The Bloomberg Commodity Spot Commodity Price Index has already fallen by 20% since it hit an all-time high a month ago.
The calculation of the indicator includes 23 futures contracts for energy carriers, metals and agricultural crops.
Despite ongoing supply disruptions, prices for everything from gasoline to wheat are falling on concerns that a stagnating global economy will weigh on demand. This may be of some help in the fight against high inflation in many countries, Bloomberg reported.
Fears are growing in the US that the Federal Reserve will not be able to tame the highest inflation in four decades without plunging the economy into recession. The sharp rise in the US dollar, which makes buying raw materials more expensive for representatives of other countries, also affected commodities traded in the United States. Hedge fund bets that commodities will rise in price have fallen to their lowest level in nearly two years.
However, a recession is a highly anticipated issue and markets have clearly overreacted by bringing commodity prices back to pre-conflict levels in Ukraine, said portfolio manager. Supplies of commodities such as oil remain limited and vulnerable to disruption, he said. The expert expects a resumption of demand in the coming months against the backdrop of China's economic recovery.