WASHINGTON – It’s not just gasoline. Prices for many other commodities, from roofing lumber to copper to coffee beans, are surging, many to levels not seen in decades. And demand is more global than ever.
‘Never has there been a commodities boom like it,’ declared the Financial Times, a British business daily.
Increases of a dime or a quarter collectively add up to inflation. Usually, price increases in some sectors of the economy are offset by decreases in others.
But the across-the-board rise in commodity prices makes it more expensive to make and deliver products. That’s fueling fears of inflation and of higher interest rates to curb it.
The boom in commodities grew quietly and steadily over the three years that the global economy has been growing. Copper is trading on mercantile exchanges at its highest levels in 16 years, aluminum prices hit a 10-year high in March and iron-ore producers this month raised the price they charge many steel mills, which use the ore to make steel, by 71.5 percent.
Historically, commodity prices rose or fell together depending on the strength of the world economy, which was driven largely by the U.S. economy, along with Japan and Western Europe.
But some economists think today’s commodities boom reflects new forces, mainly the emergence of China and, to some extent, India as global consumers.