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Informist, Thursday, Oct. 30, 2025

 

MUMBAI – The World Bank has projected global commodity prices to fall to their lowest level in six years in 2026, marking the fourth consecutive year of decline. Prices are projected to fall 7% in both 2025 and 2026, driven by weak global economic growth, a growing oil surplus, and persistent policy uncertainty, it said in its Commodity Markets Outlook report released Wednesday. 

 

"Commodity markets are helping to stabilise the global economy," said Indermit Gill, the World Bank Group's chief economist and senior vice president for development economics. "Falling energy prices have contributed to the decline in global consumer-price inflation. But this respite will not last. Governments should use it to get their fiscal house in order, make economies business-ready, and accelerate trade and investment." 

 

The global oil glut has expanded significantly in 2025 and is expected to rise further next year to 65?ove the most recent high achieved in 2020. Demand growth for oil has eased as demand for electric and hybrid vehicles has grown and oil consumption stagnates in China, the report showed. Brent crude oil prices are expected to decline to $60 per barrel in 2026 from $68 per barrel in 2025, marking a five-year low. Energy prices are forecast to fall 12% in the current year and further by 10% next year. Electric vehicle sales, which are expected to increase sharply by 2030, could further weigh on oil demand. 

 

"Lower oil prices provide a timely opportunity for developing economies to advance fiscal reforms that promote growth and job creation," said Ayhan Kose, the World Bank's deputy chief economist and director of the Prospects Group. "Phasing out costly fuel subsidies can free up resources for infrastructure and human capital—areas that create jobs and strengthen long-term productivity. Such reforms would help shift spending from consumption to investment, rebuilding fiscal space while supporting more durable job creation."  

 

Food prices are expected to fall 6.1% in 2025 and 0.3% in 2026. Soybean prices have been falling in the current year due to record production and trade tensions but are expected to stabilise over the next two years. Coffee and cocoa prices are expected to fall next year as supply increases. Fertiliser prices are projected to surge 21% in 2025, reflecting higher input costs and trade restrictions, before easing 5% in 2026. These increases are expected to further erode farmers' profit margins and raise concerns about future crop output. 

 

Prices of precious metals have reached record highs in 2025, driven by demand for safe-haven assets and continued central bank purchases and is expected to further increase by 42% in 2025 and a further 5% next year, leaving gold prices at nearly double their 2015-2019 average. Silver prices are also expected to hit a record annual average in 2025, rising 34% and a further 8% in 2026. 

 

Commodity prices could fall more than expected during the forecast horizon if global growth remains sluggish amid prolonged trade tensions and policy uncertainty, the report said.  End

 

US$1 = INR 88.44

 

Reported by Udita S. Jaiswal

Edited by Tanima Banerjee

 

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