oil • Nickel • Maize • Tin • Rice • Zinc • Wheat • Sugar • Industrial roundwood & Sawnwood • Wood-based panels & Woodpulp • Cotton • Natural rubber C O M M O D I T Y M A R K ETS E T S O U T L OO O O K | O C TO TOBER 2015 APPENDIX B 47 Coal Monthly Prices (US$/mt) Annual Prices (US$/mt) 200 150 120 150 90 100 Constant 2010 60 50 30 Nominal 0 0 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 1970 1980 1990 2000 2010 2020 Source: World Bank. Source: World Bank. Note: Last observation is September 2015. Note: 2015-25 are forecasts. 1981 1990 2000 2005 2010 2011 2012 2013 2014 Production (million metric tons oil equivalent) China 311 540 707 1,241 1,665 1,853 1,872 1,894 1,845 United States 463 566 570 580 551 556 518 501 508 Indonesia 0 7 47 94 169 217 237 276 282 Australia 65 109 167 206 241 233 250 268 281 India 63 92 132 162 218 216 229 229 244 Russian Federation n/a 178 117 140 151 159 170 169 171 South Africa 75 100 127 138 144 143 147 145 148 Colombia 3 14 25 38 48 56 58 56 58 Kazakhstan n/a 68 38 44 54 56 59 58 55 Poland 98 94 71 69 55 57 59 58 55 Germany 149 125 61 57 46 47 48 45 44 Canada 23 40 39 35 35 35 36 37 37 Ukraine n/a 84 42 41 40 44 45 44 32 Vietnam 3 3 7 19 25 26 24 23 23 Turkey 7 12 12 11 18 18 17 15 18 Czech Republic 43 37 25 24 21 22 21 18 17 United Kingdom 76 55 19 12 11 11 10 8 7 Mexico 2 3 5 6 7 9 7 8 7 Greece 3 7 8 9 7 8 8 7 6 Bulgaria 5 5 4 4 5 6 6 5 5 Thailand 0 4 5 6 5 6 5 5 5 Romania 8 9 6 7 6 7 6 5 4 Brazil 3 2 3 2 2 2 3 3 3 Others n/a 111 71 72 79 83 79 86 80 World 1,855 2,265 2,310 3,018 3,604 3,869 3,913 3,961 3,933 Consumption (million metric tons oil equivalent) China 303 525 700 1,318 1,741 1,896 1,922 1,961 1,962 United States 401 483 569 574 525 495 438 455 453 India 63 95 144 184 260 270 302 324 360 Japan 64 76 99 121 124 118 124 129 127 South Africa 51 67 75 80 93 90 88 89 89 Russian Federation n/a 182 106 95 91 94 98 91 85 Korea, Rep. 15 24 43 55 76 84 81 82 85 Germany 144 132 85 81 77 78 80 82 77 Indonesia 0 3 13 24 39 47 53 58 61 Poland 91 80 58 56 56 56 54 56 53 Australia 27 37 48 54 51 50 47 45 44 Taiwan, China 4 11 29 38 40 41 41 41 41 Turkey 7 16 23 22 31 34 36 32 36 Kazakhstan n/a 40 23 27 32 34 37 36 35 Ukraine n/a 75 39 38 38 41 43 41 33 Others n/a 386 316 354 337 348 352 347 341 World 1,834 2,233 2,369 3,122 3,611 3,777 3,799 3,867 3,882 Sources: BP Statistical Review of World Energy. Notes: n/a implies data not available. Production includes crude oil and natural gas liquids but excludes liquid fuels from other sources such as biomass and derivatives of coal and natural gas included in consumption. 48 APPENDIX B COMMODITY MARKETS OUTLOOK | OCTOBER 2015 Crude oil Monthly Prices (US$/bbl) Annual Prices (US$/bbl) 150 150 120 120 90 90 60 60 Constant 2010 30 30 Nominal 0 0 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 1970 1980 1990 2000 2010 2020 Source: World Bank. Source: World Bank. Note: Last observation is September 2015. Note: 2015-25 are forecasts. 1970 1980 1990 2000 2010 2011 2012 2013 2014 Production (thousand barrels per day) United States 11,297 10,170 8,914 7,732 7,556 7,861 8,904 10,069 11,644 Saudi Arabia 3,851 10,270 7,105 9,470 10,075 11,144 11,635 11,393 11,505 Russian Federation n/a n/a 10,342 6,583 10,366 10,516 10,640 10,777 10,838 Canada 1,473 1,764 1,968 2,703 3,332 3,515 3,740 3,977 4,292 China 616 2,122 2,778 3,257 4,077 4,074 4,155 4,216 4,246 United Arab Emirates 762 1,745 2,283 2,660 2,895 3,325 3,406 3,648 3,712 Iran, Islamic Rep. 3,848 1,479 3,270 3,852 4,352 4,373 3,742 3,525 3,614 Iraq 1,549 2,658 2,149 2,613 2,490 2,801 3,116 3,141 3,285 Kuwait 3,036 1,757 964 2,244 2,562 2,915 3,172 3,135 3,123 Mexico 487 2,129 2,941 3,456 2,959 2,940 2,911 2,875 2,784 Venezuela, RB 3,754 2,228 2,244 3,097 2,838 2,734 2,704 2,687 2,719 Nigeria 1,084 2,059 1,870 2,159 2,509 2,450 2,395 2,302 2,361 Brazil 167 188 650 1,271 2,137 2,193 2,149 2,114 2,346 Qatar 363 476 434 853 1,655 1,850 1,968 1,998 1,982 Norway 0 528 1,716 3,346 2,136 2,040 1,917 1,838 1,895 Angola 103 150 475 746 1,863 1,726 1,784 1,799 1,712 Kazakhstan n/a n/a 571 740 1,672 1,684 1,662 1,720 1,701 Algeria 1,052 1,139 1,347 1,549 1,689 1,642 1,537 1,485 1,525 Colombia 226 131 446 687 786 915 944 1,004 990 Oman 332 285 695 961 865 885 918 942 943 India 140 193 715 726 882 916 906 906 895 Indonesia 854 1,577 1,539 1,456 1,003 952 918 882 852 United Kingdom 4 1,676 1,933 2,714 1,361 1,116 949 867 850 Others n/a n/a 8,037 10,051 11,128 9,413 9,977 9,280 8,857 World 48,056 62,959 65,385 74,925 83,190 83,980 86,150 86,579 88,673 Consumption (thousand barrels per day) United States 14,710 17,062 16,988 19,701 19,180 18,882 18,490 18,961 19,035 China 556 1,690 2,320 4,766 9,266 9,791 10,231 10,664 11,056 Japan 3,876 4,905 5,240 5,542 4,442 4,439 4,688 4,521 4,298 India 391 644 1,213 2,261 3,319 3,488 3,685 3,727 3,846 Brazil 523 1,163 1,478 2,056 2,701 2,813 2,860 3,048 3,229 Russian Federation n/a n/a 5,042 2,542 2,895 3,096 3,137 3,179 3,196 Saudi Arabia 408 607 1,158 1,578 2,793 2,838 2,991 3,000 3,185 Korea, Rep. 162 476 1,042 2,263 2,370 2,394 2,458 2,455 2,456 Germany 2,774 3,020 2,689 2,746 2,445 2,369 2,356 2,408 2,371 Canada 1,472 1,898 1,747 2,043 2,316 2,404 2,372 2,383 2,371 Iran, Islamic Rep. 222 591 1,070 1,457 1,874 1,910 1,928 2,038 2,024 Mexico 412 1,048 1,580 1,965 2,014 2,043 2,063 2,020 1,941 Indonesia 138 396 653 1,137 1,458 1,567 1,599 1,615 1,641 France 1,867 2,221 1,895 1,994 1,763 1,730 1,676 1,664 1,615 United Kingdom 2,030 1,647 1,754 1,704 1,588 1,532 1,520 1,494 1,501 Others n/a n/a 20,868 23,112 27,442 27,679 27,789 28,065 28,320 World 45,348 61,233 66,737 76,868 87,867 88,974 89,846 91,243 92,086 Sources: BP Statistical Review of World Energy. Notes: n/a implies data not available. Production includes crude oil and natural gas liquids but excludes liquid fuels from other sources such as biomass and derivatives of coal and natural gas included in consumption. COMMODITY MARKETS OUTLOOK | OCTOBER 2015 APPENDIX B 49 Natural gas Monthly Prices (US$/mmbtu) Annual Constant Prices (US$/mmbtu) 20 20 Japan Japan 15 15 10 10 Europe Europe 5 5 US US 0 0 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 1980 1990 2000 2010 2020 Source: World Bank. Source: World Bank. Note: Last observation is September 2015. Note: 2015-25 are forecasts. 1970 1980 1990 2000 2010 2011 2012 2013 2014 Production (billion cubic metres) United States 595 549 504 543 604 649 681 689 728 Russian Federation n/a n/a 590 529 589 607 592 605 579 Qatar 1 5 6 24 126 161 170 176 177 Iran, Islamic Rep. 4 5 26 60 152 160 166 164 173 Canada 57 75 109 182 160 160 156 156 162 China 3 15 16 28 99 109 114 125 134 Norway 0 25 25 50 107 101 115 109 109 Saudi Arabia 2 10 34 50 88 92 99 100 108 Algeria 3 14 49 84 80 83 82 82 83 Indonesia 1 19 44 70 86 81 77 72 73 Turkmenistan n/a n/a 79 43 42 60 62 62 69 Malaysia 0 2 17 47 63 62 62 67 66 Mexico 11 26 27 38 58 58 57 58 58 United Arab Emirates 1 8 20 38 51 52 54 55 58 Uzbekistan n/a n/a 37 51 54 57 57 57 57 Netherlands 27 76 61 58 71 64 64 69 56 Australia 2 11 21 31 46 47 52 53 55 Egypt, Arab Rep. 0 2 8 21 61 61 61 56 49 Thailand 0 0 7 20 36 37 41 42 42 Trinidad & Tobago 2 3 5 16 45 43 43 43 42 Pakistan 3 7 12 22 42 42 44 43 42 Nigeria 0 2 4 12 37 41 43 36 39 United Kingdom 10 35 45 108 57 45 39 36 37 Others n/a n/a 236 293 448 443 450 454 464 World 992 1,435 1,983 2,416 3,203 3,316 3,380 3,409 3,461 Consumption (billion cubic metres) United States 599 563 543 661 682 693 723 740 759 Russian Federation n/a n/a 408 360 414 425 416 413 409 China 3 15 16 25 110 135 151 171 185 Iran, Islamic Rep. 3 5 24 63 153 162 162 159 170 Japan 3 24 48 72 95 105 114 114 112 Saudi Arabia 2 10 34 50 88 92 99 100 108 Canada 36 52 67 93 95 101 100 104 104 Mexico 10 23 28 41 72 77 80 85 86 Germany 15 57 60 79 83 75 78 82 71 United Arab Emirates 1 5 17 31 61 63 66 67 69 United Kingdom 11 45 52 97 94 78 74 73 67 Italy 14 25 43 65 76 71 69 64 57 Thailand 0 0 7 22 45 47 51 52 53 India 1 1 12 26 63 64 59 51 51 Uzbekistan n/a n/a 36 46 41 48 47 47 49 Others n/a n/a 565 686 1,021 1,030 1,057 1,058 1,042 World 980 1,436 1,958 2,418 3,194 3,265 3,346 3,381 3,393 Sources: BP Statistical Review of World Energy. Notes: n/a implies data not available. 50 APPENDIX B COMMODITY MARKETS OUTLOOK | OCTOBER 2015 Cocoa Monthly Prices (US$/kg) Annual Prices (US$/kg) 6 8 6 4 Constant 2010 4 2 2 Nominal 0 0 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 1970 1980 1990 2000 2010 2020 Source: World Bank. Source: World Bank. Note: Last observation is September 2015. Note: 2015-25 are forecasts. 