Global commodity prices are set to fall to their lowest level in six years in 2026, marking the fourth consecutive year of decline, the World Bank Group reported in its latest Commodity Markets Outlook. Prices are expected to drop by 7% in both 2025 and 2026, driven by weak global economic growth, a growing oil surplus, and ongoing policy uncertainty.

Falling energy prices are easing inflation worldwide, while lower rice and wheat prices are making food more affordable in some developing countries. Yet despite these declines, commodity prices remain above pre-pandemic levels, projected to be 23% higher in 2025 and 14% higher in 2026 compared with 2019.

“Commodity markets are helping to stabilize 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 surplus has expanded significantly in 2025 and is expected to rise next year to 65% above its last high in 2020. Oil demand is slowing as electric and hybrid vehicle adoption rises and consumption stagnates in China. Brent crude is forecast to fall from an average of $68 in 2025 to $60 in 2026, a five-year low. Overall, energy prices are projected to drop 12% in 2025 and a further 10% in 2026.

Food prices are also easing, with projected declines of 6.1% in 2025 and 0.3% in 2026. Soybean prices are falling due to record production and trade tensions, though they are expected to stabilize in the coming years. Coffee and cocoa prices are forecast to fall in 2026 as supply conditions improve. However, fertilizer prices are set to surge 21% in 2025 due to higher input costs and trade restrictions, before easing 5% in 2026, raising concerns about farmer profitability and future crop yields.

Precious metals have reached record highs in 2025, driven by demand for safe-haven assets and central bank purchases. Gold, widely viewed as a safe haven in times of economic uncertainty, is expected to rise 42% in 2025 and a further 5% in 2026, nearly double its 2015–2019 average. Silver prices are projected to hit record annual averages as well, rising 34% in 2025 and 8% in 2026.

Commodity prices could fall further if global growth remains sluggish amid prolonged trade tensions and policy uncertainty. Higher-than-expected oil output from OPEC+ could deepen the glut, while the rise of electric vehicles may reduce long-term oil demand.

Conversely, geopolitical tensions and conflicts could push oil prices higher and boost demand for safe-haven metals. Sanctions or supply disruptions could also lift oil above baseline forecasts. Extreme weather linked to a stronger-than-expected La Niña could disrupt crops and increase energy demand, while rapid AI expansion and growing electricity needs for data centers may drive up energy and base metal prices, including aluminum and copper.

“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.”

The report’s special focus examines the history of international commodity agreements in today’s volatile markets. While past efforts like inventory controls, production quotas, and trade restrictions helped stabilize prices short-term, few achieved lasting results. Even OPEC has struggled to maintain market power, as high prices tend to attract new competitors. The report recommends that countries instead foster diverse and efficient production, invest in technology and innovation, improve data transparency, and promote market-based pricing to build long-term resilience against price volatility.