During the years 2008 and 2009 overall world commodity prices slumped as the demand for consumer goods and energy began to topple along with many sagging economies. This in turn spelt disaster for many investors who considered trading in world commodities to be a major part of their portfolio. The continued decline of live commodity prices lasted into the first quarter of 2010. The forecast has begun to improve over the last 2 quarters as signs of economic recovery begin to show.

According to well respected sources, the increase in demand by emerging China and several other industrialized nations is beginning to show with increasing world commodities prices. The world is no longer made up of separate countries in as much as we would all like to think it does. As a whole, we are tied to one world economy and while on the surface that might seem to be somewhat appealing, it does come with its own share of problems. For instance, a financial crisis in one country can spread and become a global financial crisis.

The demand for raw materials is on the rise, especially with countries such as China, South Korea and Taiwan emerging as major industrial nations. As their economies grow the spot prices of commodities will continue to rise. The end effect is that with more countries fighting for the same commodities, the prices will continue to rise. This might be perfect for the investor, but as long as there are no major checks and balances in place in the FOREX market, it can lead to price runs that can make it much harder for smaller economies to purchase the raw materials they need.

At the same time when the economy takes a dip as it has done as a result of the global financial crisis recently, live commodity prices tend to drop off rather quickly. Not only does this leave many investors taking a loss on their investments, it hits the smaller countries who are producing many of the raw materials exceptionally hard. This is a vicious cycle and one that has only hit home in the last couple of years as the world economy started to sag. With little to no regulation in the markets, the prices were allowed to grow artificially high and too many countries began to depend on these high prices.

While putting any kind of cap on world commodity prices is not exactly feasible, there needs to be much tighter control and regulation on all markets. What to some investors is seen as a dip in the markets can easily spell disaster for the producing country. Even though the world commodity markets are supposed to be self-regulated, checks and balances need to be put in place to stop runs on the market from tanking the economies of the producing countries.