IMF blames supply and demand for price hikes

The International Monetary Fund (IMF) has joined the commodities price debate with its World Economic Outlook.

The IMF argues the sharp spike in commodity prices is a consequence of fundamental supply and demand factors rather than speculators, as claimed by the Organization of the Petroleum Exporting Countries among others.

The report says the effects of high and growing demand from large emerging economies has been exacerbated by a sluggish response by industry to expand key sectors. As a consequence inventories and spare capacity levels are low and the market remains highly sensitive to adverse supply shocks.