We had a huge bull market in commodities between 1999 and in some cases 2008. For oil, it peaked out at $147 in July 2008, and for other commodities they continued to go up until 2011 and then commodities by and large declined sharply until the end of 2015, early 2016 when oil briefly went towards $30. Subsequently, we had a strong rebound in commodity prices principally because the demand from China stabilized and started to increase again. That drove some commodities up, plus in some cases there is the expectation that the shift to electric cars will increase the demand for copper very substantially along with increased defense expenditures.
Each commodity has to be looked at individually and some have rebounded and some have gone up dramatically. Zinc last year was up over 80% and others are still relatively depressed. Agricultural commodities are relatively depressed although the prices of sugar doubled last year.
But one thing I can say is that we are in a world where central banks in the advanced economies; Japan, the US, Europe have printed money.
The Reserve Bank of India has pursued a very good policy but the other central banks in the western world are basically money printers and they will continue to print money. If the economy weakens, they will go into the US QE4 and the Europeans did the same and the Bank of Japan the same.
Regardless whether the global economy picks up or not, I believe that commodity prices are at a relatively low level and I would rather invest in commodity related plays than in say financial assets and in companies that are valued at infinity.