WORLD market prices of selected commodities were lower in the year ended March than in the preceding month with the exception of Arabica coffee.
The Bank of Tanzania (BoT) monthly economic review for April gold prices declined slightly due to decrease in global demand.
However, recent reports show gold prices rising buoyed by rising demand for safe-haven investments, as the extent of damage from the coronavirus became more apparent following bleak data from major economies and optimism about a potential vaccine fizzled out.
In Tanzania, gold export is expected to remain strong, amid the pandemic, pushed up by rising global demand.
Deloitte, Economic impact of the Covid-19 pandemic on East African economies report, showed that the increasing gold demand as a safe haven asset will provide a buffer to Tanzania’s mining sector.
“The increase in gold prices as a result of its increasing demand as a safe haven asset will provide a buffer to Tanzania’s mining sector. “As such, the report issued this month, said, “the sector is expected to continue operating in the phase of the pandemic, albeit at a reduced level.”
Similarly, oil prices dropped further as a result of successive episodes of decline in global demand amplified by the outbreak of Coronavirus, and slowdown in economic activity in the face of the Covid-19.
The price of oil steadily falling across global markets since coronavirus first broke out in China at the end of 2019.
Since then, the shutdown of major economies and travel routes to curb the spread of the virus has wiped out oil demand as transport has ground to a halt.
But oil producers have continued to pump crude from their wells, causing a catastrophic imbalance between oversupplied oil and the biggest slump in demand for 25 years.
On annual basis, all commodity prices decreased with the exception of gold and Arabica coffee.
The decline in oil prices was largely associated with the outbreak of Coronavirus.
Sustained weakening in prices of traditional exports amid intensifying Covid-19 may worsen deficit in the current account.