The global commodities business is likely to become much more expensive and more stubborn. Raw material shortages caused by war and outbreaks look set to exacerbate soaring commodity prices, according to the latest MLIV Pulse survey conducted from June 6 to 10.

At the same time, demand for fossil fuels is expected to rise only as Europe seeks to wean itself off Russian energy, shattering short-term hopes that high oil prices will prompt a shift to cleaner renewable energy.

Rising commodity prices will exacerbate inflation that has been high around the world for decades. As central banks around the world raise interest rates aggressively to curb inflation, global inflation risks exacerbating hunger and instability in developing countries and dragging down global economic growth.

Zhitong Finance has learned that this pressure has increased sharply since the outbreak of the war in Ukraine. The war endangered Ukraine's food exports and caused many parts of the world to cut off economic ties with Russia, a major oil producer.

This exaggerates persistent supply bottlenecks and shortages since the outbreak, with the Bloomberg commodity index up 36% this year, expected to be the biggest annual increase since 1979.

The MLIV survey shows that although crude oil prices have fallen from their highs, wheat prices will continue to rise this year, further worsening the increasingly unstable global food situation.

The survey was conducted by 805 participants. At the same time, coal, rather than more renewable energy, is likely to be the preferred fuel for Europe to make up for Russia's gas shortages this winter.

Paul Christopher, head of global market strategy at Wells Fargo & Co Investment Research Institute, said: "the war and the imbalance between supply and demand that existed before the war, especially in the energy sector, will really push up the prices of agriculture, base metals, precious metals and energy. By the end of the year, we strongly prefer a basket of broad-based commodities. "

While Europe's decision to cut Russian fuel supplies is seen as a potential opportunity for a shift to clean energy, the market seems sceptical that this can be achieved in the short term.

In the MLIV survey, 68 per cent of respondents thought coal was likely to play a bigger role in filling Europe's energy gap in the coming winter, while only 32 per cent thought renewable energy would play a leading role.

Although Europe takes the lead in the transition to renewable energy, it will struggle to quickly install wind and solar power equipment to make up for Russia's power shortages. Unforeseen problems in nuclear power generation in France are exacerbating power shortages in Russia.

Matthew Sherwood, senior chief commodities analyst at the Economist Intelligence Unit, said: "the reality is that they will have to look for energy somewhere, and coal will increasingly fill the energy gap in some countries. The transformation of green energy in developing countries may even be slower than we expected. "

In the survey, respondents apparently had a degree of skepticism about the world's shift to clean energy, with 3/4 of respondents saying that world oil demand had not yet peaked.

Meanwhile, 57 per cent of respondents said oil and gas producers should be eligible for inclusion in so-called ESG funds focused on sustainable investment.

The increase in oil demand will also strengthen the world's largest oil exporters, such as Saudi Arabia. Nearly 4/5 of respondents believe that OPEC + alliance is likely to become the main force supporting crude oil prices in the rest of 2022. The shift is highlighted by the US government's realignment of its position on the Saudi regime. Earlier, US President Joe Biden vowed to turn the Saudi regime into a "pariah".

Andrew Blumenfeld, director of data analysis at McCloskey by Opis, a market research firm, said the goals of reducing greenhouse gas emissions and finding fuel are "definitely conflicting right now".

According to the MLIV survey, 64 per cent of respondents expect the Bloomberg Commodity Index to be stronger by the end of the year. Of the four major commodities, wheat is thought to have risen the highest, at 34%.

Nearly 27% of respondents believe that copper prices will rise the most, while oil prices will have a similar increase, while gold will rise by about 13%. About 37% of respondents thought the price of crude oil would lead the decline, while about 17% thought it was wheat.

The war in Ukraine disrupted trade in a range of grains, cooking oil and fertiliser, triggering a record surge in prices and prompting dozens of countries, including India, to impose food export restrictions. This could have a domino effect exacerbating shortages in net food-importing countries and could in turn serve as a catalyst for unrest such as the one triggered by the global food crisis of 2007-2008.

Massimiliano Bondurri, chief executive of SGMC Capital, said the upward pressure on food prices was "unlikely to ease in the short term" and could have a social impact around the world. While Mr Bondurri is sceptical about whether there will be a sharp rise in resource markets well above current levels, he believes "commodities are likely to continue to be supported".

However, even if raw material prices do not rise further, most respondents expect inflation to remain above the central bank's target. This suggests that spiralling price pressures are becoming more entrenched in other parts of the economy. The latest data released last week showed that US CPI unexpectedly accelerated to 8.6 per cent in May.

Nick Hampton, chief executive of Tate & Lyle Plc, a London-based food ingredients maker, said: "We plan to deal with persistent inflation for the foreseeable future. When we manage our business on the assumption that inflation will continue, it is difficult to accurately predict how long inflation will last, because the current situation is moving too fast. "