1970/71 1980/81 1990/91 2000/01 2010/11 2011/12 2012/13 2013/14 2014/15 Production (thousand metric tons) Côte d’Ivoire 179.6 417.2 804.4 1,212.4 1,511.3 1,485.9 1,449.0 1,746.2 1,750.0 Ghana 406.0 258.0 293.4 395.0 1,024.6 879.3 835.5 896.9 695.7 Indonesia 1.7 12.4 150.0 385.0 440.0 440.0 410.0 375.0 350.0 Ecuador 71.6 86.7 111.1 88.9 160.5 198.0 191.5 234.0 250.0 Cameroon 112.0 117.1 115.0 133.0 228.5 206.5 225.0 211.0 230.0 Brazil 182.4 353.0 368.1 162.8 199.8 220.0 185.3 228.2 230.0 Nigeria 304.8 155.9 160.0 180.0 240.0 245.0 238.0 248.0 210.0 Peru 2.0 7.0 11.0 16.9 54.4 60.6 69.8 76.3 78.0 Dominican Republic 34.6 34.5 42.0 44.9 54.3 72.2 68.0 70.0 70.0 Colombia 21.0 38.3 52.0 37.1 35.2 42.6 48.4 48.8 51.0 Others 212.3 213.9 399.8 195.5 360.6 245.2 224.7 235.7 243.1 World 1,528.0 1,694.0 2,506.8 2,851.5 4,309.0 4,095.4 3,945.2 4,370.1 4,157.7 Grindings (thousand metric tons) Côte d’Ivoire 34.7 60.0 118.1 285.0 360.9 430.7 471.1 519.4 560.0 Netherlands 116.4 139.6 267.7 451.9 540.0 500.0 545.0 528.5 515.5 United States 278.7 185.6 267.9 444.7 401.3 386.9 429.2 446.0 406.0 Germany 150.7 180.0 294.2 226.6 438.5 407.0 402.0 412.0 404.0 Indonesia 1.2 10.0 32.0 83.0 190.0 270.0 257.0 322.0 312.0 Brazil 66.6 191.3 260.0 194.5 239.1 242.5 241.2 239.6 220.0 Others 782.7 799.5 1,084.8 1,355.4 1,768.2 1,734.7 1,794.3 1,836.1 1,713.6 World 1,431.0 1,566.0 2,324.7 3,041.1 3,938.1 3,971.8 4,139.7 4,303.5 4,131.1 Exports (thousand metric tons) Côte d’Ivoire 138.0 405.6 688.1 903.4 1,079.3 1,000.0 1,045.2 1,191.8 n/a Ghana 347.6 181.8 245.2 306.8 694.4 684.4 600.6 709.2 n/a Ecuador 46.5 19.0 55.9 57.2 135.7 166.1 165.4 196.8 n/a Nigeria 215.5 75.9 142.0 149.4 219.0 199.8 182.9 190.1 n/a Cameroon 74.6 96.0 96.3 101.6 204.1 172.7 186.4 160.0 n/a Indonesia 0.6 6.3 113.4 326.5 275.2 183.8 173.6 99.0 n/a Others 296.2 315.3 396.2 141.9 388.3 310.4 288.7 371.7 n/a World 1,118.9 1,099.8 1,737.1 1,986.7 2,995.9 2,717.1 2,642.9 2,918.5 n/a Imports (thousand metric tons) Netherlands 116.2 167.0 267.0 549.0 805.5 677.1 671.9 632.5 n/a United States 269.0 246.3 319.7 354.7 472.0 419.8 427.9 475.2 n/a Germany 154.7 187.4 299.9 228.2 433.8 376.6 272.6 318.2 n/a Malaysia 0.9 n/a 0.9 109.6 320.4 356.3 305.4 315.4 n/a Belgium 18.4 28.0 49.7 101.3 193.8 192.0 224.6 258.0 n/a France 41.7 58.8 74.1 157.2 149.2 133.2 114.0 141.3 n/a Spain 33.8 36.9 45.4 48.8 87.9 90.9 99.0 107.5 n/a Italy 41.2 31.7 56.2 72.2 85.7 88.2 87.7 89.5 n/a Turkey 1.2 2.0 5.9 39.1 71.1 84.6 78.3 87.8 n/a Singapore 2.6 21.8 126.6 67.0 87.8 85.5 79.9 80.7 n/a Others 459.7 418.2 516.0 682.3 649.4 682.5 635.0 659.3 n/a World 1,139.4 1,198.1 1,761.4 2,409.5 3,356.6 3,186.8 2,996.2 3,165.5 n/a Sources: Quarterly Bulletin of Cocoa Statistics. Notes: n/a implies data not available. 1970/71 data are average of 1968-1972. COMMODITY MARKETS OUTLOOK | OCTOBER 2015 APPENDIX B 51 Coffee Monthly Prices (US$/kg) Annual Constant Prices (US$/kg) 8 12 6 9 Arabica 4 6 Arabica 2 3 Robusta Robusta 0 0 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 1970 1980 1990 2000 2010 2020 Source: World Bank. Source: World Bank. Note: Last observation is September 2015. Note: 2015-25 are forecasts. 1970/71 1980/81 1990/91 2000/01 2010/11 2012/13 2013/14 2014/15 2015/16 Production (thousand 60kg bags) Brazil 11,000 21,500 31,000 34,100 54,500 57,600 56,000 51,200 52,400 Vietnam 56 77 1,200 15,333 19,415 26,500 29,833 28,167 28,600 Colombia 8,000 13,500 14,500 10,500 8,525 9,927 12,075 12,500 13,000 Indonesia 2,330 5,365 7,480 6,495 9,325 10,500 9,500 8,800 11,000 Ethiopia 2,589 3,264 3,500 2,768 6,125 6,325 6,345 6,475 6,500 Honduras 545 1,265 1,685 2,821 3,975 4,725 4,400 5,200 5,900 India 1,914 1,977 2,970 5,020 5,035 5,303 5,075 5,100 5,200 Uganda 2,667 2,133 2,700 3,097 3,212 3,600 3,850 3,550 3,800 Peru 1,114 1,170 1,170 2,824 4,100 4,300 4,250 2,800 3,500 Mexico 3,200 3,862 4,550 4,800 4,000 4,650 3,950 3,300 3,300 Guatemala 1,965 2,702 3,282 4,564 3,960 4,010 3,415 3,215 3,215 Nicaragua 641 971 460 1,610 1,740 1,925 1,900 2,050 2,150 Malaysia 66 88 75 700 1,100 1,400 1,500 1,750 1,800 Costa Rica 1,295 2,140 2,565 2,502 1,575 1,675 1,450 1,400 1,350 Côte d’Ivoire 3,996 6,090 3,300 5,100 1,600 1,750 1,675 1,400 1,325 Tanzania, United Rep. 909 1,060 763 809 1,050 1,180 800 1,150 1,250 Thailand 19 201 785 1,692 850 850 850 900 900 Kenya 999 1,568 1,455 864 710 660 850 900 900 Papua New Guinea 401 880 964 1,041 865 825 855 810 850 Others 15,496 16,361 15,777 10,577 8,755 7,063 5,735 5,596 5,711 World 59,202 86,174 100,181 117,217 140,417 154,768 154,308 146,263 152,651 Consumption (thousand 60kg bags) European Union n/a n/a n/a n/a 41,350 43,270 41,405 43,875 43,900 United States n/a n/a n/a n/a 22,383 23,027 23,811 23,974 23,700 Brazil 8,890 7,975 9,000 13,100 19,420 20,110 20,210 20,330 20,580 Japan n/a n/a n/a n/a 7,015 7,505 7,750 7,775 7,790 Canada n/a n/a n/a n/a 4,245 4,230 4,605 4,650 4,975 Russian Federation n/a n/a n/a n/a 4,355 4,260 4,365 4,565 4,940 Philippines 496 432 810 900 2,825 4,405 3,595 3,800 3,900 Indonesia 888 1,228 1,295 1,335 1,690 2,670 2,790 2,990 3,150 Ethiopia 1,170 1,600 1,900 1,667 2,860 3,055 3,120 2,985 2,972 Korea, Rep. n/a n/a n/a n/a 1,910 1,825 2,160 2,240 2,350 Algeria n/a n/a n/a n/a 1,815 1,945 2,300 2,130 2,280 Mexico 1,512 1,500 1,400 978 2,470 2,030 2,310 1,940 2,273 Vietnam 31 35 100 417 1,337 1,825 2,008 2,080 2,160 China n/a n/a n/a n/a 965 1,560 1,705 1,660 1,765 Australia n/a n/a n/a n/a 1,445 1,660 1,615 1,595 1,680 Thailand 93 118 160 500 683 1,130 1,260 1,545 1,450 Switzerland n/a n/a n/a n/a 1,570 1,500 1,410 1,425 1,400 Colombia 1,349 1,825 1,615 1,530 1,120 1,200 1,300 1,405 1,300 India 665 887 1,224 959 1,231 1,100 1,200 1,200 1,250 Others n/a n/a n/a n/a 13,846 14,224 13,843 13,809 13,869 World n/a n/a n/a n/a 134,535 142,531 142,762 145,973 147,684 Sources: U.S. Department of Agriculture (October 2015 update). Notes: n/a implies data not available. 52 APPENDIX B COMMODITY MARKETS OUTLOOK | OCTOBER 2015 Soybeans Monthly Prices (US$/mt) Annual Prices (US$/mt) 800 1000 800 600 600 Constant 2010 400 400 200 Nominal 200 0 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 1970 1980 1990 2000 2010 2020 Source: World Bank. Source: World Bank. Note: Last observation is September 2015. Note: 2015-25 are forecasts. 1970/71 1980/81 1990/91 2000/01 2010/11 2012/13 2013/14 2014/15 2015/16 Production (million metric tons) United States 30.7 48.9 52.4 75.1 90.7 82.8 91.4 106.9 105.8 Brazil 0.0 15.2 15.8 39.5 75.3 82.0 86.7 96.2 100.0 Argentina 0.0 3.5 11.5 27.8 49.0 49.3 53.5 60.8 57.0 China 8.7 7.9 11.0 15.4 15.1 13.1 12.2 12.4 11.5 India 0.0 0.4 2.6 5.3 10.1 12.2 9.5 9.0 11.0 Paraguay 0.1 0.6 1.3 3.5 7.1 8.2 8.2 8.1 8.8 Canada 0.3 0.7 1.3 2.7 4.4 5.1 5.4 6.0 6.0 Ukraine n/a n/a 0.1 0.1 1.7 2.4 2.8 3.9 3.6 Uruguay 0.0 0.0 0.0 0.0 1.9 3.7 3.3 3.5 3.5 Bolivia 0.0 0.0 0.4 1.2 2.3 2.6 2.4 2.7 3.1 Others 2.4 3.5 7.9 5.4 6.8 7.5 7.8 9.5 10.2 World 42.1 80.9 104.3 175.8 264.3 268.8 283.1 318.9 320.5 Crushings (million metric tons) China 1.5 1.5 3.9 18.9 55.0 65.0 68.9 74.2 79.5 United States 20.7 27.8 32.3 44.6 44.9 46.0 47.2 51.0 51.2 Argentina 0.0 0.9 7.0 17.3 37.6 33.6 36.2 40.0 41.5 Brazil 0.0 13.8 14.2 22.7 36.3 35.2 36.9 39.5 39.6 European Union 7.3 14.1 13.0 16.8 12.4 13.2 13.4 14.0 14.7 India 0.0 0.4 2.4 4.5 9.3 9.9 8.3 7.1 8.7 Mexico 0.3 1.5 1.9 4.5 3.6 3.7 4.0 4.3 4.4 Russian Federation n/a n/a 0.4 0.4 2.2 2.4 3.3 3.9 4.1 Paraguay 0.1 0.0 0.3 0.9 1.6 3.0 3.4 3.7 4.1 Bolivia 0.0 0.0 0.3 0.9 1.8 2.2 2.3 2.3 2.5 Others 12.7 23.8 24.1 15.0 16.5 16.2 17.3 20.6 22.3 World 42.5 83.9 99.7 146.4 221.2 230.2 241.1 260.5 272.4 Exports (million metric tons) Brazil 0.0 1.8 2.5 15.5 30.0 41.9 46.8 51.1 56.5 United States 11.8 19.7 15.2 27.1 41.0 36.1 44.6 50.2 45.6 Argentina 0.0 2.7 4.5 7.3 9.2 7.7 7.8 9.6 9.8 Paraguay 0.0 0.6 1.0 2.5 5.2 5.5 4.8 4.4 4.6 Canada 0.0 0.1 0.2 0.7 2.9 3.5 3.5 3.9 3.9 Others 0.5 0.4 2.1 0.7 3.4 6.1 5.1 6.9 6.5 World 12.3 25.3 25.4 53.8 91.7 100.8 112.6 126.1 126.8 Imports (million metric tons) China 0.0 0.5 0.0 13.2 52.3 59.9 70.4 77.0 79.0 European Union 7.4 13.6 13.2 17.7 12.5 12.5 13.0 13.6 13.6 Mexico 0.1 1.4 1.4 4.4 3.5 3.4 3.8 4.0 4.1 Japan 3.2 4.2 4.4 4.8 2.9 2.8 2.9 3.0 2.9 Taiwan, China 0.0 1.1 2.2 2.3 2.5 2.3 2.3 2.4 2.4 Turkey 0.0 0.0 0.0 0.4 1.4 1.2 1.6 2.1 2.3 Indonesia 0.0 0.4 0.5 1.1 1.9 1.8 2.2 2.1 2.3 Others 8.8 18.7 17.1 9.2 11.9 12.0 15.0 16.1 17.4 World 19.5 39.8 38.8 53.1 88.8 95.9 111.3 120.2 123.9 Sources: U.S. Department of Agriculture. Notes: The trade year is January-December of the later year of the split. For example, 1970/71 refers to calendar year 1971. COMMODITY MARKETS OUTLOOK | OCTOBER 2015 APPENDIX B 53 Palm oil and Soybean oil Monthly Prices (US$/mt) Annual Constant Prices (US$/mt) 1,800 2200 Soybean oil 1800 1,400 1400 Soybean oil 1,000 1000 600 Palm oil 600 Palm oil 200 200 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 1970 1980 1990 2000 2010 2020 Source: World Bank. Source: World Bank. Note: Last observation is September 2015. Note: 2015-25 are forecasts. 