Supply & demand

Price for commodities is dependent by the ongoing interconnection of supply and demand. As you might be aware of, commodities are traded in cycles. During seasons, supplies are simply tight and prices will therefore be high. Other times, there are just too much of a certain commodity and no buyers around. Obviously, prices will fall accordingly.

Why do supply and demand determine commodity prices?

Beside speculation, demand from China, India, USA and Europe are of high importance to determine the commodity prices.When there is increased demand for a specific commodity, prices tend to go up. And when it’s obvious there is more supply then demand, the prices naturally go down. So, where can you find more information and statistics about the current supply of all commodities? We have done our best to find official websites below.

What impact supply of commodities?

There are many factors influencing commodity supply, such as:

  • Weather
  • Acreas planted
  • Crop diseases
  • Natural disasters
  • Technology
  • Strikes
  • Political change

What impact commodity demand?

There are many factors influencing commodity demand, such as:

Prices: When prices go down, the price cure itself after a while. People tend to buy more petrol when oil prices go down.
Economic growth: Fast growing economies, such as China and India, are two important countries to consider when discussing demand.
Exchange rates: People tend to trade commodities in US Dollar. If a foreign currency go up in value, commodity prices will appear to be cheap.

Statistics about commodity supply and demand

It’s important to follow the latest figures about supply and demand. Which source you should use depends on which commodity you trade. Below are some resources for your reference:

  • For brent and cruide oil: OPEC is the official and most trusted source for updates regarding oil reserves. Another useful website is U.S. Energy Information Administration (EIA).
  • For wheat and other agricultural commodities: The World Agricultural Outlook Board give forecasts about the supply and demand situation among agricultural products.
  • For minerals in general: USGS Minerals has a wide collection of statistics for minerals.
  • For gold: World Gold Council has the latest research and statistics for gold.
  • For silver: USGS provide you with detailed statistics for silver supply.