Global commodity prices are forecast to fall by 7% to a six-year low in 2026, marking the fourth consecutive year of decline, according to the World Bank.

In its latest Commodity Markets Outlook, released in Washington on October 29, the bank predicts that prices will fall again this year amid weak economic growth, a growing oil surplus, and persistent policy uncertainty.

Energy

After growing sharply this year, the global oil glut is expected to balloon next year to 65% above its most recent high in 2020. “Oil demand is growing more slowly as demand for electric and hybrid vehicles grows and oil consumption stagnates in China,” the bank says.

Brent crude is forecast to fall from an average of US$68 per barrel this year to a five-year low of US$60 next year. Overall energy prices are projected to sag 12% in 2025 and a further 10% in 2026.

Precious metals and food

Precious metals are expected to keep climbing in 2026, after hitting record highs this year on strong demand for safe-haven assets and continued central bank buying.

Gold prices are forecast to rise 42% this year and an additional 5% next year, elevating prices to nearly twice their five-year average between 2015 and 2019. Silver prices are also expected to hit a record annual average this year, with a surge of 34%, followed by an increase of 8% next year.

Food prices are forecast to fall 6.1% this year and 0.3% next year. “Soyabean prices are falling in 2025 because of record production and trade tensions but are expected to stabilize over the next two years,” the bank says.

As supplies improve, this year’s surge in coffee and cocoa prices is projected to reverse with lower prices next year.

Fertilizer prices are forecast to ease 5% next year after surging 21% on higher input costs and trade restrictions this year. These increases are expected to further erode farmers’ profit margins and raise concerns about future crop yields.

Clouded outlook

The bank warns that overall commodity prices could fall more than expected over the coming year if global growth remains sluggish amid prolonged trade tensions and policy uncertainty.

“Greater-than-expected oil output from OPEC+ could deepen the oil glut and exert additional downward pressure on energy prices,” it says. “Electric-vehicle sales, which are expected to increase sharply by 2030, could further depress oil demand.”

On the other hand, geopolitical tensions and conflicts could push oil prices higher and boost demand for safe-haven commodities like gold and silver.

For oil, the impact of more sanctions could also lift prices above the baseline forecast.

In addition, extreme weather could put upward pressure on energy and food prices. “A stronger-than-expected La Niña cycle could disrupt agricultural output and increase electricity demand for heating and cooling, adding further pressure to food and energy prices,” the bank warns.

Meanwhile, the rapid expansion of artificial intelligence ( AI ) and growing electricity demand to power data centres could raise prices for energy and base metals like aluminium and copper, which are essential for AI infrastructure.

‘Timely opportunity’

Indermit Gill, the bank’s chief economist, reckons commodity markets are helping to stabilize the global economy. “Falling energy prices have contributed to the decline in global consumer-price inflation,” he says. “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.”

Deputy chief economist Ayhan Kose adds that lower oil prices this year provide a “timely opportunity” for developing economies to advance fiscal reforms. “Phasing out costly fuel subsidies can free up resources for infrastructure and human capital – areas that create jobs and strengthen long-term productivity,” he says. “Such reforms would help shift spending from consumption to investment, rebuilding fiscal space while supporting more durable job creation.”