There are many reasons for commodity price fluctuations, but they are mainly constrained by the supply and demand relations of commodities. Supply increases, prices fall; supply decreases, prices rise, and vice versa, demand increases, prices rise; demand decreases, prices fall. Specifically, there are long-term and short-term factors affecting the price of commodities.
The long-term factors affecting commodity prices are:
1) The effect of changes in the value of the currency. Changes in the value of money directly affect the price of goods. Because the commodity is a currency that represents its price, due to the appreciation and devaluation of the currency, the price will "fall or rise. The goods are also commodities, and they are special commodities whose changes directly affect the changes in commodity prices.
2) The impact of foreign exchange rates. The change in the proportion of foreign currency exchange directly affects the price of import and export commodities, which in turn drives changes in the overall price level. For example, the same kind of goods is purchased in British pounds in the London market, while the US dollar is used in New York, but the exchange rate between the U.S. dollar and the British pound is constantly changing. This results in price differences between markets.
3) Influence of time factor. There are two major changes in the agricultural product during the same planting year, with a 10% to 50% difference between landings and landings, and sometimes even greater. Take wheat as an example. In recent years, the price of wheat in a planting year has ranged from 50 cents to 1 US dollar per bushel. However, the amplitude of wheat in many commodities is still not large.
4) Government policy I is a very important factor. Nearly every year, capital countries adjust the prices of agricultural products. Many countries have increased agricultural production and increased prices.
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