Commodity prices are set to rise further in 2010, and are "expected to remain high", after an unusually strong recovery from global recession, the International Monetary Fund has said.

Stronger demand for raw materials, fuelled by global economic recovery, will prove the "main source" of pressure for price increases in 2010, the IMF said.

Prices will stay high, compared with historical standards, longer term too, fuelling "further capacity expansion" in many commodity sectors.

"Demand is expected to continue rising at a sold pace as industrialisation continues in emerging and developing countries," IMF analyst Thomas Helbling said.

Spike risk limited 

However, the threat of a 2008-style price spike looks "remote" for now, given robust commodity supplies.

"With inventories remaining above average for many commodities, and substantial spare capacity in many commodity sectors, the upward pressure is likely to remain moderate for some time," Mr Helbling said.

Strong price rises would require "much stronger-than expected" global growth or "other surprises".

Rapid recovery 

The report follows a year in which commodity prices rose, on many measures, by their lost since at least the early 1970s, with the IMF pegging the rebound at 40% in eight months from a February nadir.

The rally was unusually large, and compares with a 5% improvement on average in the first eight months after prices bottom, Mr Helbling said, attributing last year's performance largely to restocking and fund buying.

"Improving financial conditions provided for increased credit availability for inventory financing at more normal costs, while rising inflows into commodity funds likely facilitated the hedging of inventory positions," the report said.

 "The additional forward-looking demand for inventories� allowed for easier absorption of the continued excess supply."

A resilient performance by developing world economies also helped, although moreso among metals and energy, for which emerging markets are taking an increasing share, unlike for wheat.