Asia's Imprint on Global Commodity Markets1

Dynamic growth patterns of developing Asia will continue to make strong impressions in world commodity markets. Driven by rapid income growth and economic development, developing Asia has surfaced as a major demand force behind the price dynamics of primary commodities. The region's economic growth and development has been tightly associated with rapid industrialization, urbanization, and massive infrastructure investments, which are all resource‐intensive. These trends are set to intensify as Asia's mammoth economies emerge. The paper provides an overview of Asian influence in world commodity markets and examines its changing patterns. It also attempts to quantify the impact of the rapidly growing Asian economy on long‐term resource utilization, using a General Equilibrium Model for Asian Trade to project regional growth scenarios. The model captures long‐run equilibrium tendencies in product and factor markets for the use of natural resources. The estimated results point to fundamental changes in market dynamics for a broad range of primary commodities.