1970/71 1980/81 1990/91 2000/01 2010/11 2012/13 2013/14 2014/15 2015/16 Palm oil: production (thousand metric tons) Indonesia 248 752 2,650 8,300 23,600 28,500 30,500 33,000 35,000 Malaysia 589 2,692 6,031 11,937 18,211 19,321 20,161 19,800 21,000 Thailand 0 19 200 580 1,832 2,135 2,000 1,800 2,200 Colombia 36 80 252 520 753 974 1,041 1,110 1,130 Nigeria 432 520 600 730 971 970 970 970 970 Ecuador 5 44 150 222 380 540 565 575 600 Papua New Guinea 0 45 145 336 488 520 500 500 520 Ghana 21 19 24 108 426 471 493 495 500 Honduras 0 18 64 148 320 425 450 470 490 Guatemala 0 0 6 124 231 365 420 440 460 Others 591 707 912 1,234 2,027 2,201 2,289 2,295 2,325 World 1,922 4,896 11,034 24,239 49,239 56,422 59,389 61,455 65,195 Palm oil: consumption (thousand metric tons) India 1 431 259 4,100 7,090 8,250 8,384 9,200 9,950 Indonesia 29 561 1,330 3,263 6,414 7,852 8,900 7,620 9,220 European Union 595 607 1,509 2,790 5,110 6,560 6,790 6,700 6,850 China 53 16 1,194 2,028 5,797 6,389 5,669 5,580 5,750 Malaysia 8 420 914 1,571 2,204 2,451 2,868 3,060 3,370 Pakistan 1 231 800 1,245 2,077 2,285 2,490 2,690 2,945 Others 1,707 3,104 6,658 8,618 19,126 21,364 22,741 23,945 25,447 World 2,394 5,370 12,664 23,615 47,818 55,151 57,842 58,795 63,532 Soybean oil: production (thousand metric tons) China 181 183 599 3,240 9,840 11,626 12,335 13,280 14,230 United States 3,749 5,112 6,082 8,355 8,568 8,990 9,131 9,720 9,859 Argentina 0 158 1,179 3,190 7,181 6,364 6,785 7,630 7,860 Brazil n/a 2,601 2,669 4,333 6,970 6,760 7,070 7,580 7,590 European Union 1,260 2,478 2,317 3,033 2,362 2,501 2,553 2,660 2,795 India 2 69 425 805 1,646 1,752 1,478 1,255 1,540 Paraguay 10 6 56 174 300 564 640 697 783 Mexico 52 255 330 795 648 653 720 765 780 Others 2,205 4,191 4,425 2,888 3,841 3,884 4,271 4,982 5,359 World 7,459 15,053 18,082 26,813 41,356 43,094 44,983 48,569 50,796 Soybean oil: consumption (thousand metric tons) China 179 256 1,055 3,542 11,409 12,545 13,657 14,193 15,237 United States 2,854 4,134 5,506 7,401 7,619 8,476 8,599 8,709 8,868 Brazil n/a 1,490 2,075 2,932 5,205 5,534 5,705 6,205 6,275 India 79 708 445 2,080 2,610 2,950 3,300 3,900 4,400 Argentina 0 56 101 247 2,520 2,275 2,729 2,651 2,660 European Union 1,170 1,926 1,879 2,186 2,530 1,908 1,970 2,000 2,000 Mexico 52 305 404 863 840 860 890 1,001 1,010 Iran, Islamic Rep. 95 343 431 873 646 630 635 665 695 Others 2,699 5,120 5,417 6,335 7,358 7,422 7,799 8,487 8,856 World 7,128 14,338 17,313 26,459 40,737 42,600 45,284 47,811 50,001 Sources: U.S. Department of Agriculture (October 2015 update). Notes: The trade year is January-December of the later year of the split. For example, 1970/71 refers to calendar year 1971. 54 APPENDIX B COMMODITY MARKETS OUTLOOK | OCTOBER 2015 Maize Monthly Prices (US$/mt) Annual Prices (US$/mt) 400 400 300 300 Constant 2010 200 200 100 100 Nominal 0 0 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 1970 1980 1990 2000 2010 2020 Source: World Bank. Source: World Bank. Note: Last observation is September 2015. Note: 2015-25 are forecasts. 1970/71 1980/81 1990/91 2000/01 2010/11 2012/13 2013/14 2014/15 2015/16 Production (million metric tons) United States 105.5 168.6 201.5 251.9 315.6 273.2 351.3 361.1 344.3 China 33.0 62.6 96.8 106.0 177.2 205.6 218.5 215.7 225.0 Brazil 14.1 22.6 24.3 41.5 57.4 81.5 80.0 85.0 80.0 European Union 29.8 42.5 36.6 51.9 58.3 58.9 64.6 75.7 58.0 Ukraine n/a n/a 4.7 3.8 11.9 20.9 30.9 28.5 25.0 Argentina 9.9 12.9 7.7 15.4 25.2 27.0 26.0 26.5 24.0 Mexico 8.9 10.4 14.1 17.9 21.1 21.6 22.9 25.0 23.5 India 7.5 7.0 9.0 12.0 21.7 22.3 24.3 23.7 23.0 South Africa 8.6 14.9 8.6 8.0 10.9 12.4 14.9 10.8 13.5 Russian Federation n/a n/a 2.5 1.5 3.1 8.2 11.6 11.3 13.5 Canada n/a n/a 7.1 7.0 12.0 13.1 14.2 11.5 12.3 Indonesia 2.8 4.0 5.0 5.9 6.8 8.5 9.1 9.4 9.6 Philippines 2.0 3.1 5.1 4.5 7.3 7.3 7.5 7.7 7.8 Others 73.1 96.9 95.6 64.4 107.0 109.9 115.6 116.9 113.1 World 295.3 445.5 518.6 591.8 835.5 870.3 991.4 1,008.7 972.6 Stocks (million metric tons) China 8.9 42.8 82.8 102.4 49.4 67.6 77.3 81.7 90.6 United States 16.8 35.4 38.6 48.2 28.6 20.9 31.3 44.0 39.7 Brazil 2.0 1.3 0.8 2.7 10.3 14.2 19.0 18.6 15.2 European Union 2.3 4.8 3.7 3.2 5.2 5.1 6.8 8.6 5.1 Iran, Islamic Rep. n/a 0.1 0.0 0.9 2.8 3.2 4.5 5.8 4.7 Others 8.4 22.9 19.1 17.8 30.7 27.0 37.0 37.4 32.6 World 38.4 107.4 145.1 175.3 127.1 137.9 175.9 196.0 187.8 Exports (million metric tons) United States 12.9 60.7 43.9 49.3 46.5 18.5 48.8 47.4 47.0 Brazil 0.9 0.0 0.0 6.3 8.4 24.9 21.0 29.0 25.0 Ukraine n/a n/a 0.4 0.4 5.0 12.7 20.0 19.8 17.0 Argentina 6.4 9.1 4.0 9.7 16.3 18.7 17.1 17.0 14.5 Russian Federation n/a n/a n/a n/a 0.0 1.9 4.2 2.9 4.0 Paraguay 0.0 0.0 0.0 0.6 1.6 2.8 2.4 2.7 2.5 India 0.0 0.0 0.0 0.1 3.5 4.7 3.9 1.1 2.0 Others 11.9 10.5 9.8 10.4 9.9 10.8 13.8 13.2 9.9 World 32.2 80.3 58.0 76.7 91.3 95.1 131.1 133.0 121.9 Imports (million metric tons) European Union 18.9 26.6 5.7 3.7 7.4 11.4 15.9 8.6 16.0 Japan 5.2 14.0 16.3 16.3 15.6 14.4 15.1 14.7 14.8 Mexico 0.1 3.8 1.9 6.0 8.3 5.7 11.0 11.0 10.5 Korea, Rep. 0.3 2.4 5.6 8.7 8.1 8.2 10.4 10.0 10.0 Egypt, Arab Rep. 0.1 1.0 1.9 5.3 5.8 5.1 8.7 7.5 8.0 Colombia 0.0 0.1 0.0 1.9 3.5 3.3 4.4 4.4 4.5 Taiwan, China 0.6 2.7 5.3 4.9 4.1 4.2 4.2 4.2 4.3 Others 22.1 50.3 27.4 28.0 39.7 47.6 54.2 60.8 55.2 World 47.3 100.9 64.3 74.9 92.6 99.8 123.9 121.2 123.3 Sources: U.S. Department of Agriculture (October 2015 update). Notes: n/a implies data not available. The trade year is January-December of the later year of the split. For example, 1970/71 refers to calendar year 1971. COMMODITY MARKETS OUTLOOK | OCTOBER 2015 APPENDIX B 55 Rice Monthly Prices (US$/mt) Annual Prices (US$/mt) 1000 1500 800 1200 600 900 Constant 2010 400 600 200 300 Nominal 0 0 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 1970 1980 1990 2000 2010 2020 Source: World Bank. Source: World Bank. Note: Last observation is September 2015. Note: 2015-25 are forecasts. 1970/71 1980/81 1990/91 2000/01 2010/11 2012/13 2013/14 2014/15 2015/16 Production (million metric tons) China 77.0 97.9 132.5 131.5 137.0 143.0 142.5 144.5 145.5 India 42.2 53.6 74.3 85.0 96.0 105.2 106.6 104.8 103.5 Indonesia 13.1 22.3 29.0 33.0 35.5 36.6 36.3 36.3 36.3 Bangladesh 11.1 13.9 17.9 25.1 31.7 33.8 34.4 34.5 35.0 Vietnam 6.4 7.7 12.4 20.5 26.4 27.5 28.2 28.1 28.2 Thailand 9.0 11.5 11.3 17.1 20.3 20.2 20.5 18.8 16.4 Burma 5.1 6.7 7.9 10.8 11.1 11.7 12.0 12.6 12.2 Philippines 3.4 5.0 6.4 8.1 10.5 11.4 11.9 11.9 12.0 Brazil 3.7 5.9 6.8 6.9 9.3 8.0 8.3 8.5 8.0 Japan 11.5 8.9 9.6 8.6 7.8 7.9 7.9 7.8 7.9 Pakistan 2.2 3.1 3.3 4.8 5.0 5.8 6.7 6.9 6.9 United States 2.8 4.8 5.1 5.9 7.6 6.3 6.1 7.1 6.0 Cambodia 2.5 1.1 1.6 2.5 4.2 4.7 4.7 4.7 4.7 Others 22.9 27.6 33.3 39.4 48.3 50.5 52.3 52.4 51.5 World 213.0 269.9 351.4 399.3 450.6 472.8 478.4 478.8 474.0 Stocks (million metric tons) China 11.0 28.0 94.0 93.0 42.6 46.8 46.8 46.8 45.6 India 6.0 6.5 14.5 25.1 23.5 25.4 22.8 16.6 11.9 Thailand 1.2 2.0 0.9 2.2 5.6 12.8 11.7 10.1 5.3 Indonesia 0.6 3.0 2.1 4.6 7.1 6.5 5.5 4.5 3.4 Japan 6.1 4.0 1.0 2.6 2.9 2.9 3.1 3.2 3.4 Philippines 0.6 1.5 1.8 2.8 2.5 1.5 1.7 2.1 2.6 Others 3.4 7.6 12.4 16.4 16.0 14.9 16.0 18.5 16.2 World 28.8 52.6 126.7 146.7 100.1 110.8 107.6 101.8 88.3 Exports (million metric tons) Thailand 1.6 3.0 4.0 7.5 10.6 6.7 11.0 9.0 9.5 India 0.0 0.9 0.7 1.7 2.8 10.9 10.1 11.7 9.0 Vietnam 0.0 0.0 1.0 3.5 7.0 6.7 6.3 6.2 7.0 Pakistan 0.2 1.2 1.3 2.4 3.4 3.6 3.2 4.0 4.5 United States 1.5 3.1 2.3 2.6 3.5 3.4 3.0 3.2 3.1 Others 5.2 4.2 2.8 6.2 7.7 8.1 8.1 8.7 8.4 World 8.5 12.4 12.1 24.0 35.1 39.3 41.7 42.8 41.5 Imports (million metric tons) China 0.0 0.2 0.1 0.3 0.5 3.1 4.0 4.3 4.7 Nigeria 0.0 0.4 0.2 1.3 2.4 2.8 2.8 4.0 3.0 Philippines 0.0 0.0 0.4 1.4 1.3 1.4 1.2 1.7 1.7 Iran 0.1 0.6 0.6 0.8 2.0 2.1 1.6 1.5 1.6 Saudi Arabia 0.2 0.4 0.5 1.0 1.1 1.3 1.4 1.5 1.6 European Union 0.9 0.5 0.7 1.2 1.4 1.4 1.5 1.6 1.6 Indonesia 0.5 0.5 0.2 1.5 3.1 0.7 1.2 1.3 1.3 Iran, Islamic Rep. 0.1 0.4 0.3 1.0 1.2 1.4 1.0 1.1 1.2 Others 6.8 8.8 8.3 13.7 20.0 22.4 23.6 23.7 22.8 World 8.6 11.8 11.3 22.1 33.0 36.6 38.4 40.7 39.4 Sources: U.S. Department of Agriculture (October 2015 update). Notes: The trade year is January-December of the later year of the split. For example, 1970/71 refers to calendar year 1971. 56 APPENDIX B COMMODITY MARKETS OUTLOOK | OCTOBER 2015 Wheat Monthly Prices (US$/mt) Annual Prices (US$/mt) 500 500 400 400 300 300 Constant 2010 200 200 100 Nominal 100 0 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 1970 1980 1990 2000 2010 2020 Source: World Bank. Source: World Bank. Note: Last observation is September 2015. Note: 2015-25 are forecasts. 