Global commodity prices are expected to decline for a fourth consecutive year in 2026, reaching their lowest point since 2020, according to the World Bank Group’s Commodity Markets Outlook released on October 29, 2025. The report projects a 7% decrease in prices for both 2025 and 2026, driven by slow global economic growth, an expanding oil surplus, and ongoing policy uncertainty.
Energy prices have played a key role in reducing inflation globally. Lower rice and wheat prices have made food more affordable in several developing nations. Despite these declines, commodity prices are still projected to remain above pre-pandemic levels; estimates suggest that average prices in 2025 will be 23% higher than those recorded in 2019, while in 2026 they will stand at about 14% above the same benchmark.
“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 oil market has seen a significant glut expand throughout 2025, with projections indicating it will reach levels 65% higher than the most recent peak in 2020. Slower oil demand is attributed partly to increased adoption of electric and hybrid vehicles as well as stagnant consumption patterns in China. Brent crude oil is forecasted to fall from an average of $68 per barrel in 2025 to $60 per barrel in 2026—the lowest since 2021. Energy prices overall are expected to drop by 12% next year and another 10% the following year.
Food commodities show similar trends: food prices are predicted to decrease by just over six percent in 2025 and slightly again—by less than one percent—in 2026. Record soybean production combined with trade tensions has pushed down soybean prices this year but stabilization is anticipated over the next two years. Coffee and cocoa may also see price drops as supply conditions improve by 2026. Fertilizer costs present a different picture; they are forecasted to surge by over one fifth this year due to rising input expenses and export restrictions before easing somewhat next year. This increase could negatively impact farmers’ profits and spark concerns about future crop yields.
Precious metals reached historic highs during the past year as investors sought safe-haven assets amid continued central bank purchases. Gold is expected to rise by approximately forty-two percent this year alone—with further gains anticipated next year—bringing its price close to double its five-year average from before the pandemic period. Silver is also poised for record annual averages through at least next year.
There remains uncertainty about how commodity markets will evolve beyond these forecasts: if global growth remains weak or if trade disputes persist, further downward pressure on prices could occur—especially if OPEC+ increases output unexpectedly or if electric vehicle sales continue growing rapidly toward projections for 2030. On the other hand, geopolitical conflicts or sanctions could lift oil values above baseline estimates; extreme weather linked to La Niña cycles might disrupt agriculture or boost electricity demand; advances such as artificial intelligence may drive up demand—and thus costs—for base metals needed for technology infrastructure.
“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 special focus section of the report reviews international efforts at managing commodity markets historically through mechanisms like inventory controls or quotas but finds these generally offer only short-lived stability unless underpinned by structural changes such as diversification or technological progress.
For further information on data and analysis related to these findings visit the full Commodity Markets Outlook report or access supplementary charts at this link.