The Polish economy is losing out on the rise in commodity prices

Everything is getting more expensive in the world today. Commodity prices continue to rise due to the rapidly recovering demand after the pandemic, amid limited supply, caused by a decade of underinvestment in this sector. The Bloomberg Commodity Index, a broad index based on futures contracts for 23 different commodities (including energy), metals, and commodities, hit the highest levels since the beginning of 2015 this week. Since the beginning of the year, it has already increased by 29.1 percent. Commodity prices are quoted in the dollar, which is currently strong, making commodities bought around the world even more expensive.

"Rising prices of raw materials are a problem for consumers and businesses. The Polish economy is losing out on their price increase, while Russia and Saudi Arabia are gaining. And an increase in the price of crude oil by $10 translates into an increase in inflation by about 0.2 percentage points," Paweł Majtkowski, an eToro analyst, said.

In his opinion, Poland is losing because fuels account for 5.6 percent of our imports and only 1.7 percent of exports, other raw materials account for 3 percent of imports and 2.4 percent of exports (data for the period 1-7/2021, including in the period, a positive total trade balance amounted to PLN 14.2 billion).

"We gain thanks to a surplus in the export of food, cattle, and grain, but this is not able to compensate for the losses resulting from more expensive fuels and other industrial raw materials," Paweł Majtkowski added.

However, in his opinion, what is a problem for consumers and companies may be an opportunity for investors.

"A well-diversified investment portfolio should include commodities or commodities-related companies. This way you can be exposed to gains that seem to have not ended in the commodities market yet," an eToro analyst concluded.

(WBJ)