1970/71 1980/81 1990/91 2000/01 2010/11 2012/13 2013/14 2014/15 2015/16 Production (million metric tons) European Union 62.5 93.3 125.0 132.7 136.7 133.9 144.4 156.5 155.3 China 29.2 55.2 98.2 99.6 115.2 121.0 121.9 126.2 130.0 India 20.1 31.8 49.9 76.4 80.8 94.9 93.5 95.9 88.9 Russian Federation n/a n/a 49.6 34.5 41.5 37.7 52.1 59.1 61.0 United States 36.8 64.8 74.3 60.6 58.9 61.3 58.1 55.1 55.8 Ukraine n/a n/a 30.4 10.2 16.8 15.8 22.3 24.8 27.0 Australia 7.9 10.9 15.1 22.1 27.4 22.9 25.3 23.7 27.0 Canada 9.0 19.3 32.1 26.5 23.3 27.2 37.5 29.4 26.0 Pakistan 7.3 10.9 14.4 21.1 23.9 23.3 24.0 25.5 25.0 Turkey 8.0 13.0 16.0 18.0 17.0 16.0 18.8 15.3 19.5 Kazakhstan n/a n/a 16.2 9.1 9.6 9.8 13.9 13.0 14.0 Iran, Islamic Rep. 3.8 5.9 8.0 8.1 13.5 13.8 14.5 13.0 14.0 Argentina 4.9 7.8 11.0 16.3 17.2 9.3 10.5 12.5 10.5 Egypt, Arab Rep. 1.5 1.8 4.3 6.4 7.2 8.5 8.3 8.3 8.4 Others 178.0 214.5 169.4 41.7 60.9 63.3 70.0 67.3 70.4 World 369.1 529.2 713.8 583.3 649.9 658.7 715.1 725.5 732.8 Stocks (million metric tons) China 7.2 31.7 49.9 91.9 59.1 54.0 65.3 74.6 89.6 United States 22.4 26.9 23.6 23.8 23.5 19.5 16.1 20.5 23.4 European Union 8.6 13.0 22.5 17.9 11.9 10.7 9.9 13.1 15.5 India 5.0 4.0 5.8 21.5 15.4 24.2 17.8 17.2 11.9 Iran, Islamic Rep. 0.7 1.2 3.2 2.9 2.9 5.1 7.2 7.8 7.3 Russian Federation n/a n/a 16.4 1.5 13.7 5.0 5.2 6.3 7.1 Others 45.2 48.9 72.3 47.1 72.6 58.7 72.3 72.7 73.7 World 89.1 125.6 193.8 206.6 199.1 177.2 193.8 212.1 228.5 Exports (million metric tons) European Union 6.7 17.5 23.8 15.7 23.1 22.8 32.0 35.4 33.0 Russian Federation n/a n/a 1.2 0.7 4.0 11.3 18.6 22.8 23.5 United States 20.2 41.2 29.1 28.9 35.1 27.5 32.0 23.2 23.1 Canada 11.8 16.3 21.7 17.3 16.6 19.0 23.3 24.1 19.0 Australia 9.1 9.6 11.8 15.9 18.6 18.6 18.6 16.7 19.0 Ukraine n/a n/a 2.0 0.1 4.3 7.2 9.8 11.3 15.0 Others 15.3 23.1 38.0 22.6 31.0 31.0 31.7 31.0 27.9 World 63.2 107.6 127.7 101.3 132.7 137.4 165.9 164.5 160.6 Imports (million metric tons) Egypt, Arab Rep. 2.8 5.4 5.7 6.1 10.6 8.3 10.2 11.1 11.5 Indonesia 0.5 1.2 2.0 4.1 6.6 7.1 7.4 7.5 7.8 Algeria 0.6 2.3 4.4 5.6 6.5 6.5 7.5 7.3 7.7 Brazil 1.7 3.9 4.4 7.2 6.7 7.4 7.1 5.6 6.7 European Union 19.6 10.4 3.7 3.5 4.6 5.3 4.0 6.0 6.0 Japan 4.8 5.8 5.6 5.9 5.9 6.6 6.1 5.9 5.8 Others 45.3 70.8 76.9 67.1 91.1 104.2 116.2 115.7 112.3 World 75.4 99.9 102.7 99.4 132.0 145.4 158.4 159.0 157.8 Sources: U.S. Department of Agriculture (October 2015 update). Notes: n/a implies data not available. The trade year is January-December of the later year of the split. For example, 1970/71 refers to calendar year 1971. COMMODITY MARKETS OUTLOOK | OCTOBER 2015 APPENDIX B 57 Sugar Monthly Prices (US$/kg) Annual Prices (US$/kg) 0.8 2.0 0.6 1.5 Constant 2010 0.4 1.0 0.2 0.5 Nominal 0.0 0.0 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 1970 1980 1990 2000 2010 2020 Source: World Bank. Source: World Bank. Note: Last observation is September 2015. Note: 2015-25 are forecasts. 1970/71 1980/81 1990/91 2000/01 2010/11 2012/13 2013/14 2014/15 2015/16 Production (million metric tons) Brazil 5.1 8.5 7.9 17.1 38.4 38.6 37.8 35.9 36.0 India 4.5 6.5 13.7 20.5 26.6 27.3 26.6 29.5 29.1 European Union 15.4 19.0 23.2 22.1 15.9 16.7 16.0 16.8 15.5 Thailand 0.5 1.7 4.0 5.1 9.7 10.0 11.3 11.0 11.4 China 2.1 3.2 6.8 6.8 11.2 14.0 14.3 11.0 10.8 United States 5.6 5.6 6.3 8.0 7.1 8.1 7.7 7.7 7.7 Mexico 2.5 2.5 3.9 5.2 5.5 7.4 6.4 6.4 6.4 Pakistan 0.0 0.9 2.1 2.6 3.9 5.0 5.6 5.2 5.4 Australia 2.7 3.3 3.6 4.2 3.7 4.3 4.4 4.7 4.8 Russian Federation n/a n/a 2.6 1.6 3.0 5.0 4.4 4.4 4.5 Guatemala 0.2 0.5 1.0 1.6 2.0 2.8 2.9 2.9 3.0 Philippines 2.1 2.4 1.7 1.8 2.5 2.4 2.5 2.5 2.5 Others 45.1 53.3 60.9 56.3 32.7 36.0 35.7 36.5 36.4 World 85.7 107.6 137.6 152.9 162.2 177.6 175.6 174.3 173.4 Stocks (million metric tons) India 1.8 1.1 3.6 12.0 6.3 9.4 8.2 10.2 10.0 Thailand 0.0 0.2 0.2 0.6 3.0 3.6 5.3 5.7 6.2 China 0.3 0.7 1.4 1.0 1.6 6.8 8.8 7.2 5.8 United States 2.9 1.4 1.4 2.0 1.3 2.0 1.6 1.5 1.4 European Union 6.3 3.5 3.7 5.7 2.0 3.8 3.1 2.6 1.0 Pakistan 0.0 0.1 0.3 0.4 1.5 0.9 1.3 1.2 1.0 Others 15.1 14.2 15.6 23.9 13.9 16.2 15.7 15.9 15.2 World 26.5 21.2 26.1 45.6 29.5 42.6 44.0 44.3 40.5 Exports (million metric tons) Brazil 1.2 2.3 1.3 7.7 25.8 27.7 26.2 24.6 24.4 Thailand 0.2 1.0 2.7 3.4 6.6 6.7 7.2 8.0 8.3 Australia 1.8 2.6 2.8 3.1 2.8 3.1 3.2 3.6 3.7 Guatemala 0.1 0.2 0.7 1.2 1.5 1.9 2.1 2.2 2.4 India 0.3 0.1 0.2 1.4 3.9 1.0 2.8 1.5 2.2 Mexico 0.6 0.0 0.3 0.2 1.6 2.1 2.7 1.6 1.9 Others 17.1 22.2 25.9 21.5 11.6 12.7 13.3 12.7 13.0 World 21.3 28.4 33.9 38.3 53.8 55.1 57.5 54.2 55.8 Imports (million metric tons) China 0.4 1.1 1.1 1.1 2.1 3.8 4.3 4.8 5.5 United States 4.8 4.4 2.6 1.4 3.4 2.9 3.4 3.1 3.5 Indonesia 0.1 0.6 0.2 1.6 3.1 3.6 3.6 3.1 3.2 European Union 5.4 3.8 4.1 3.3 3.8 3.8 3.3 3.0 3.2 United Arab Emirates 0.0 0.1 0.1 1.1 2.0 2.6 2.1 2.4 2.5 Malaysia 0.0 0.5 0.9 1.3 1.8 2.1 2.0 2.1 2.1 Bangladesh 0.0 0.0 0.0 0.8 1.5 1.5 2.1 2.1 2.1 Korea, Rep. 0.0 0.8 1.2 1.6 1.7 1.8 1.9 1.9 1.9 Others 12.0 20.8 25.9 31.4 29.7 28.9 28.6 29.1 28.9 World 22.7 32.0 36.2 43.6 49.1 51.0 51.3 51.6 52.9 Sources: U.S. Department of Agriculture (October 2015 update). Notes: The trade year is January-December of the later year of the split. For example, 1970/71 refers to calendar year 1971. 58 APPENDIX B COMMODITY MARKETS OUTLOOK | OCTOBER 2015 Industrial roundwood and Sawnwood Monthly Prices (US$/mt) Annual Constant Prices (US$/mt) 1,200 1200 Sawnwood, constant 2010 1000 1,000 800 800 600 Sawnwood 400 Sawnwood, nominal 600 200 400 0 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 1970 1980 1990 2000 2010 2020 Source: World Bank. Source: World Bank. Note: Last observation is September 2015. Note: 2015-25 are forecasts. 1970 1980 1990 2000 2010 2011 2012 2013 2014 Industrial roundwood: production (million cubic meters) United States 312.7 327.1 427.2 420.6 336.1 354.7 347.1 354.9 356.8 Russian Federation n/a n/a n/a 145.6 161.6 175.6 177.5 180.4 188.3 China 42.2 79.2 91.2 96.0 161.8 160.9 159.6 168.7 168.7 Canada 117.5 150.8 156.0 198.9 138.8 146.7 146.7 147.8 149.9 Brazil 23.9 61.7 74.3 103.0 128.4 140.0 146.8 144.5 144.5 Sweden 56.7 44.8 49.1 57.4 66.3 66.0 63.6 63.7 64.2 Indonesia 12.7 30.9 38.4 48.8 54.1 60.7 62.6 62.6 62.6 India 12.7 19.7 35.1 41.2 48.8 49.5 49.5 49.5 49.5 Others 698.2 731.8 838.1 572.9 606.2 614.4 615.1 627.9 643.5 World 1,276.4 1,446.0 1,709.2 1,684.4 1,702.1 1,768.6 1,768.5 1,799.9 1,828.1 Industrial roundwood: imports (million cubic meters) China 2.0 8.3 7.2 15.7 35.4 43.3 38.7 45.9 53.6 Germany 5.2 3.8 2.0 3.5 7.7 7.0 6.6 8.4 8.3 Sweden 0.6 3.1 2.0 11.7 6.3 6.7 6.9 7.5 8.1 India 0.0 0.0 1.3 2.2 5.3 6.3 6.5 6.5 7.4 Austria 2.0 3.7 4.4 8.5 8.0 7.4 7.3 8.2 7.3 Finland 2.3 3.8 5.2 9.9 6.3 5.7 5.5 6.7 6.3 Belgium n/a n/a n/a 4.0 4.2 4.3 4.3 4.5 4.5 Japan 39.4 37.6 27.6 15.9 4.8 4.6 4.5 4.6 4.4 Others 31.7 35.2 32.8 43.8 32.0 35.4 32.7 34.7 36.7 World 83.1 95.4 82.6 115.3 109.9 120.9 112.9 127.1 136.6 Sawnwood: production (million cubic meters) United States 63.7 65.3 86.1 91.1 60.0 63.2 67.5 71.1 74.8 China 14.8 21.2 23.6 6.7 37.2 44.6 55.7 63.0 68.4 Canada 19.8 32.8 39.7 50.5 38.7 38.9 40.6 42.8 43.4 Russian Federation n/a n/a n/a 20.0 28.9 31.2 32.2 33.5 33.9 Germany 11.6 13.0 14.7 16.3 22.1 22.6 21.1 21.5 21.8 Sweden 12.3 11.3 12.0 16.2 16.8 16.5 16.3 16.1 17.5 Brazil 8.0 14.9 13.7 21.3 17.5 16.2 15.2 15.4 15.4 Finland 7.4 10.3 7.5 13.4 9.5 9.8 9.4 10.4 10.9 Others 251.6 252.1 265.6 149.4 146.6 147.4 148.9 149.0 152.7 World 389.1 420.9 463.0 384.8 377.1 390.4 406.9 422.9 438.8 Sawnwood: imports (million cubic meters) China 0.1 0.3 1.3 6.1 16.2 23.1 22.0 25.5 27.3 United States 10.6 17.0 22.5 34.4 16.6 16.4 17.4 20.5 22.2 Japan 3.0 5.6 9.0 10.0 6.4 6.8 6.6 7.5 6.8 United Kingdom 9.0 6.6 10.7 7.9 5.7 4.9 5.2 5.5 6.4 Egypt, Arab Rep. 0.4 1.6 1.6 2.0 4.8 4.7 4.5 4.4 4.7 Italy 4.0 5.8 6.0 8.4 6.1 6.0 4.9 4.7 4.6 Germany 6.0 6.9 6.1 6.3 4.4 4.6 4.4 4.5 4.5 Netherlands 3.1 3.2 3.5 3.7 2.8 2.7 2.6 2.5 2.5 Others 16.5 24.6 23.8 36.9 45.1 47.5 46.1 47.5 48.4 World 52.6 71.5 84.5 115.6 108.0 116.8 113.5 122.5 127.4 Sources: Food and Agriculture Organization of the United Nations. Notes: n/a implies data not available. Industrial roundwood, reported in cubic meters solid volume underbark (i.e. exclusing bark), is an aggregate comprising sawlogs and veneer logs; pulpwood, round and split; and other industrial roundwood except wood fuel. Sawnwood, reported in cubic meters solid volume, includes wood that has been produced from both domestic and imported roundwood, either by sawing lengthways or by a profile-chipping process and that exceeds 6mm in thickness. COMMODITY MARKETS OUTLOOK | OCTOBER 2015 APPENDIX B 59 Wood-based panels and Woldpulp Monthly Prices (US$/mt) Annual Constant Prices (US$/mt) 1,200 1200 Woodpulp Woodpulp, constant 2010 900 900 600 600 Woodpulp, nominal 300 300 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 1979 1989 1999 2009 Source: World Bank. Source: World Bank. Note: Last observation is September 2015. Note: 2015-25 are forecasts. 