As global commodity prices plunge to pre-pandemic levels, inflationary pressures tied to rising trade tensions may be easing—though not without consequences for the world’s most vulnerable economies.
Global Prices Head for a Six-Year Low
A new report from the World Bank signals that global commodity prices are expected to decline by 12% in 2025 and an additional 5% in 2026. This downward trend could bring prices to their lowest levels since 2020, easing global inflation concerns amid growing trade disputes.
The outlook, published in the Commodity Markets Outlook, highlights how a combination of weak economic growth, ample oil supply, and muted demand is reshaping price expectations across key markets, from energy to food and metals.
Why Prices Are Falling Again
Several forces are converging to drive this sustained drop:
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Energy: Oil and coal prices are projected to fall significantly. Brent crude oil could average just $60 per barrel in 2026—down from $81 in 2024.
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Food: Agricultural commodities are expected to decline by 7% in 2025, helping reduce food-based inflation.
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Metals: Industrial metals are facing lower demand, particularly due to China’s slowing property sector.
Notably, gold prices are bucking the trend, reaching record highs in 2025 due to persistent geopolitical uncertainty and investor demand for safe-haven assets.
Trade Tensions Meet Easing Inflation
Trade protectionism has been on the rise in several major economies. Under typical conditions, higher tariffs would translate into price increases for consumers. However, the current decline in commodity prices may soften the inflationary blow.
For example, while tariffs on imported goods could raise costs, cheaper energy and food inputs help balance price pressures for producers and households alike.
Impacts by Region and Sector
Although falling prices can reduce global inflation, they also threaten growth in commodity-exporting nations.
According to the World Bank, nearly two-thirds of developing economies depend heavily on commodity revenues. For these countries, the combination of price volatility and declining revenues may intensify fiscal challenges.
In humanitarian contexts, declining food prices could slightly ease procurement costs for aid organizations. Yet, acute food insecurity is projected to increase in 2025, with 170 million people affected across 22 vulnerable regions.
Price Projections Through 2026
| Commodity Type | 2024 Price (Est.) | 2025 Price (Forecast) | 2026 Price (Forecast) |
|---|---|---|---|
| Brent Crude Oil | $81/barrel | $64/barrel | $60/barrel |
| Coal | – | ↓ 27% | ↓ 5% |
| Food Commodities | – | ↓ 7% | ↓ 1% |
| Gold | Record High | Stable | Stable |
| Industrial Metals | – | ↓ | ↓ |
World Bank projections show notable declines in key energy and food prices through 2026.
What This Means for Global Stability
The decade has already seen dramatic shifts—from COVID-19 to the war in Ukraine—creating record volatility in commodity markets. The current cycle appears shorter but more intense, with potential for long-lasting economic and political implications.
Takeaways include:
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High volatility adds uncertainty for budget planning in exporting nations.
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Lower energy prices could accelerate the transition to renewables.
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Investment in resilient infrastructure may cushion future shocks.
Looking Ahead
While lower commodity prices may alleviate inflation in the short term, their broader implications vary widely across countries and sectors.
Developing economies will need structural reforms, fiscal discipline, and open trade policies to navigate this changing landscape effectively.
Continue exploring global economic trends and commodity forecasts by reading the full World Bank report or following our in-depth analysis of trade and inflation developments.
Sources: World Bank.
Prepared by Ivan Alexander Golden, Founder of THX News™, an independent news organization delivering timely insights from global official sources. Combines AI-analyzed research with human-edited accuracy and context.
