Global commodity prices are expected to reach their lowest point in six years in 2026, continuing the downward trend for the fourth consecutive year, according to the latest Commodity Markets Outlook from the World Bank Group.
The outlook predicts a 7% drop in prices for both 2025 and 2026, driven by sluggish global economic growth, an expanding oil surplus, and ongoing uncertainty in policy.
Falling energy prices are contributing to the easing of global inflation, with cheaper rice and wheat helping to make food more affordable in several developing nations.
However, despite these reductions, commodity prices are still expected to remain above pre-pandemic levels, with 2025 and 2026 prices projected to be 23% and 14% higher, respectively, than in 2019.
“Commodity markets are playing a crucial role in stabilising the global economy,” said World Bank Group Chief Economist and Senior Vice President for Development Economics, Indermit Gill.
“While falling energy prices have helped to reduce global consumer-price inflation, this relief will not be long-lasting,” he added.
Gill emphasised that governments should seize the opportunity to reform fiscal policies, prepare their economies for business, and encourage greater trade and investment.
The global oil surplus is set to increase, projected to rise by 65% above its 2020 peak, with slower demand growth driven by the rise in electric vehicles and stagnant oil consumption in China.
Brent crude oil prices are expected to decrease from an average of $68 in 2025 to $60 in 2026, a five-year low.
Energy prices overall are predicted to fall by 12% in 2025 and another 10% in 2026.
Food prices are also projected to ease, with a 6.1% drop in 2025 and a further 0.3% decrease in 2026.
Soybean prices are expected to fall in 2025 due to record production and trade disruptions but should stabilise in the coming years.
Meanwhile, coffee and cocoa prices are forecast to decrease in 2026 as supply conditions improve globally. Fertilser prices, however, are set to rise sharply by 21% in 2025, driven by increased input costs and trade restrictions, before declining by 5% in 2026.
These price hikes could erode farmers’ profit margins and raise concerns about future crop yields. Precious metals have surged to record levels in 2025, with gold prices expected to rise by 42% and an additional 5% in 2026.
Silver prices are also forecast to hit a new high in 2025, climbing by 34% and rising further by 8% in 2026. Commodity prices could fall more than expected if global growth remains slow due to prolonged trade tensions and political uncertainties.
An increase in oil production from OPEC+ could further exacerbate the oil glut, placing additional downward pressure on energy prices. The rise of electric vehicles, expected to accelerate by 2030, may further reduce demand for oil.
Geopolitical conflicts could push oil prices higher and increase the demand for safe-haven assets like gold and silver. Sanctions on oil-producing nations could also push prices above the baseline forecast.
Extreme weather events from a stronger-than-expected La Niña cycle could disrupt agricultural production and raise electricity demand for cooling and heating, putting further pressure on food and energy prices.
The rapid growth of artificial intelligence (AI) and the subsequent rise in electricity demand to support data centres could cause energy and base metal prices like aluminium and copper to increase, which are critical for AI infrastructure.
“Lower oil prices present an important opportunity for developing countries to implement fiscal reforms that encourage growth and job creation,” said World Bank Deputy Chief Economist and Director of the Prospects Group Ayhan Kose.
“Phasing out expensive fuel subsidies will free up resources for essential infrastructure and human capital investments, areas that promote job creation and long-term productivity,” he added.
The report’s special section examines past international commodity agreements and their role in stabilising markets. Though some efforts, such as production quotas and trade restrictions, temporarily stabilised prices, they did not provide long-term solutions.
The report recommends that nations focus on fostering more diverse and efficient production, investing in innovation and technology, enhancing data transparency, and adopting market-based pricing to ensure resilience to price volatility in the future.