1970 1980 1990 2000 2010 2011 2012 2013 2014 Wood-based panels: production (million cubic meters) China 0.9 2.3 3.0 19.3 109.2 134.0 149.3 177.0 189.2 United States 23.0 26.4 37.0 45.7 32.6 32.0 31.5 33.5 34.0 Russian Federation n/a n/a n/a 4.8 10.1 12.1 12.8 12.7 13.1 Canada 3.3 4.8 6.4 15.0 9.9 10.5 11.1 11.7 12.4 Germany 5.8 8.3 9.6 14.1 12.6 12.1 12.1 12.2 12.2 Brazil 0.8 2.5 2.9 5.8 9.5 9.4 10.6 11.2 11.3 Turkey 0.2 0.4 0.8 2.4 6.6 7.4 8.1 8.8 9.6 Poland 1.0 2.0 1.4 4.6 8.2 8.4 8.5 9.0 9.4 Others 34.7 54.6 67.9 74.7 88.7 89.5 89.3 90.8 93.2 World 69.8 101.3 129.0 186.3 287.5 315.5 333.3 366.9 384.5 Wood-based panels: imports (million cubic meters) United States 2.5 2.1 4.2 13.9 8.1 8.2 9.2 9.2 10.0 Germany 1.0 2.3 3.3 4.1 4.6 5.1 5.3 5.1 5.1 Japan 0.6 0.3 3.8 6.2 4.2 5.0 4.8 5.0 4.9 Canada 0.2 0.2 0.5 1.5 3.0 2.9 2.9 2.8 3.7 China 0.1 0.3 3.2 6.6 3.0 3.0 2.9 3.2 3.6 United Kingdom 2.0 2.4 3.3 3.3 2.7 2.8 2.6 3.0 3.3 Italy 0.1 0.8 0.9 1.7 3.0 2.4 2.2 2.4 2.8 Russian Federation n/a n/a n/a 0.4 1.1 1.4 2.1 3.0 2.7 Others 3.5 7.1 11.1 22.1 38.2 40.2 40.2 42.0 41.7 World 10.0 15.7 30.3 59.9 67.9 71.1 72.2 75.7 77.7 Woodpulp: production (million metric tons) United States 37.3 46.2 57.2 57.8 50.9 51.1 50.2 49.1 47.8 Canada 16.6 19.9 23.0 26.7 18.9 18.3 17.8 18.1 17.7 Brazil 0.8 3.4 4.3 7.3 14.5 14.3 14.3 15.5 16.8 Sweden 8.1 8.7 10.2 11.5 11.9 11.9 12.0 11.7 11.5 Finland 6.2 7.2 8.9 12.0 10.5 10.4 10.2 10.5 10.5 China 1.2 1.3 2.1 3.7 7.5 8.9 8.8 9.6 10.4 Japan 8.8 9.8 11.3 11.4 9.5 9.1 8.7 8.8 9.1 Russian Federation n/a n/a n/a 5.8 7.4 7.9 7.7 7.2 7.5 Others 22.5 29.1 37.8 34.9 39.5 41.8 41.9 41.1 40.7 World 101.6 125.7 154.8 171.3 170.6 173.6 171.7 171.5 171.9 Woodpulp: imports (million metric tons) China 0.1 0.4 0.9 4.0 12.1 15.2 17.2 17.6 18.7 United States 3.2 3.7 4.4 6.6 5.6 5.5 5.2 5.5 5.8 Germany 1.8 2.6 3.7 4.1 5.1 5.0 4.8 5.0 4.8 Italy 1.4 1.8 2.1 3.2 3.4 3.5 3.3 3.5 3.4 Netherlands 0.6 0.6 0.6 0.9 1.2 1.6 1.6 2.5 2.5 Korea, Rep. 0.2 0.5 1.1 2.1 2.5 2.5 2.4 2.4 2.4 France 1.3 1.8 1.9 2.4 1.9 1.9 2.0 2.1 2.0 Japan 0.9 2.2 2.9 3.1 1.8 1.9 1.8 1.7 1.8 Others 7.0 7.0 7.6 11.4 14.3 14.6 15.7 16.6 17.0 World 16.6 20.6 25.2 37.8 48.1 51.6 54.0 56.9 58.3 Sources: Food and Agriculture Organization of the United Nations. Notes: n/a implies data not available. Wood-based panels, reported in cubic meters solid volume, is an aggregate comprising veneer sheets, plywood, particle board and fiberboard. Woodpulp, reported in metric tons air-dry weight (i.e. with 10% moisture content), is an aggregate comprising mechanical woodpulp; semi-chemical woodpulp; chemical woodpulp; and dissolving woodpulp. 60 APPENDIX B COMMODITY MARKETS OUTLOOK | OCTOBER 2015 Cotton Monthly Prices (US$/kg) Annual Prices (US$/kg) 6 6 5 5 4 4 Constant 2010 3 3 2 2 1 1 Nominal 0 0 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 1970 1980 1990 2000 2010 2020 Source: World Bank. Source: World Bank. Note: Last observation is September 2015. Note: 2015-25 are forecasts. 1970/71 1980/81 1990/91 2000/01 2010/11 2012/13 2013/14 2014/15 2015/16 Production (thousand metric tons) India 909 1,322 1,989 2,380 5,865 6,095 6,371 6,262 6,381 China 1,995 2,707 4,508 4,505 6,400 7,300 6,700 6,003 5,403 United States 2,219 2,422 3,376 3,742 3,942 3,770 2,802 3,077 3,046 Pakistan 543 714 1,638 1,816 1,948 2,204 2,076 2,069 2,050 Brazil 594 623 717 939 1,960 1,310 1,644 1,652 1,479 Uzbekistan n/a 1,671 1,593 975 910 1,000 920 1,005 921 Turkey 400 500 655 880 594 858 843 722 812 Australia 19 99 433 804 898 1,002 933 937 560 Burkina Faso 8 23 77 116 141 260 247 254 272 Turkmenistan n/a n/a 437 187 380 335 329 327 263 Mexico 312 353 175 72 157 231 193 206 255 Greece 110 115 213 421 180 248 280 308 247 Others n/a n/a 3,141 2,688 2,034 2,265 2,363 2,341 2,215 World 11,740 13,831 18,951 19,524 25,408 26,878 25,699 25,163 23,904 Stocks (thousand metric tons) China 412 476 1,589 3,755 2,087 9,607 11,511 11,890 11,756 India 376 491 539 922 1,850 1,681 1,922 1,946 2,198 Brazil 321 391 231 755 1,400 852 852 852 1,043 United States 915 581 510 1,306 566 848 539 539 973 Turkey 24 112 150 283 412 785 821 809 695 Pakistan 55 131 313 608 316 452 422 414 684 Others 2,502 2,969 3,428 2,984 2,832 3,669 3,974 4,419 3,439 World 4,605 5,151 6,761 10,614 9,463 17,895 20,041 20,869 20,788 Exports (thousand metric tons) United States 848 1,290 1,697 1,467 3,130 2,902 2,330 2,256 2,331 India 34 140 255 24 1,085 1,685 1,393 1,157 1,184 Brazil 220 21 167 68 435 938 767 814 726 Uzbekistan n/a n/a n/a 750 600 653 680 585 595 Australia 4 53 329 849 545 1,345 1,033 776 424 Burkina Faso 9 22 73 112 136 215 253 243 264 Others n/a n/a n/a 2,535 1,786 2,341 2,264 2,342 2,153 World 3,875 4,414 5,069 5,805 7,717 10,078 8,719 8,173 7,677 Imports (thousand metric tons) China 108 773 480 52 2,609 4,426 3,089 2,179 1,632 Bangladesh 0 45 80 248 843 593 857 899 967 Vietnam 33 40 31 84 350 548 656 676 927 Indonesia 36 106 324 570 471 683 661 656 797 Turkey 1 0 46 381 760 804 635 849 699 Pakistan 1 1 0 101 314 430 463 541 463 Thailand 46 86 354 342 383 329 369 398 372 Korea, Rep. 121 332 447 304 230 286 311 285 276 Others 3,741 3,172 3,458 3,682 1,797 1,729 1,680 1,690 1,544 World 4,086 4,555 5,220 5,764 7,756 9,827 8,719 8,173 7,677 Sources: International Cotton Advisory Committee. Notes: n/a implies data not available. COMMODITY MARKETS OUTLOOK | OCTOBER 2015 APPENDIX B 61 Natural rubber Monthly Prices (US$/kg) Annual Prices (US$/kg) 7 7 6 6 5 5 4 4 3 3 Constant 2010 2 2 1 1 Nominal 0 0 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 1970 1980 1990 2000 2010 2020 Source: World Bank. Source: World Bank. Note: Last observation is September 2015. Note: 2015-25 are forecasts. 1970/71 1980/81 1990/91 2000/01 2010/11 2011/12 2012/13 2013/14 2014/15 Production (thousand metric tons) Thailand 287 501 1,275 2,346 3,252 3,569 3,778 4,170 4,324 Indonesia 815 822 1,261 1,501 2,736 2,990 3,012 3,237 3,153 Vietnam 28 46 94 291 752 789 877 949 954 China 46 113 264 445 687 727 802 865 857 India 90 155 324 629 851 893 919 796 705 Malaysia 1,269 1,530 1,291 928 939 996 923 827 668 Cote d’Ivoire 11 23 69 123 231 234 254 289 317 Brazil 25 28 31 88 136 166 171 187 185 Others 569 632 376 461 811 853 893 931 908 World 3,140 3,850 4,985 6,811 10,395 11,217 11,629 12,251 12,070 Consumption (thousand metric tons) China 250 340 600 1,150 3,668 3,622 3,857 4,210 4,760 European Union 991 1,007 1,012 1,293 1,136 1,242 1,077 1,060 1,139 India 86 171 358 638 944 957 988 962 1,012 United States 568 585 808 1,195 926 1,029 950 913 932 Japan 283 427 677 752 749 772 728 710 709 Indonesia 25 46 108 139 421 460 465 509 540 Thailand 8 28 99 243 459 487 505 521 541 Malaysia 20 45 184 364 458 402 441 434 447 Korea, Rep. 26 118 255 332 384 402 396 396 402 Brazil 37 81 124 227 378 382 343 409 413 Others 796 932 845 975 1,268 1,242 1,271 1,264 1,264 World 3,090 3,780 5,068 7,306 10,792 10,997 11,020 11,388 12,159 Exports (thousand metric tons) Thailand 279 457 1,151 2,166 2,866 2,890 3,024 3,649 3,615 Indonesia 790 976 1,077 1,380 2,369 2,566 2,525 2,770 2,662 Malaysia 1,304 1,482 1,322 978 1,245 1,239 1,291 1,332 1,192 Vietnam 23 33 80 273 782 817 1,023 1,076 1,067 Cote d’Ivoire 11 23 69 121 226 234 255 285 323 Others 413 299 263 359 533 582 589 661 814 World 2,820 3,270 3,962 5,277 8,022 8,327 8,707 9,773 9,672 Imports (thousand metric tons) China 178 242 340 820 2,590 2,665 3,176 3,652 3,809 European Union 1,071 1,068 1,072 1,474 1,427 1,664 1,459 1,451 1,546 India 3 1 61 11 187 158 250 336 402 United States 543 576 820 1,192 931 1,049 969 927 946 Japan 292 458 663 801 747 785 700 722 689 Malaysia 45 43 136 548 706 667 871 1,005 914 Korea, Rep. 26 118 254 331 388 402 397 396 403 Brazil 11 56 95 139 249 223 181 224 230 Others 641 673 1,328 1,065 1,157 1,170 1,310 1,235 1,263 World 2,810 3,235 4,769 6,380 8,382 8,784 9,314 9,948 10,202 Sources: Rubber Statistical Bulletin, International Rubber Study Group. 62 APPENDIX B COMMODITY MARKETS OUTLOOK | OCTOBER 2015 Aluminum Monthly Prices (US$/mt) Annual Prices (US$/mt) 3,500 3,500 3,000 3,000 Constant 2010 2,500 2,500 2,000 2,000 1,500 1,500 1,000 Nominal 1,000 500 500 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 1970 1980 1990 2000 2010 2020 Source: World Bank. Source: World Bank. Note: Last observation is September 2015. Note: 2015-25 are forecasts. 