A quick glance at the commodity price index in our historical commodity prices section strongly suggests that a new bubble is forming. The graph below shows the price index for the past 15 years. The value for October 2010 is about the same as the value for December 2007. Note though that the index reached a similar high in April 2010, so it is also possible that commodity prices may fluctuate up and down for a while.

A clearer picture emerges if we look at the price of cotton over the past 25 years.

Cotton price is at an all-time high, at a level higher than the one it reached in May 1995.