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Commodity prices and the World Economy
Global Chief Economist Helge J. Pedersen
Kemiens dag
København 16. November 2011
1
Growth to be found in East and South
<0%
2
2
0%-3%
N/A
3%-6%
6%-10%
>10%
The bleak economic outlook gives room for a
verry easy monetary policy
3
Fundamentals, easy monetary policy and geopolitical
uncertainty keeps commodity prices high…
4
Financialization of commodity markets might
have an impact on prices
5
Expensive spending programmes weigh on budgets OPEC needs higher oil price to balance budgets
140
6
Nordea forecast:
120
2009
2011
100
80
60
40
76
63
77
88
80
2011E
106
115
110
110
110
2012E
112
113
114
115
114
2013E
116
119
121
123
120
n
69
79
Ir a
60
77
ia
46
2010
us
s
2009
0
R
98
ria
57
Al
ge
117
q
123
Ir a
96
ria
2008
20
ig
e
73
N
89
ia
75
Ar
ab
69
ud
i
59
la
2007
Sa
Year
ue
Q4
ne
z
Q3
t
Q2
Ve
Q1
wa
i

OPEC may have changed its price
target range to USD 85-105/barrel
from USD 70-90/barrel as
Ku

USD per barrel
Monetary policy expectations is decisive for the FX
markets. A weak dollar increases commodity prices
7
A strong USD means lower commodity prices
8
The new world order is close to getting a reality…
9
60,000
60,000
50,000
50,000
40,000
40,000
30,000
30,000
20,000
20,000
10,000
10,000
0
20
09
20
12
20
15
20
18
20
21
20
24
20
27
20
30
20
33
20
36
20
39
20
42
20
45
20
48
0
10
US
CN
IN
JP
DE
EU
BR
RU
Real GDP at PPPs $bn
Real GDP at PPPs $bn
…and China will become the biggest economy in the
world by 2020 (real GDP at PPP)
Demographics tell everything …
Region, million persons
2050: 9.15 billion
Eur o p a, 575
R usland , 116
N o r d A mer ika, 4 4 8
A f r ika, 1.9 9 8
1950: 2,53 billion
Lat in A mer ika, 72 9
Europa Rusland
103
547
Afrika
227
Oceanien, 51
Nord
Amerika
172
Latin
Amerika
167
Oceanien
13
Asien
1.403
A sien, 5.2 3 1
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The demands for cars will soon start to rise at a
dramatic pace in China and India
Source: World Bank, Nordea Markets
12
Expected oil demand growth in China assuming
Japan's and Korea's historic motorization rate this might have a dramatic impact on oilprices
USA
Europe
Source: EIA
13
China will account for 90% of net oil import
growth between 2008-2035
Source: IEA
14
The Changing Global Diet
Source: Global Harvest Initiative
According to FAO global food demand will increase by70% by 2050
15
Factors affecting food prices
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
Weather conditions

Demographics

Wealth

Biofuel

Speculation
G20 on the Action Plan on Food Price Volatility
and Agriculture
”We have decided to act on the five objectives of this Action Plan”
1.
Improving agricultural production and productivity
2.
Increasing market information and transparency
3.
Reducing the effects of price volatility for the most vulnerable
4.
Strengthening international policy coordination
5.
Improving the functioning of agricultural commodity derivatives markets
Cannes Summit Final Declaration, 4. November 2011
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Norge ASA, Nordea Bank AB (publ), Nordea Bank Finland Plc and
Nordea Bank Danmark A/S.
The information provided herein is intended for background information
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information provided herein are the current views of Nordea Markets as of
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risks related to it, and it should not be relied on as such, nor is it a
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Thank you
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Helge J. Pedersen
Global Chief Economist, Nordea Markets
+45 33 33 31 26
[email protected]