(Bloomberg) -- Spot commodity prices surged to a fresh record high as energy and food supplies continue to be roiled by the war in Ukraine, while China rolls back demand-curbing Covid-19 lockdowns.
The Bloomberg Commodity Spot Index, which tracks prices for 23 raw materials, rose 1.9% Monday to its highest-ever level. The move was mostly driven by a jump in futures contracts for natural gas and wheat amid renewed supply fears. The gauge has climbed 36% this year, heading for the biggest annual advance in more than a decade.
Raw materials have soared since bottoming out in the early days of the pandemic, driven by massive stimulus spending, production cuts and widespread bottlenecks across supply chains. The move, fueling the highest inflation in four decades and prompting central banks to raise interest rates, was exacerbated by Russia’s invasion of Ukraine, which further disrupted energy and grain supplies. Signs that China is easing tough measures to fight the coronavirus have also helped send prices higher.
The commodity rally this year has been led by a jump in oil, gas and transportation-fuel prices amid a supply crunch. The Bloomberg spot energy subindex has skyrocketed more than 92% year-to-date, the most since at least 1992, as global inventories have come under pressure. A gauge tracking agricultural prices has gained 24%.
(Updates with main drivers behind Monday’s rally in second paragraph.)
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