Record price index
The RBC commodity price index has blown into record territory, once again reaching another all-time high. The index shot up 9.3% in March to average 182.32 and is up nearly 25% on year-over-year. All of the four sub-indexes were higher in March, led by the red-hot energy products sub-index, which was up 13.5 per cent. Agricultural products and metals prices were up 9.5% and 4.5%, respectively, while forestry products managed to squeak out a small gain, rising 0.9% for the month. RBC’s commodity price index and sub-indexes are denominated in US dollars and weighted by major Canadian commodity exports.
Higher energy products prices of late can be attributed to rapid global demand growth, particularly in Asia. Oil prices rose 13.7% in March, and natural gas prices climbed 13.4 per cent. Oil prices continued their upward climb in early April. However, with anticipated warmer weather upcoming, and a traditional period of weaker demand, prices could moderate.
Agricultural product prices increased in March, largely due to higher wheat and canola prices. Larger US export forecasts for winter wheat pushed prices up 13.4% during the month. Canola prices, meanwhile, rose 9.8% but are still down 33.7% from year-ago levels.
Prices of all the individual metals in the metals sub-index were higher again in March. Leading the way were aluminum and nickel prices, up 5.6% and 5.3%, respectively. Both metals have reached highs not seen since 1995 for aluminum and 1989 for nickel. Gold prices were up 2.2% to average US$433.87 per ounce. Silver prices climbed 2.3% to average US$7.23 per ounce.
The forestry products sub-index managed a small gain in March, with pulp prices up 1.2%, and lumber and newsprint prices up 0.8% and 0.7%, respectively. On a year-over-year basis, pulp prices are up 11.3%, while lumber and newsprint prices are up 8.3% and 8.7%, respectively.