ASIATODAY.ID, WASHINGTON — Global commodity prices are projected to fall to their lowest level in six years by 2026, marking the fourth consecutive year of decline, according to the World Bank’s Commodity Markets Outlook released this week.
Prices are forecast to drop by 7% in both 2025 and 2026, driven by sluggish global growth, a mounting oil surplus, and persistent policy uncertainty.
The World Bank report highlights that falling energy prices are easing global inflationary pressures, while lower rice and wheat prices have made food more affordable in developing countries.
However, despite the recent declines, commodity prices remain above pre-pandemic levels — projected to stay 23% higher in 2025 and 14% higher in 2026 compared to 2019 averages.
“Commodity markets are helping stabilize the global economy,” said Indermit Gill, World Bank Chief Economist and Senior Vice President for Development Economics on October 29, 2025.
“Falling energy prices have given governments some breathing space, but that window won’t last long. They should use it to strengthen fiscal stability, improve business readiness, and accelerate investment and trade.”
Oil Surplus Surges, Brent Prices Expected to Fall to $60 per Barrel
The report notes that the global oil glut expanded sharply in 2025 and is expected to rise to 65% above its most recent high in 2020.
Oil demand is slowing amid the rapid adoption of electric and hybrid vehicles and stagnant oil consumption in China.
As a result, Brent crude oil prices are forecast to decline from an average of $68 per barrel in 2025 to $60 in 2026 — the lowest level in five years.
Overall, energy prices are expected to fall 12% in 2025 and another 10% in 2026.
Food, Metals, and Fertilizers Show Mixed Trends
Global food prices are expected to fall 6.1% in 2025 and 0.3% in 2026, supported by record soybean production and easing trade frictions.
Coffee and cocoa prices may decline in 2026 as global supply conditions improve.
Fertilizer prices, however, are projected to surge 21% in 2025 due to higher input costs and export restrictions, before easing by 5% in 2026 — squeezing farmers’ profit margins and raising concerns about future crop yields.
Meanwhile, precious metals have reached record highs in 2025 amid strong demand for safe-haven assets.
Gold prices surged 42% in 2025 and are expected to rise another 5% in 2026, nearly double their 2015–2019 average.
Silver prices are also projected to climb 34% in 2025 and 8% in 2026.
Geopolitical Risks, Climate, and AI Energy Demand Could Shift the Outlook
The World Bank cautioned that commodity prices could fall further if global growth remains weak amid prolonged trade tensions.
Greater oil output from OPEC+ could deepen the glut and add downward pressure on prices, while rising electric vehicle sales will continue to weigh on oil demand.
Conversely, geopolitical conflicts, economic sanctions, or extreme weather linked to La Niña could trigger sharp price spikes in energy and food markets.
The report also highlights that rapid AI expansion and the surge in electricity demand from data centers may lift prices for base metals such as copper and aluminum, which are critical for AI and clean energy infrastructure.
“Lower oil prices provide a timely opportunity for developing economies to advance fiscal reforms that promote growth and job creation,” said Ayhan Kose, World Bank Deputy Chief Economist and Director of the Prospects Group.
“Phasing out costly fuel subsidies can free up resources for infrastructure and education — investments that build productivity and long-term resilience.”
World Bank Recommends Diversification and Innovation Over Price Controls
The Commodity Markets Outlook emphasizes that traditional price-control measures such as production quotas or trade restrictions rarely deliver lasting stability.
Instead, countries are encouraged to diversify production, invest in technology and innovation, and promote data transparency to strengthen resilience against commodity price volatility. (AT Network)
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