A further factor contributing to recent international commodity price developments may be financial speculation attracted by the higher prices and by the fact that investors are seeking alternative investment opportunities as a fallout from the dip in economic growth and the drop in property values and stocks following the credit crunch. But speculation is unable to change
the fundamental medium-term price levels based on supply and demand, however, it may accentuate price volatility. An additional element in the overall picture is contributed by world-wide low commodity stocks which are fundamentally a result of the drivers on the supply and demand side.