RGE - Latin America EconoMonitor: "The results are quite interesting. Metal prices are very high. They are double the post-war average in 2007 and more than double that average in March 2008. There are only a few years in our whole series where real metal prices were as high – indeed only one, 1916, in the midst of the First World War. If we were to add oil to the graph, it would show with an index of over 500 in 2007 and 700 in March 2008. So, we are really in the midst of a boom in mineral prices.
On the contrary, agricultural prices have just recovered from the very depressed levels reached after the collapse of the 1980s and the smaller additional reduction that took place during the Asian crisis. The major reason for the collapse of the 1980s was the “fallacy of composition” effect in the attempt by many developing countries to increase commodity exports to manage their debt crises. The most surprising result is that in March 2008 (which, according to some analysts, such as Otaviano Canuto, may have marked the end of the recent boom—see his piece in this Monitor on April 21, 2008), real agricultural prices just went back to levels similar to the post-war average and the 1970s. Indeed, tropical commodity prices were still somewhat below those averages. As supplies increase and demand weakens during the ongoing world slowdown, they are likely to fall again in the immediate future."
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