Commodity Prices Set To Increase By 23% In 2026, Global Shocks Mount

(MENAFN- Caribbean News Global)

• • Energy prices to rise 32% in 2026; food commodity prices to climb 18% in 2026–27

WASHINGTON, USA - Commodity prices are set to rise 23 percent in 2026 as global shocks mount, according to the World Bank Group's latest Commodity Markets Outlook, released today. The conflict in the Middle East has drawn down oil inventories and is set to push energy prices to a four-year high. Meanwhile, disrupted grain shipments and El Niño threaten harvests and food affordability. With oil stocks depleted, the world is more exposed to further supply shocks. As countries respond to these challenges, the World Bank Group is making financing and support available through its existing instruments, while scaling up its ability to mobilise private capital alongside its own resources.

Enery prices are projected to rise 32 percent in 2026, reversing three years of declines, before moderating in 2027. Brent is forecast to average $91 per barrel in 2026, up from $69 in 2025, then ease to $79 in 2027. Food commodity prices are expected to rise about 10 percent in 2026 and another 7 percent in 2027-a cumulative increase of 18 percent-as conflict disrupts grain shipments, El Niño threatens harvests, and high fuel and fertiliser prices increase agricultural costs. Overall commodity prices are forecast to rise 23 percent this year before declining by 7percent in 2027.

The forecasts assume no major intensification of conflicts affecting global commodity supplies. However, energy prices could rise further if the conflict in the Middle East escalates and damage to Russia's oil infrastructure persists. At the same time, higher-than-expected energy prices, attacks on Black Sea grain shipments, and a very strong El Niño could combine to produce a food crisis that pushes more people into extreme poverty, similar to the situation during the early 2010s. In an adverse scenario in which these risks materialise together, Brent could average $105 a barrel in 2027 and food commodity prices could be 12 percent higher than expected in the baseline forecast, surpassing their level in 2022.

“Commodity markets are being hit by several major shocks at once,” said Ayhan Kose, the World Bank's deputy chief economist and director of the Prospects Group.“Higher energy costs and trade disruptions are driving up prices across a broad range of commodities, threatening to worsen inflation, food insecurity, and economic growth. The priority must be to protect the poorest people and support low-income countries already struggling with heavy debt burdens.”

To support countries as they manage the fallout from higher prices, the World Bank Group has made $50 billion to $60 billion available through existing instruments, including $25 billion in pre-arranged financing. This can support social safety nets for the most vulnerable people, boost fiscal capacity, and provide working capital and liquidity support for firms and farms. At the same time, the institution has made substantial progress on accelerating and simplifying its ability to mobilise private capital alongside its own financing and knowledge services. As a result, the World Bank Group is well positioned to invest in the next generation of youth in developing countries-most importantly, by improving the conditions for job creation.

The conflict is forcing adjustments in how the world produces and consumes energy. Global oil supply is projected to fall 5.2 percent in 2026-the largest drop in more than four decades outside the 2020 global recession. Meanwhile, consumption is expected to decline 2.5 percent, the third-largest annual contraction on record, after 2020 and 1980. High prices amid supply shortages are curbing demand, while electrification is also reducing oil use, particularly in China. Even so, production remains below consumption, forcing further withdrawals from oil stocks and leaving markets more exposed to renewed disruption.

Fertiliser prices are set to rise 14 percent in 2026, after a surge in urea prices early in the year that has since eased, before returning to 2025 levels in 2027.

Metals prices are set to reach a new high in 2026, rising 25 percent as prices of aluminum, copper, and tin all hit record highs. These gains reflect strong demand from investments in renewable energy, electric vehicles, and data centers, together with supply disruptions this year. Prices are expected to decline by 3 percent in 2027.

Precious metals prices are forecast to increase by 40 percent in 2026 as demand for safe-haven assets remains elevated amid geopolitical and policy uncertainty. They are expected to moderate somewhat in 2027 but remain more than three times their 2015–19 average.

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