IMF Nonfuel Commodity Index

The IMF Nonfuel Commodity Index, also referred to as the IMF Primary Commodity Prices Index, lists nonfuel commodities developed and maintained by the International Monetary Fund, or IMF.

The IMF, based in Washington, D.C., comprises 189 member countries with the most powerful countries in the global economy have the most voting power. As a multinational organization, its goal is to promote global economic growth and financial stability, encourage international trade and reduce poverty. It aims to achieve this through activities such as price monitoring, capacity building and lending.

The IMF Primary Commodity Prices Index defines nonfuel commodities as industrial metals, food, beverages and agricultural raw materials, along with certain energy sources such as coal. The index excludes precious metals such as gold and (as its name implies) crude oil.

The IMF index tracks prices of globally traded goods, benchmarking prices that are representative of the global market according to the largest exporter of a given commodity.

Many developing nations are very dependent on nonfuel commodities for export earnings and monitor the IMF Nonfuel Commodity Index for market trends. Prices of some nonfuel commodities, such as metals, have occasionally increased faster than oil prices.

In September 2017, macroeconomics researcher Colin Lloyd wrote a report exploring trends in nonfuel commodities. Specifically, he looked at metals, asking, "Does The Rising Price Of Industrial Metals Herald The Beginning Of The Next Commodity Super-Cycle?"

"It is too early to predict the beginning of a new uptrend in the next commodity super-cycle; however, mining companies, outside of China, have reduced capital expenditure over the last few years and, given the long lead times in the mining industry, the current uptrend in prices is probably a function of supply constraints, emanating from a lack of investment, combined with a marginal increase in global demand," Lloyd wrote.

"I believe, however, that this trend can continue for some while," he added. "Inflation in the US and Europe remains subdued, deflation remains a near and present danger in Japan; therefore the major Central Banks are likely to maintain a low interest rate regime. The current long economic expansion will continue for a while yet."

Lloyd noted that, "during the last major uptrend in commodity prices, China was the main source of additional demand. Since announcing its 12th Five Year Plan in March 2011, China has adopted a policy of "Rebalancing" towards domestic demand away from mercantilist export oriented growth. Under this new regime, the services sector should expand faster than manufacturing and demand for raw materials, such as industrial commodities, should decline structurally."