2023 : commodity prices have fallen by 21%, the largest annual decline since the epidemic
According to the World Bank, food prices are expected to drop by 8% this year and 3% in 2024.
In its most recent "Commodity Markets Outlook" report, the World Bank predicted that global commodity prices would likely fall in 2023 at their quickest rate since the start of Covid-19.
The economic prospects of nearly two-thirds of emerging economies that depend on commodity exports are projected to be clouded by the expectation that global commodity prices will decline by 21% in 2023 after surging by 45% in 2022. But in 2024, prices will largely hold steady.
The price of agricultural products is anticipated to fall by 7% in 2023 and then further in 2024. Taking into account consistent grain and oilseed exports from the Black Sea region, it is predicted that food costs will drop by 8% this year and 3% in 2024.
Despite this, the report stated that real food prices "will remain in 2023 at their second highest levels since 1975, exceeded only by 2022."
Indermit Gill, chief economist and senior vice president for development economics at the World Bank, stated that the increase in food and energy prices following Russia's invasion of Ukraine has largely subsided as a result of slower economic growth, a mild winter, and commodity trade reallocations.
"However, customers in many nations find this to be little consolation. Food costs will continue to be among the highest of the previous fifty years in actual terms. Instead of employing price controls to protect their most vulnerable residents, governments should instead avoid trade restrictions and implement targeted income-support programmes.
Energy costs are anticipated to fall by 26% YoY in 2023, according to the World Bank.
This year, the average price of Brent crude oil is anticipated to be $84 per barrel, a 16% decrease from the average price in 2022.
While coal prices are predicted to fall by 42% in 2023, European and US natural gas prices are predicted to halve between 2022 and 2023.
The highest yearly decline in fertiliser prices since 1976 is anticipated to occur this year, when prices will fall by 37%. The research stated that despite this, fertiliser costs are still not far from their most recent peak, which was last experienced in the 2008–2009 food crisis.