1980 1990 2000 2005 2010 2011 2012 2013 2014 Bauxite Production (thousand metric tons) Australia 27,179 40,697 53,801 59,959 68,535 69,977 76,282 81,119 80,300 China 1,700 3,655 7,900 17,408 36,837 37,174 44,052 50,400 65,000 Brazil 4,152 9,876 14,379 22,365 32,028 33,625 34,988 33,849 31,693 India 1,785 5,277 7,562 12,385 12,662 13,000 15,320 20,421 20,688 Guinea 13,911 16,150 17,992 19,237 16,427 17,695 19,974 18,763 17,602 Jamaica 12,064 10,937 11,127 14,118 8,540 10,189 9,339 9,435 9,677 Russian Federation n/a n/a 5,000 6,409 5,475 5,888 5,166 5,322 5,589 Kazakhstan n/a n/a 3,729 4,815 5,310 5,495 5,170 5,193 4,515 Surinam 4,903 3,267 3,610 4,757 3,097 3,236 2,873 2,706 2,708 Indonesia 1,249 1,249 1,151 1,442 27,410 40,644 31,443 55,655 2,556 Venezuela, RB 0 786 4,361 5,815 3,126 2,455 2,500 2,302 2,200 Greece 3,286 2,496 1,991 2,495 1,902 2,324 1,815 1,844 2,100 Dominican Republic 511 85 0 0 0 0 11 770 1,662 Others n/a n/a 6,287 5,601 5,800 6,628 7,655 7,846 9,206 World 93,326 114,835 138,889 176,807 227,150 248,330 256,590 295,624 255,495 Refined Production (thousand metric tons) China 358 854 2,647 7,759 16,244 18,135 20,251 22,046 24,382 Russian Federation n/a n/a 3,258 3,647 3,947 3,992 4,024 3,724 3,488 Canada 1,075 1,567 2,373 2,894 2,963 2,988 2,781 2,967 2,858 United Arab Emirates 35 174 536 722 1,400 1,750 1,861 1,848 2,341 Australia 304 1,233 1,761 1,903 1,928 1,945 1,864 1,778 1,773 India 185 433 647 942 1,610 1,660 1,714 1,596 1,767 United States 4,654 4,048 3,668 2,480 1,727 1,983 2,070 1,948 1,710 Norway 662 867 1,026 1,376 1,090 1,201 1,111 1,155 1,154 Brazil 261 931 1,271 1,498 1,536 1,440 1,436 1,304 978 Bahrain 126 212 509 708 851 881 890 913 931 Iceland 75 88 226 272 826 781 803 736 749 South Africa 87 157 683 851 806 808 665 822 745 Saudi Arabia 0 0 0 0 0 0 0 187 652 Others n/a n/a 5,699 6,788 6,816 7,465 7,000 6,686 6,518 World 16,036 19,362 24,304 31,841 41,745 45,030 46,470 47,710 50,047 Refined Consumption (thousand metric tons) China 550 861 3,352 7,072 15,854 17,702 20,224 21,955 24,069 United States 4,454 4,330 6,161 6,114 4,242 4,060 4,875 4,632 5,250 Germany 1,272 1,379 1,632 1,758 1,912 2,103 2,086 2,083 2,262 Japan 1,639 2,414 2,223 2,276 2,025 1,946 1,982 1,772 2,034 India 234 433 601 958 1,475 1,569 1,690 1,559 1,523 Korea, Rep. 68 369 823 1,201 1,255 1,233 1,278 1,241 1,282 Brazil 296 341 514 759 985 1,077 1,021 988 1,027 Turkey 45 152 211 390 703 870 925 867 915 United Arab Emirates 0 0 34 85 650 750 835 835 835 Others 6,754 8,947 9,456 11,022 11,576 11,880 11,263 10,748 11,071 World 15,312 19,227 25,007 31,636 40,677 43,190 46,179 46,680 50,267 Sources: World Bureau of Metal Statistics. Notes: n/a implies data not available. COMMODITY MARKETS OUTLOOK | OCTOBER 2015 APPENDIX B 63 Copper Monthly Prices (US$/mt) Annual Prices (US$/mt) 10,000 10,000 8,000 8,000 Constant 2010 6,000 6,000 4,000 4,000 2,000 2,000 Nominal 0 0 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 1970 1980 1990 2000 2010 2020 Source: World Bank. Source: World Bank. Note: Last observation is September 2015. Note: 2015-25 are forecasts. 1980 1990 2000 2005 2010 2011 2012 2013 2014 Mine Production (thousand metric tons) Chile 1,068 1,588 4,602 5,321 5,419 5,263 5,434 5,776 5,750 China 177 296 549 639 1,180 1,295 1,577 1,707 1,632 United States 1,181 1,587 1,440 1,157 1,129 1,138 1,196 1,279 1,383 Peru 367 318 553 1,010 1,247 1,235 1,299 1,376 1,380 Congo, DR 460 356 33 98 378 480 608 817 1,003 Australia 244 327 832 930 870 960 914 999 970 Zambia 596 496 249 441 732 784 782 839 759 Russian Federation n/a n/a 580 805 703 714 720 720 720 Canada 716 794 634 595 522 569 580 632 696 Mexico 175 291 365 391 270 444 500 480 514 Kazakhstan n/a n/a 433 436 404 433 491 538 501 Poland 343 370 454 523 425 427 427 429 421 Indonesia 59 169 1,006 1,064 871 543 398 494 366 Others n/a n/a 1,476 1,619 1,985 2,006 2,095 2,252 2,409 World 7,864 8,997 13,207 15,029 16,135 16,291 17,021 18,338 18,502 Refined Production (thousand metric tons) China 314 562 1,312 2,566 4,540 5,163 5,879 6,839 8,008 Chile 811 1,192 2,669 2,824 3,244 3,092 2,902 2,755 2,729 Japan 1,014 1,008 1,437 1,395 1,549 1,328 1,516 1,468 1,554 United States 1,686 2,017 1,802 1,257 1,093 1,031 1,001 1,040 1,095 Russian Federation n/a n/a 824 968 900 910 887 874 874 India 23 39 265 518 647 662 689 619 764 Congo, DR 144 173 29 3 254 349 453 643 742 Zambia 607 479 226 465 767 740 700 629 739 Germany 425 533 709 639 704 709 686 680 683 Korea, Rep. 79 187 471 527 556 593 590 604 604 Poland 357 346 486 560 547 571 566 565 577 Australia 182 274 484 471 424 477 461 480 509 Spain 154 171 316 308 347 354 408 351 428 Others n/a n/a 3,731 4,135 3,637 3,834 3,617 3,737 3,704 World 9,390 10,809 14,761 16,635 19,211 19,814 20,356 21,284 23,011 Refined Consumption (thousand metric tons) China 286 512 1,869 3,621 7,385 7,881 8,896 9,830 11,352 United States 1,868 2,150 2,979 2,264 1,760 1,755 1,758 1,826 1,841 Germany 870 1,028 1,309 1,115 1,312 1,247 1,114 1,136 1,173 Japan 1,158 1,577 1,351 1,229 1,060 1,003 985 996 1,085 Korea, Rep. 85 324 862 868 856 784 721 722 759 Italy 388 475 674 680 619 608 570 552 622 Russian Federation n/a n/a 183 667 457 586 490 484 568 Taiwan, China 85 265 628 638 532 457 432 437 465 Turkey 33 103 248 319 369 421 429 453 453 Others n/a n/a 4,992 5,246 4,989 4,834 4,738 4,566 4,456 World 9,385 10,780 15,096 16,649 19,340 19,576 20,133 21,002 22,774 Sources: World Bureau of Metal Statistics. Notes: n/a implies data not available. 64 APPENDIX B COMMODITY MARKETS OUTLOOK | OCTOBER 2015 Lead Monthly Prices (US$/mt) Annual Prices (US$/mt) 3,500 3,500 3,000 3,000 Constant 2010 2,500 2,500 2,000 2,000 1,500 1,500 1,000 1,000 500 500 Nominal 0 0 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 1970 1980 1990 2000 2010 2020 Source: World Bank. Source: World Bank. Note: Last observation is September 2015. Note: 2015-25 are forecasts. 1980 1990 2000 2005 2010 2011 2012 2013 2014 Mine Production (thousand metric tons) China 160 364 660 1,142 1,981 2,406 2,613 3,048 2,853 Australia 398 570 678 767 712 621 622 711 728 United States 562 493 447 437 356 334 336 343 385 Peru 189 188 271 319 262 230 249 266 278 Mexico 146 174 138 134 192 224 238 253 249 Russian Federation n/a n/a 13 36 97 123 147 143 194 India 15 26 38 60 91 94 115 106 105 Bolivia 16 20 10 11 73 100 81 82 82 Sweden 72 84 107 61 68 62 64 60 71 Turkey 8 18 16 19 39 40 54 78 65 Korea, Dem. People’s Rep. 125 70 26 20 27 29 38 59 53 Iran, Islamic Rep. 12 9 17 22 32 29 36 40 46 Poland 48 45 51 51 48 41 73 74 45 Others n/a n/a 610 372 396 410 429 393 396 World 3,595 3,150 3,080 3,453 4,374 4,741 5,096 5,655 5,550 Refined Production (thousand metric tons) China 175 297 1,100 2,359 4,157 4,604 4,591 4,475 4,221 United States 1,151 1,291 1,431 1,293 1,255 1,248 1,221 1,308 1,128 Korea, Rep. 15 80 222 254 321 423 460 470 633 India 26 39 57 56 366 380 461 462 473 Germany 392 394 387 342 405 429 426 400 380 United Kingdom 325 329 328 304 301 275 312 329 330 Canada 231 184 284 230 273 282 278 288 281 Japan 305 327 312 275 267 253 259 252 240 Mexico 149 238 332 272 257 247 244 236 233 Australia 234 229 223 267 210 232 207 233 232 Italy 134 171 237 211 150 150 138 180 180 Spain 121 124 120 110 163 170 160 160 162 Brazil 85 76 86 121 115 138 165 152 152 Others 2,083 1,683 1,582 1,572 1,485 1,547 1,503 1,615 1,608 World 5,424 5,460 6,701 7,665 9,726 10,377 10,426 10,561 10,253 Refined Consumption (thousand metric tons) China 210 244 660 1,974 4,171 4,618 4,618 4,467 4,199 United States 1,094 1,275 1,660 1,490 1,430 1,410 1,360 1,750 1,650 Korea, Rep. 54 80 309 376 382 427 429 498 564 India 33 147 56 139 420 420 524 428 517 Germany 433 448 390 330 343 374 381 392 337 United Kingdom 296 302 301 288 211 211 229 274 271 Japan 393 416 343 291 224 236 273 255 254 Spain 111 115 219 279 262 263 244 257 245 Italy 275 258 283 262 245 233 195 235 229 Others 2,451 2,063 2,270 2,348 2,012 2,051 2,059 2,089 1,985 World 5,348 5,348 6,491 7,777 9,700 10,243 10,312 10,646 10,252 Sources: World Bureau of Metal Statistics. Notes: n/a implies data not available. Refined production and consumption include significant recyled material. COMMODITY MARKETS OUTLOOK | OCTOBER 2015 APPENDIX B 65 Nickel Monthly Prices (US$/mt) Annual Prices (US$/mt) 60,000 50,000 50,000 Constant 2010 40,000 40,000 30,000 30,000 20,000 20,000 10,000 10,000 Nominal 0 0 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 1970 1980 1990 2000 2010 2020 Source: World Bank. Source: World Bank. Note: Last observation is September 2015. Note: 2015-25 are forecasts. 1980 1990 2000 2005 2010 2011 2012 2013 2014 Mine Production (thousand metric tons) Philippines 38 16 17 27 184 319 318 316 411 Australia 74 67 170 186 170 215 244 256 246 Russian Federation n/a n/a 266 289 274 270 269 242 238 Canada 189 196 191 200 160 219 212 223 235 New Caledonia 87 85 129 112 130 131 132 150 178 Indonesia 41 69 117 156 216 227 622 811 144 China 11 33 51 59 80 90 93 98 98 Brazil 3 13 32 38 54 75 90 74 86 Cuba 38 41 71 74 65 69 65 62 61 South Africa 26 30 37 42 40 43 46 51 55 Colombia 0 0 28 53 49 38 52 49 41 Madagascar 0 0 0 0 0 0 6 25 37 Guatemala 7 0 0 0 0 0 2 9 34 Others n/a n/a 82 120 108 128 123 134 127 World 749 888 1,191 1,356 1,531 1,823 2,272 2,503 1,991 Refined Production (thousand metric tons) China 11 28 52 97 314 470 591 711 644 Russian Federation n/a n/a 242 264 263 266 256 246 246 Japan 109 103 161 164 166 157 170 178 178 Australia 35 43 112 122 102 110 129 142 138 Canada 145 127 134 140 105 142 140 137 115 Norway 37 58 59 85 92 92 92 91 91 Brazil 3 13 23 30 28 43 59 56 73 New Caledonia 33 32 44 47 40 41 45 48 62 Finland 13 17 54 41 49 49 46 44 43 Colombia 0 18 28 53 49 38 52 49 41 United Kingdom 19 27 38 38 32 37 34 40 38 Madagascar 0 0 0 0 0 0 6 25 37 South Africa 18 28 37 42 34 36 33 32 35 Others n/a n/a 127 166 163 184 192 184 180 World 743 858 1,110 1,288 1,437 1,665 1,843 1,985 1,920 Refined Consumption (thousand metric tons) China 18 28 58 197 489 703 805 909 761 Japan 122 159 192 180 177 174 159 159 161 United States 142 127 153 128 119 134 126 123 152 Korea, Rep. 0 24 91 118 101 100 108 107 100 Taiwan, China 0 18 106 84 73 53 57 53 66 Germany 78 93 102 116 100 88 89 66 62 Italy 27 27 53 85 62 66 65 59 60 Spain 9 21 32 48 29 29 32 32 33 South Africa n/a n/a 35 47 41 34 32 35 31 Others n/a n/a 329 315 235 281 257 255 268 World 717 842 1,150 1,317 1,427 1,661 1,729 1,798 1,695 Sources: World Bureau of Metal Statistics. Notes: n/a implies data not available. 