October 29, (THEWILL) — Commodity prices are projected to fall to their lowest level in six years by 2026, marking the fourth straight year of decline, the World Bank Group said in its latest Commodity Markets Outlook.
According to the report, prices are expected to drop by seven percent in both 2025 and 2026, driven by sluggish global growth, expanding oil supplies, and continued policy uncertainty.
Falling energy prices are easing inflation pressures worldwide, while lower rice and wheat prices have helped improve food affordability in some developing countries.
Despite the declines, global commodity prices remain above pre-pandemic levels, with 2025 and 2026 averages projected to stay 23 and 14 percent higher, respectively, than in 2019.
The report stated, “Commodity markets are helping to stabilize the global economy,” said Indermit Gill, the World Bank Group’s Chief Economist and Senior Vice President for Development Economics.
“But this respite will not last. Governments should use it to strengthen fiscal discipline, make economies business-ready, and accelerate trade and investment.”
The report noted that the global oil surplus has expanded sharply in 2025 and could rise next year to 65 percent above its 2020 high.
Oil demand is slowing as the adoption of electric and hybrid vehicles accelerates and consumption plateaus in China.
Brent crude prices are forecast to drop from an average of $68 in 2025 to $60 in 2026—a five-year low. Energy prices overall are expected to fall by 12 percent in 2025 and another 10 percent in 2026.
Food prices are also trending downward, with declines of 6.1 percent projected for 2025 and 0.3 percent in 2026.
Soybean prices are dropping due to record production and trade frictions but are expected to stabilise over the next two years.
Coffee and cocoa prices are projected to fall in 2026 as supply conditions improve, while fertiliser prices are expected to surge 21 percent in 2025 before easing five percent the following year—raising concerns about farmers’ profit margins and future yields.
Precious metals remain the exception, with gold and silver prices projected to hit record highs.
Gold is expected to rise 42 percent in 2025 and a further five percent in 2026, while silver is forecast to gain 34 percent and eight percent in the same period—buoyed by strong demand for safe-haven assets and central bank purchases.
The report warned that commodity prices could fall more sharply if global growth stays weak, trade tensions persist, or OPEC+ increases production.
On the other hand, renewed geopolitical conflicts or sanctions could lift oil prices and push investors toward gold and silver.
It also noted that the rapid growth of artificial intelligence (AI) and the surge in electricity demand to power data centres could boost prices for energy and industrial metals like aluminium and copper.
“Lower oil prices offer developing economies a window to reform.
“Phasing out costly fuel subsidies can free up funds for infrastructure, education, and job creation,”
said Ayhan Kose, the World Bank’s Deputy Chief Economist and Director of the Prospects Group.
The report’s special focus reviewed decades of international commodity agreements, noting that while some helped stabilise markets temporarily, few delivered lasting results.
It concluded that investment in innovation, efficient production, and transparent markets remains the best long-term path to resilience amid price volatility.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
