Asia's Imprint on Global Commodity Markets

Dynamic growth patterns of developing Asia will continue to make strong impressions in world commodity markets. Driven by rapid income growth and economic development, developing Asia has surfaced as a major demand force behind the price dynamics of primary commodities. The region's economic growth and development has been tightly associated with rapid industrialization, urbanization, and massive infrastructure investments, all of which are highly resource-intensive. These trends are set to intensify as Asia's mammoth economies emerge. Real incomes in the People's Republic of China are now reaching a level at which demand for energy and resource-intensive consumer durable goods usually takes off. India may not be too far behind in its catch-up process.

The paper provides an overview of Asian influence in world commodity markets and examines its changing patterns. It also attempts to quantify the impact of the rapidly growing Asian economy on long-term resource utilization, using a General Equilibrium Model for Asian Trade (GEMAT) to project regional growth scenarios for 2005-2015. The model captures long-run equilibrium tendencies in product and factor markets for natural resources. The estimated results point to fundamental changes in market dynamics for a broad range of primary commodities.

  • Abstract
  • Introduction
  • Commodity Prices: Long-term Trends and Recent Developments
  • Developing Asia's Imprint on Global Commodity Markets
  • Looking Ahead: Prospects of Global Commodity Markets into 2015
  • Conclusions
  • Appendix
  • Selected References

 

 
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