The raw materials market went into a record backwardation since 2007

The shortage of raw materials is due to the emergence of the world economy from the coronavirus crisis.

Demand for all commodities from oil and copper to grains is growing, exacerbating backwardation *, which has already reached record levels in the past fourteen-plus years. In other words, the premium that buyers are willing to pay for an immediate delivery of commodity assets versus a similar delivery in the future has reached its highest level since 2007.

* backwardation - a market situation in which the near futures are more expensive than the far ones. The opposite situation, in which the near future is cheaper than the far one, is called contango.

This indicates a shortage of raw materials, the demand for which is due to the recovery of the world economy from the coronavirus crisis. The volume of construction, industrial activity, as well as road and air traffic are growing.

At the same time, China is buying record volumes of corn, and cereals have risen in price so much that it raises fears of a surge in global food inflation.