Commodity prices careen out of control: “This is a market that’s being driven by speculation as much as it is by the fundamentals”

World Bank president Robert Zoellick called demand for biofuels a “significant contributor” to world commodity prices as they soared out of control.

“I think you have a perfect storm of things coming together,” Zoellick told NPR.  “You have high energy prices. You have the increase in demand from some of the developing countries. … As the Indian commerce minister said to me, going from one meal a day to two meals a day for 300 million people increases demand a lot.”

Leading the price rise was crude oil, which reached a record $112.21 a barrel yesterday. Crude palm oil reaching $1079 per tonne, soybeans at $13.56 per bushel for May delivery, wheat at $9.23 per bushel and corn at $5.94 per bushel for May delivery. A Goldman Sachs research report projected that soy prices would rise to $15.30 in six months, and that wheat would peak at $11.50 per bushel in the same time period. C

ommenting on the oil market, Stephen Schork, president of the Schork Group, told Oil Voice that reported that “This is a market that’s being driven by speculation as much as it is by the fundamentals.”

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