66 APPENDIX B COMMODITY MARKETS OUTLOOK | OCTOBER 2015 Tin Monthly Prices (US$/mt) Annual Prices (US$/mt) 35,000 35,000 30,000 30,000 Constant 2010 25,000 25,000 20,000 20,000 15,000 15,000 10,000 10,000 5,000 5,000 Nominal 0 0 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 1970 1980 1990 2000 2010 2020 Source: World Bank. Source: World Bank. Note: Last observation is September 2015. Note: 2015-25 are forecasts. 1980 1990 2000 2005 2010 2011 2012 2013 2014 Mine Production (thousand metric tons) China 16 42 88 113 130 127 116 149 177 Indonesia 33 39 52 120 84 78 90 84 70 Peru 1 5 36 43 34 29 26 24 23 Bolivia 23 17 13 19 20 20 20 19 20 Myanmar 1 1 2 1 1 2 2 9 17 Brazil 7 39 14 12 10 11 14 14 14 Australia 12 7 9 3 19 15 6 6 7 Vietnam 0 1 2 5 5 5 5 5 5 Rwanda 2 1 0 3 3 5 3 4 4 Congo, DR 3 2 0 8 7 3 2 5 4 Malaysia 61 29 6 3 3 3 4 4 4 Nigeria 3 0 2 1 1 2 2 3 2 Lao People’s DR 1 0 0 1 0 0 1 1 1 Others 72 42 10 3 1 1 1 1 1 World 231 225 234 333 318 303 292 327 349 Refined Production (thousand metric tons) China 15 36 110 112 149 155 148 159 187 Indonesia 31 38 46 78 64 73 80 63 68 Malaysia 71 49 26 39 39 40 38 33 37 Peru 0 0 17 38 36 30 25 24 26 Thailand 35 16 17 29 24 24 23 23 16 Bolivia 18 13 9 16 15 15 14 15 15 Brazil 9 38 14 9 9 9 12 12 12 Belgium 3 6 9 8 10 10 11 10 10 Vietnam 0 2 2 2 3 4 5 6 6 India 0 0 4 4 4 4 4 4 4 Poland 0 0 0 0 1 1 1 2 2 Japan 1 1 1 1 1 1 1 2 2 Russian Federation n/a n/a 5 4 1 1 1 1 1 Others n/a n/a 2 1 2 2 2 1 1 World 245 248 262 341 357 369 365 353 386 Refined Consumption (thousand metric tons) China 13 26 49 109 154 176 176 168 193 United States 47 37 51 42 32 32 31 29 29 Japan 31 35 25 33 36 27 28 28 27 Germany 19 22 21 19 17 20 18 18 19 Korea, Rep. 2 8 15 18 17 14 16 15 14 India 2 2 6 8 11 10 10 10 12 Netherlands 5 7 4 4 5 5 5 7 7 Spain 5 4 4 7 6 6 3 5 6 Vietnam 0 0 1 1 2 2 2 4 5 Others 100 98 101 97 88 85 70 70 67 World 223 238 277 339 369 377 358 354 379 Sources: World Bureau of Metal Statistics. Notes: n/a implies data not available. COMMODITY MARKETS OUTLOOK | OCTOBER 2015 APPENDIX B 67 Zinc Monthly Prices (US$/mt) Annual Prices (US$/mt) 5,000 5,000 4,000 4,000 Constant 2010 3,000 3,000 2,000 2,000 1,000 1,000 Nominal 0 0 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 1970 1980 1990 2000 2010 2020 Source: World Bank. Source: World Bank. Note: Last observation is September 2015. Note: 2015-25 are forecasts. 1980 1990 2000 2005 2010 2011 2012 2013 2014 Mine Production (thousand metric tons) China 150 763 1,780 2,061 3,842 4,050 4,859 5,391 5,445 Australia 495 940 1,420 1,367 1,480 1,516 1,542 1,523 1,560 Peru 488 584 910 1,202 1,470 1,256 1,281 1,351 1,319 United States 349 571 829 748 748 769 738 788 831 India 32 70 208 447 740 733 725 817 729 Mexico 243 307 401 476 570 632 660 643 676 Bolivia 50 108 149 160 411 427 390 407 493 Canada 1,059 1,203 1,002 667 649 612 612 426 353 Kazakhstan n/a n/a 322 364 405 377 371 361 347 Ireland 229 167 263 429 354 344 338 327 283 Sweden 167 160 177 216 199 194 188 177 222 Russian Federation n/a n/a 132 186 269 282 259 209 217 Turkey 23 35 26 19 196 158 206 200 211 Others n/a n/a 1,204 1,228 1,176 1,185 1,211 1,202 1,344 World 6,172 7,176 8,823 9,569 12,510 12,535 13,380 13,822 14,029 Refined Production (thousand metric tons) China 155 552 1,957 2,725 5,209 5,212 4,881 5,302 5,827 Korea, Rep. 76 248 473 650 750 828 877 895 915 India 44 79 176 266 701 788 691 773 698 Canada 592 592 780 724 690 662 649 652 648 Japan 735 688 654 638 574 545 571 587 583 Spain 152 253 386 501 517 527 528 529 529 Australia 301 309 489 457 498 507 498 498 482 Peru 64 118 200 166 223 314 319 346 336 Mexico 145 199 337 334 322 322 324 323 326 Kazakhstan n/a n/a 263 357 319 320 320 320 325 Finland 147 175 223 282 307 307 315 312 302 Netherlands 170 208 217 225 264 261 257 275 290 Russian Federation n/a n/a 241 206 260 246 247 262 265 Others n/a n/a 2,757 2,587 2,285 2,305 2,086 2,021 1,998 World 6,159 6,698 9,153 10,119 12,919 13,145 12,563 13,095 13,525 Refined Consumption (thousand metric tons) China 200 369 1,402 3,040 5,350 5,460 5,396 5,995 6,420 United States 810 992 1,315 1,080 907 939 892 939 962 Korea, Rep. 68 230 419 448 540 544 553 578 644 India 95 135 224 389 538 556 561 640 636 Japan 752 814 674 602 516 501 479 498 503 Germany 474 530 532 514 494 515 474 479 474 Belgium 155 178 394 256 321 256 239 222 388 Russian Federation n/a n/a 138 166 203 202 222 265 242 Italy 236 270 377 373 339 338 247 245 240 Others n/a n/a 3,414 3,527 3,313 3,267 3,096 3,138 3,169 World 6,131 6,568 8,889 10,396 12,521 12,579 12,159 13,000 13,678 Sources: World Bureau of Metal Statistics. Notes: n/a implies data not available. APPENDIX C Description of price series Technical notes COMMODITY MARKETS OUTLOOK | OCTOBER 2015 APPENDIX C 71 Description of Price Series Groundnuts (U.S.). Runners 40/50, shelled basis, c.i.f. Rotterdam. Groundnut oil (any origin). C.i.f. Rotterdam. ENERGY Fishmeal (any origin). 64-65%, c&f Bremen, esti- mates based on wholesale price. Coal (Australia). Thermal, f.o.b. piers, Newcastle/Port Kembla, 6,700 kcal/kg, 90 days forward delivery. Palm oil (Malaysia). 5% bulk, c.i.f. N. W. Europe. Coal (Colombia). Thermal, f.o.b. Bolivar, 6,450 kcal/ Palmkernel Oil (Malaysia). C.i.f. Rotterdam. kg, (11,200 btu/lb), less than .8% sulfur, 9% ash, 90 Soybean meal (any origin), Argentine 45/46% extrac- days forward delivery. tion, c.i.f. Rotterdam. Coal (South Africa). Thermal, f.o.b. Richards Bay, Soybean oil (any origin). Crude, f.o.b. ex-mill 6,000 kcal/kg, 90 days forward delivery. Netherlands. Crude oil. Average price of Brent (38° API), Dubai Soybeans (U.S.). C.i.f. Rotterdam. Fateh (32° API), and West Texas Intermediate (WTI, 40° API). Equally weighed. Natural Gas Index (Laspeyres). Weights based on five- Grains year consumption volumes for Europe, U.S. and Japan (LNG), updated every five years. Barley (U.S.). Feed, No. 2, spot, 20 days to-arrive, delivered Minneapolis. Natural gas (Europe). Average import border price with a component of spot price, including U.K. Maize (U.S.). No. 2, yellow, f.o.b. US Gulf ports. Natural gas (U.S.). Spot price at Henry Hub, Rice (Thailand). 5% broken, white rice (WR), milled, Louisiana. indicative price based on weekly surveys of export transactions, government standard, f.o.b. Bangkok. Natural gas (Japan). LNG, import price, cif; recent two months' averages are estimates. Rice (Thailand). 25% broken, WR, milled indicative survey price, government standard, f.o.b. Bangkok. Rice (Thailand). 100% broken, A.1 Super, indicative NON-ENERGY survey price, government standard, f.o.b. Bangkok. Beverages Rice (Vietnam). 5% broken, WR, milled, weekly indicative survey price, minimum export price, f.o.b. Cocoa (ICCO). International Cocoa Organization Hanoi. daily price, average of the first three positions on the Sorghum (U.S.). No. 2 milo yellow, f.o.b. Gulf ports. terminal markets of New York and London, nearest three future trading months. Wheat (U.S.). No. 1, hard red winter (HRW), ordinary protein, export price delivered at the US Gulf Coffee (ICO). International Coffee Organization port for prompt or 30 days shipment. indicator price, other mild Arabicas, average New York and Bremen/Hamburg markets, ex-dock. Wheat (U.S.). No. 2, soft red winter (SRW), export price delivered at the U.S. Gulf port for prompt or 30 Coffee (ICO). International Coffee Organization days shipment. indicator price, Robustas, average New York and Le Havre/Marseilles markets, ex-dock. Tea. Average three auctions, average of quotations at Other food Kolkata, Colombo, and Mombasa/Nairobi. Bananas (Central and South America). Major brands, Tea (Colombo). Sri Lankan origin, all tea, average of free on truck (f.o.t.) Southern Europe, including weekly quotes. duties. Tea (Kolkata). leaf, include excise duty, average of Bananas (Central and South America). Major brands, weekly quotes. US import price, f.o.t. US Gulf ports. Tea (Mombasa/Nairobi). African origin, all tea, Meat, beef (Australia/New Zealand). Chucks and cow average of weekly quotes. forequarters, frozen boneless, 85% chemical lean, c.i.f. U.S. port (east coast), ex-dock. Oils and meals Meat, chicken (U.S.). Broiler/fryer, whole birds, 2-1/2 to 3 pounds, USDA grade "A", ice-packed, Coconut oil (Philippines/Indonesia). Bulk, c.i.f. Georgia Dock preliminary weighted average, Rotterdam. wholesale. Copra (Philippines/Indonesia). Bulk, c.i.f. N.W. Meat, sheep (New Zealand). Frozen whole carcasses Europe. Prime Medium (PM) wholesale, Smithfield, London. 