World Bank warns global commodity prices could rise 23 percent, forecasting food up 10 percent and energy up 32 percent
The World Bank has forecast that commodity prices in the global market could rise by 23 percent by the end of 2026. The bank said the situation could arise because of war centred on Iran, disruption to energy supplies, obstacles to grain transport and the effects of climate change. It warned that inflation and food insecurity could increase further.
The Bangladesh Sangbad Sangstha (BSS) reported the information on Wednesday (28 October), citing the World Bank's 'Commodity Markets Outlook' report published that day.
World Bank Deputy Chief Economist Ayhan Kose said: 'The commodity market has been hit by several large shocks at once.' In his view, higher energy prices and disrupted trade are pushing up the prices of various commodities, with risks to inflation, food security and economic growth.
The report said food prices in the global market could rise by 10 percent in 2026. A further rise of 7 percent has been forecast for the following year. Disruption to grain transport due to conflict, the impact of El Niño, and high prices for energy and fertiliser will play a role behind the increase.
The impact of El Niño could raise temperatures in different regions of the world. Agricultural production could be disrupted by floods, droughts and heatwaves, putting pressure on food supplies.
According to the World Bank forecast, energy prices could rise by 32 percent in 2026. However, they are likely to ease in 2027. The forecast is conditional on the conflicts involving Iran and Ukraine not intensifying further.
Iran's war with the United States and Israel has disrupted energy and fertiliser supplies. In particular, shipping through the Strait of Hormuz has been obstructed, putting pressure on the transport of oil, natural gas and fertiliser.
The report warned that a food crisis could arise if events such as a stronger El Niño impact, new disruption to agricultural transport due to the Russia-Ukraine war, and further increases in energy prices occur together.
The World Bank fears that in an adverse situation, Brent crude could reach an average of 105 dollars per barrel in 2027. In the same situation, food prices could be 12 percent higher than forecast, exceeding even 2022 price levels.
The World Bank report said global oil supply could fall by 5.2 percent in 2026 due to the impact of the wars in the Middle East and between Russia and Ukraine. Excluding the pandemic period, it would be the largest drop in supply in more than four decades.
Meanwhile, because of high prices, global oil use could fall by 2.5 percent this year. It would be the third largest annual fall in use after the Covid-19 pandemic and the 1980 oil crisis.
The World Bank said it has provided 8.7 billion dollars in emergency assistance this year to countries at risk since the start of the Iran war.
Ayhan Kose said protecting the poorest people from the impact of high prices and helping low-income countries under debt pressure should now be the priority.
The World Bank said its current forecast for food, energy and overall commodity prices has risen significantly compared with the forecast given last April.
