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The World Bank expects global commodity prices to decline

A new report from The World Bank shows global commodity prices could see a 21% decline in 2023.  

Lead economist Valerie Mercer-Blackman tells Brownfield, “Most of our commodities that we follow were at an all-time high in 2022 as a result of the effects of the Russia/Ukraine War and we have seen that falling by 14%.”

While commodity prices have declined, she says inflation is keeping food and fertilizer prices high.  

“Other than 2022, where as I mentioned there was a record, we haven’t seen such high prices since 1975 for food in real terms. It has actually already been associated with an increase in food insecurity.”

She says the implementation of government controls like export restrictions could make things worse.

“If the markets are allowed to work as quickly as possible, that gives the best price signal to US farmers as to what to expect in the future, and that’s very important for their expectations about how much to plant, etc.”

She says a large portion of the expected decline happened in the first quarter, but uncertainty around weather and extension of the Black Sea Grain Initiative could sway the market.