World Bank Says Commodity Prices to See Largest Drop in 2023 Since COVID Crisis

Despite drops, prices of all major commodity groups will remain well above 2015-2019 average levels

Global commodity prices are likely to see the sharpest slump this year since the beginning of the pandemic, but food prices will still remain near record highs, the World Bank said on Thursday.

“Global commodity prices are expected to decline this year at the fastest clip since the onset of the COVID-19 pandemic, clouding the growth prospects of almost two-thirds of developing economies that depend on commodity exports,” the World Bank said in a statement that accompanies its latest Commodity Markets Outlook report.

Commodity prices are projected to drop by 21% in 2023 year-on-year, the report said. The price of Brent crude oil is expected to average $84 a barrel, down 16% from last year’s average.

European and US natural-gas prices are expected to halve between 2022 and 2023, with coal prices set to decrease 42% in 2023, the World Bank added.

Food prices are forecast to drop by 8% this year, but will remain at the second-highest level since 1975.

Fertilizer prices are also forecast to decrease by 37% in 2023, the biggest annual drop since 1974, while still hovering near their recent high last seen during the 2008-2009 crisis.

Despite the drops, prices of all major commodity groups will remain well above their 2015-2019 average levels, the World Bank noted.

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