Global commodity prices are expected to tumble to their lowest levels in six years by 2026, according to the World Bank Group’s latest Commodity Markets Outlook. The report forecasts an overall 7% decline in prices in both 2025 and 2026, marking the fourth consecutive year of global commodity price drops.
The downward trend is being driven by weak global economic growth, a growing oil surplus, and persistent policy uncertainty across major economies. The World Bank warns that while easing prices may temporarily relieve inflationary pressures, the underlying market conditions remain fragile and could shift quickly with geopolitical developments.
Energy Prices Falling, Easing Inflation
Energy prices, which have been among the most volatile since the pandemic, are forecast to drop by 12% in 2025 and a further 10% in 2026. The oil glut that began expanding in 2025 is expected to reach levels 65% above the previous high recorded in 2020.
Global oil demand growth has slowed sharply, partly due to the accelerating adoption of electric and hybrid vehicles and stagnant oil consumption in China. Brent crude is projected to fall from an average of $68 per barrel in 2025 to $60 in 2026, a five-year low.
“Commodity markets are helping to stabilize the global economy,” said Indermit Gill, the World Bank’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.”
Food Prices Ease, Fertilizer Costs Surge
Global food prices are also trending downward, with declines of 6.1% in 2025 and 0.3% in 2026 projected.
Soybean prices have dropped due to record production and trade tensions but are expected to stabilize over the next two years. Meanwhile, coffee and cocoa prices are forecast to fall in 2026 as supply conditions improve.
However, the report warns that fertilizer prices are projected to surge 21% in 2025, driven by higher input costs and trade restrictions, before easing 5% in 2026. This sharp increase is likely to erode farmers’ profit margins and could threaten future agricultural productivity.
Gold and Silver Shine Amid Global Uncertainty
While most commodities are losing ground, precious metals are bucking the trend. Gold prices have surged 42% in 2025, reaching record highs as investors flock to safe-haven assets amid economic uncertainty and persistent global tensions. The upward momentum is expected to continue into 2026, with gold prices projected to rise another 5%, nearly doubling their 2015–2019 average.
Silver has followed a similar path, climbing 34% in 2025 and expected to rise an additional 8% in 2026. Central bank purchases and investor demand for hedging against inflation and market volatility are the main forces behind the rally.
Risks Remain: From Geopolitics to Climate Shocks
The World Bank cautions that the outlook could shift dramatically. A sluggish global economy or higher-than-expected oil output from OPEC+ could deepen the current oil surplus and drag energy prices down further. Conversely, geopolitical conflicts, sanctions, or climate-related disruptions could send prices soaring again.
Extreme weather caused by a stronger-than-expected La Niña could reduce agricultural yields and strain energy supplies, while rapid growth in AI and data centre electricity demand could raise prices for key metals like aluminum and copper.
A Call for Fiscal Reform and Investment
“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.
He noted that phasing out fuel subsidies could free up funds for investment in infrastructure and human capital, helping rebuild fiscal space and strengthen long-term productivity.
Focus on Resilience Over Price Control
The report’s special section reviews the history of international commodity agreements, concluding that most price-control measures—from production quotas to trade restrictions—failed to deliver sustainable results. The World Bank instead recommends diversified production, technology investment, transparent data systems, and market-based pricing as the best path to resilience against commodity price volatility.
Conclusion
As the world enters a new phase of shifting market dynamics, the message from the World Bank is clear: the current period of easing prices offers a brief window for policymakers to act decisively, stabilising their economies before the next wave of uncertainty hits.