COMMODITIES PRICES yesterday tumbled to the lowest level in a year, with oil dropping below $90 a barrel as the raw materials sector was battered by the ongoing storm sweeping global financial markets.

The retreat across energy, metals and agricultural commodities came amid fears that the credit crisis will lead to a global recession.

The Reuters-Jefferies CRB index, a global benchmark for commodities prices, fell to 315.63 points, down 3.3 per cent, and its lowest since September last year.

The index has fallen 33 per cent from a record set last July. The drop sent the equity markets of several commodity exporting countries, including Canada, Brazil and Russia, into a tail-spin. Daniel Brebner, a commodities analyst at UBS in London, said that commodity demand in developed countries continued to decline and the past quarter had witnessed a sharp slowdown in emerging markets, particularly China.

"The lack of credit in key consuming regions as financial markets suffer and liquidity remains poor, in addition to US dollar strength, has added to selling in commodities," he said. - (Financial Times service)