72 APPENDIX C COMMODITY MARKETS OUTLOOK | OCTOBER 2015 Oranges (Mediterranean exporters). Navel, EEC TSP (triple superphosphate). Bulk, spot, granular, indicative import price, c.i.f. Paris. f.o.b. Tunisia. Shrimp (Mexico). West coast, frozen, white, No. 1, Urea (Black Sea). Bulk, spot, f.o.b. Black Sea (primarily shell-on, headless, 26 to 30 count per pound, wholesale Yuzhnyy). price at New York. Sugar (EU). European Union negotiated import price for raw unpackaged sugar from African, Caribbean, Metals and minerals and Pacific (ACP), c.i.f. European ports. Aluminum (LME). London Metal Exchange, Sugar (U.S.). Nearby futures contract, c.i.f. unalloyed primary ingots, standard high grade, Sugar (world). International Sugar Agreement (ISA) physical settlement. daily price, raw, f.o.b. and stowed at greater Caribbean Copper (LME). Standard grade A, cathodes and wire ports. bar shapes, physical settlement. Iron ore (any origin). Fines, spot price, c.f.r. China, 62% Fe. Timber Lead (LME). Refined, standard high grade, physical Logs (West Africa). Sapele, high quality (loyal and settlement. marchand), 80 centimeter or more, f.o.b. Douala, Nickel (LME). Cathodes, standard high grade, Cameroon. physical settlement. Logs (Southeast Asia). Meranti, Sarawak, Malaysia, Tin (LME). Refined, standard high grade, physical sale price charged by importers, Tokyo. settlement. Plywood (Africa and Southeast Asia). Lauan, 3-ply, Zinc (LME). Refined, standard special high grade, extra, 91 cm x 182 cm x 4 mm, wholesale price, spot physical settlement. Tokyo. Sawnwood (West Africa). Sapele, width 6 inches or more, length 6 feet or more, f.a.s. Cameroonian ports. PRECIOUS METALS Sawnwood (Southeast Asia). Malaysian dark red se- Gold (U.K.). 99.5% fine, London afternoon fixing, raya/meranti, select and better quality, average 7 to 8 average of daily rates. inches; length average 12 to 14 inches; thickness 1 to 2 inches; kiln dry, c. & f. UK ports, with 5% agents Platinum (U.K.). 99.9% refined, London afternoon commission including premium for products of certi- fixing. fied sustainable forest. Silver (U.K.). 99.9% refined, London afternoon Woodpulp (Sweden). Softwood, sulphate, bleached, fixing. air-dry weight, c.i.f. North Sea ports. Other raw materials Cotton (Cotton Outlook "CotlookA index"). Middling 1-3/32 inch, traded in Far East, C/F. Rubber (Asia). RSS3 grade, Singapore Commodity Exchange Ltd (SICOM) nearby contract. Rubber (Asia). TSR 20, Technically Specified Rubber, SICOM nearby contract. Fertilizers DAP (diammonium phosphate). Standard size, bulk, spot, f.o.b. US Gulf. Phosphate rock (Morocco). 70% BPL, contract, f.a.s. Casablanca. Potassium chloride (muriate of potash). Standard grade, spot, f.o.b. Vancouver. COMMODITY MARKETS OUTLOOK | OCTOBER 2015 APPENDIX C 73 Technical Notes ENSO El Niño Southern Oscillation GDP gross domestic product IAEA International Atomic Energy Agency Definitions and explanations IEA International Energy Agency JCPOA Joint Comprehensive Plan of Action Constant prices are prices which are deflated by the Manufacturers Unit Value Index (MUV). LME London Metal Exchange MUV is the unit value index in U.S. dollar terms of LNG liquefied natural gas manufactures exported from fifteen countries: Brazil, NOAA National Oceanic Atmospheric Canada, China, Germany, France, India, Italy, Japan, Administration Mexico, Republic of Korea, South Africa, Spain, NPI nickel pig iron Thailand, United Kingdom, and United States. OECD Organization of Economic Cooperation and Development Price indices were computed by the Laspeyres formula. The Non-Energy Price Index is comprised of OPEC Organization of Petroleum Exporting Countries 34 commodities. U.S. dollar prices of each commodity is weighted by 2002-2004 average export values. Base SST Sea Surface Temperature year reference for all indexes is 2010. Countries S/U stocks-to-use ratio included in indexes are all low- and middle-income, TSP triple superphosphate according to World Bank income classifications. UN United Nations Price index weights. Trade data as of May 2008 USDA United States Department of Agriculture comes from United Nations' Comtrade Database via WTI West Texas Intermediate the World Bank WITS system, Food and Agriculture Organization FAOSTAT Database, International Energy Agency Database, BP Statistical Review of World Energy, World Metal Statistics, World Bureau Data sources of Metal Statistics, and World Bank staff estimates. Baker Hughes The weights can be found in the table on the next Bloomberg page. BP Statistical Review of World Energy Reporting period. Calendar vs. crop or marketing Cotton Outlook year refers to the span of the year. It is common in many agricultural commodities to refer to production Fertilizer Week and other variables over a twelve-month period that INFOFISH begins with harvest. A crop or marketing year will INTERFEL Fel Actualités Hebdo often differ by commodity and, in some cases, by International Cocoa Organization (ICCO) country or region. International Coffee Organization (ICO) International Energy Agency (IEA) Abbreviations International Fertilizer Association (IFA) $ = U.S. dollar International Rubber Study Group (IRSG) bbl = barrel International Tea Committee (ITC) bcf/d = billion cubic feet per day International Tropical Timber Organization (ITTO) cif = cost, insurance, freight International Sugar Organization (ISO) cum = cubic meter ISTA Mielke GmbH Oil World dmt = dry metric ton Japan Lumber Journal f.o.b. = free on board MLA Meat & Livestock Weekly f.o.t. = free on track Platts International Coal Report kg = kilogram Singapore Commodity Exchange mb/d = million barrels per day Sopisco News mmbtu = million British thermal units Sri Lanka Tea Board mt = metric ton (1,000 kilograms) U.S. Department of Agriculture toz = troy oz U.. Energy Information Administration (EIA) U.S. NOAA Fisheries Service World Bureau of Metal Statistics Acronyms World Gas Intelligence DAP diammonium phosphate EIA Energy Information Administration 74 APPENDIX C COMMODITY MARKETS OUTLOOK | OCTOBER 2015 Weights for commodity price indices Share of Share of Commodity group energy and non-energy indices sub-group indices Energy 100.0 100.0 Coal 4.7 4.7 Crude Oil 84.6 84.6 Natural Gas 10.8 10.8 Non-energy Commodities 100.0 Agriculture 64.9 Beverages 8.4 100.0 Coffee 3.8 45.7 Cocoa 3.1 36.9 Tea 1.5 17.4 Food 40.0 Grains 11.3 100.0 Rice 3.4 30.2 Wheat 2.8 25.3 Maize (includes sorghum) 4.6 40.8 Barley 0.5 3.7 Oils and Meals 16.3 100.0 Soybeans 4.0 24.6 Soybean Oil 2.1 13.0 Soybean Meal 4.3 26.3 Palm Oil 4.9 30.2 Coconut Oil 0.5 3.1 Groundnut Oil (includes groundnuts) 0.5 2.8 Other Food 12.4 100.0 Sugar 3.9 31.5 Bananas 1.9 15.7 Meat, beef 2.7 22.0 Meat, chicken 2.4 19.2 Oranges (includes orange junice) 1.4 11.6 Agricultural Raw Materials 16.5 Timber 8.6 100.0 Hardwood 8.6 100.0 Logs 1.9 22.1 Sawnwood 6.7 77.9 Other Raw Materials 7.9 100.0 Cotton 1.9 24.7 Natural Rubber 3.7 46.7 Tobacco 2.3 28.7 Metals and Minerals 31.6 100.0 Aluminum 8.4 26.7 Copper 12.1 38.4 Iron Ore 6.0 18.9 Lead 0.6 1.8 Nickel 2.5 8.1 Tin 0.7 2.1 Zinc 1.3 4.1 Fertilizers 3.6 100.0 Natural Phosphate Rock 0.6 16.9 Phosphate 0.8 21.7 Potassium 0.7 20.1 Nitogenous 1.5 41.3 Precious Metals (not included in the non-energy price price index) 100.0 Gold 77.8 Silver 18.9 Platinum 3.3 Notes: Index weights are based on 2002-04 developing countries' export values. Precious metals are not included in the non-energy index. T he five-year decline in most commodity prices continued in the third quarter of 2015 due to ample supplies and weak demand. The decline was led by energy prices, which dropped 17 percent, partly on expectations of increased future exports by Iran. A Special Focus section concludes that the impact of an unusually strong El Niño weather episode this year is unlikely to cause a spike in global agricultural commodity prices, although local disruptions are possible. Separately, this edition documents that Iran could ramp up oil production following the lifting of sanctions and, over the long-term, export a significant volume of oil and natural gas if the country attracts the necessary investment and technology to leverage its substantial reserves. The World Bank’s Commodity Markets Outlook is published quarterly, in January, April, July, and October. The report provides detailed market analysis for major commodity groups, including energy, metals, agriculture, precious metals, and fertilizers. Price forecasts to 2025 for 46 commodities are also presented, together with historical price data. Commodity price data updates are published separately at the beginning of each month. The report and data can be accessed at: www.worldbank.org/commodities