Prices from crude to coffee have soared in recent months, which has fuelled debate about whether the market is on a bull run or is heading for bubble trouble after last week's two-day sell-off.
In the Standard & Poor's GSCI Total Return Index of key commodities, prices had jumped almost 16 per cent this year before last week's market reaction. At the close on Friday, the index was still 3.5 per cent up.
"I don't think we have lost the tail wind," Jack Ablin, the chief investment officer for the Chicago-based Harris Private Bank, told Bloomberg on Friday. "They may have moved up too far too fast, but the long-term underpinnings for higher prices are still in place."
So what is the long-term outlook for commodity markets?
The National asked a panel of experts to look at the big picture and single out commodities to watch out for in the next eight months.
q Are we in a commodities boom or bubble?
a Abah Ofon, the soft commodities analyst at Standard Chartered Bank: I don't think we are in a bubble. Markets have been driven by strong demand. There have been some supply shocks as well. You also have to view this in the light of geopolitical events globally. The long-term picture is still positive as demand is growing from traditional consumers and developing countries.
a Jarmo Kotilaine, the chief economist at National Commercial Bank in Saudi Arabia: It's a more complicated story than it seems. Precious metals have become safe havens as people lose faith in other assets. There are also those [commodities] with supply constraints, such as food and oil.
a Michael McGlone, the senior director of commodity indexes at Standard & Poor's ratings agency: The commodity rally is about global consumer supply and demand. The world economy is rising at a fast pace and the market is changing to reflect that. Increased demand in emerging markets and the weakness of the US dollar is leading to high commodity prices.
a Erica Rannestad, a commodity analyst at CPM Group: I think there are a couple of factors in support of higher prices that are not applicable to a bubble scenario. In the case of precious metals, they're regarded as safe havens as there's a host of political and social problems around the world. People want to invest in them [commodities] to preserve their wealth. They don't trust currencies.
a Dr Giyas Gokkent, the chief economist at National Bank of Abu Dhabi: A boom in some cases, [such as] oil, and a bubble in others, [such as] gold.
q What are the main causes for the movement in commodity prices?
a Abah Ofon: In some cases it's demand; in others it's a weaker US dollar or speculative influences pushing people to invest in alternatives to the greenback.
a Jarmo Kotilaine: The dynamics of the commodities market have changed. Commodities have entered the portfolio of institutional investors. Demand is growing as big pension funds look to put their money in as well as retail investors.
a Michael McGlone: We have a massive expanding global situation where demand is shifting from the US and Europe to emerging markets.
a Erica Rannestad: The main issue has been on the supply side. If you take a commodity like cocoa, the Ivory Coast is responsible for 40 per cent of supply. Bad weather and the political situation there have affected prices, which rose to three-decade highs in February.
a Giyas Gokkent: The main causes have been central banks' loose monetary policy, and global growth.
q Should consumers be more worried about inflationary pressures or a scarcity of crucial commodities?
a Abah Ofon: Concerns about price inflation are valid. Food, especially in developing countries, is a big part of the consumer price inflation basket. The long-term picture is for prices to go up. Our view is that demand can be met, but at a cost.
a Jarmo Kotilaine: We are looking at inflationary pressures building. Add the effect of weather disturbances and economic concerns, and commodities are likely to become an increasingly important policy issue for governments. Even after the end of stimulus measures in the US, investment will continue to trickle into commodities, causing higher prices.
a Michael McGlone: The most significant part of the S&P GSCI index is crude oil. There's no other commodity that will affect GDP as much. It's the most significant commodity. Petroleum accounted for 68 per cent of the index last month.
a Erica Rannestad: [The threat] of inflation has been boosting precious metal prices. You see it in emerging economies where inflation has been rising pretty fast, so you have a lot of consumers buying precious metals to preserve their wealth. This will continue to happen.
a Giyas Gokkent: Consumer prices will rise and if there was scarcity [of certain commodities], that would also cause an increase in price.
q What are the key commodities to watch out for this year?
a Abah Ofon: We are bullish on corn because of supply constraints in the US. The reasons that pushed wheat higher last year are fading, so prices are likely to fall. We are largely bearish on cotton and demand will taper off slightly.
a Jarmo Kotilaine: In a market where there's lots of liquidity flowing around the potential for surprises are high. One commodity where you might see a correction is oil as there has been a risk premium on crude and that may change if regional stability improves.
a Michael McGlone: On silver, most analysts will say it's clear it's moved away from rational price appreciation. Clearly, silver got a little bit out of hand.
a Erica Rannestad: I do expect silver prices to adjust again once short-term investors move out of the market. That will push the price higher. Prices, though, should move back towards US$25 per troy ounce during the next few months.
a Giyas Gokkent: The oil price may decline, once the political turmoil settles, but the long-term trend is up. Gold seems to be the ultimate bubble right now.