(Washington) The World Bank warned on Tuesday that commodity prices, which have reached historically high levels due to the war in Ukraine, will remain high until the end of 2024.
Updated yesterday at 2:29 p.m.
In its new commodity markets outlook report, the agency says energy, food and fertilizer prices have suffered the biggest shock to commodities since the 1970s.
“As was the case then, the shock is compounded by increased restrictions on trade in food, fuel and fertilizer,” said the World Bank’s Vice President for Equitable Growth, finance and institutions, Indermit Gill.
Energy prices, which in the past two years have seen their biggest increases since the 1973 oil crisis, are expected to rise more than 50% in 2022, before falling in 2023 and 2024.
The world price per barrel of Brent benchmark oil, currently around US$105, is expected to average US$100 for all of 2022. This is its highest level since 2013 and an increase by more than 40% compared to 2021. The price of a barrel of West Texas Intermediate rebounded on Tuesday to around US$101.
The price of a barrel of Brent is expected to moderate to US$92 in 2023, well above its five-year average of US$60.
Natural gas prices in Europe are expected to be twice as high in 2022 as they were in 2021, while coal prices are expected to be 80% higher. Both are all-time highs. High natural gas prices are driving up fertilizer prices, putting pressure on prices in the agricultural sector.
The prices of non-energy products, including those of agriculture — a sector for which Russia and Ukraine are major producers — and metals, are expected to increase by almost 20% in 2022 and also moderate over the coming years. following.
Commodity prices are expected to remain well above the most recent five-year average.
The World Bank added that a prolonged war or additional sanctions against Russia could drive prices even higher and make them more volatile than currently expected.
“Commodity markets are experiencing one of the biggest supply shocks in decades due to the war in Ukraine,” said Ayhan Kose, director of the group that produced the report.
“The resulting rise in food and energy prices is taking a heavy human and economic toll — and it will likely stall progress in poverty reduction. Rising commodity prices are exacerbating already high inflationary pressures around the world. »
Wheat prices are expected to increase by more than 40% and reach a record high this year. This will put pressure on developing economies that depend on wheat imports, especially those of Russia and Ukraine.
Metal prices are expected to rise 16% in 2022 before falling in 2023, but will remain at elevated levels.
According to the report, rising prices threaten to disrupt or delay the transition to cleaner forms of energy, with several countries announcing plans to boost fossil fuel production, while high metal prices drive up the cost of fuels. renewable energies.