The World Bank Group’s latest Commodity Markets Outlook points to a world where prices keep sliding, even as uncertainty refuses to budge. Global commodity prices are projected to fall to their lowest level in six years in 2026—the fourth consecutive annual decline. The World Bank forecasts a 7% drop in 2025 and another 7% in 2026, reflecting weak global economic growth, a growing oil surplus, and persistent policy uncertainty.

Across Asia and beyond, falling energy prices are helping to cool inflation. Lower rice and wheat prices have made food more affordable in some developing countries. Even so, the World Bank notes that prices are still elevated versus the pre-pandemic period: average levels in 2025 and 2026 are projected to be 23% and 14% higher, respectively, than in 2019.

“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.”

Energy: the oil glut gets bigger

The report highlights a significantly expanded oil glut in 2025, with the surplus expected to rise next year to 65% above the most recent high, in 2020. Oil demand growth is slowing as electric and hybrid vehicles gain traction, and oil consumption is stagnating in China. Brent crude is forecast to average $68 in 2025 and fall to $60 in 2026—a five-year low. Overall, energy prices are projected to decline by 12% in 2025 and a further 10% in 2026.

Food: relief with caveats

Food prices are easing, with declines of 6.1% projected in 2025 and 0.3% in 2026. Soybean prices are falling in 2025 because of record production and trade tensions, and are expected to stabilize over the next two years. Coffee and cocoa prices are forecast to fall in 2026 as supply conditions improve. The big exception is fertilizer: prices are projected to surge 21% in 2025—reflecting higher input costs and trade restrictions—before easing 5% in 2026. That spike threatens farmers’ margins and raises concerns about future crop yields.

Safe havens: record highs for precious metals

In 2025, precious metals have reached record highs, driven by safe-haven demand and continued central bank purchases. Gold prices are expected to increase by 42% in 2025 and by a further 5% in 2026—leaving prices nearly double their 2015-2019 average. Silver is also set for a record annual average in 2025, rising by 34%, with an additional 8% increase projected for 2026.

What could swing the forecast

The World Bank outlines a two-sided risk picture. Prices could fall more than expected if global growth remains sluggish amid prolonged trade tensions and policy uncertainty. Greater-than-expected oil output from OPEC+ could deepen the glut and push energy prices lower, while faster electric-vehicle adoption—expected to accelerate toward 2030—could further dent oil demand.

Conversely, geopolitical tensions and conflicts could push oil prices higher and bolster demand for safe-haven assets such as gold and silver. Additional sanctions affecting oil markets could also lift prices above the baseline. Weather remains a swing factor: a stronger-than-expected La Niña could disrupt agricultural output and increase electricity demand for heating and cooling, tightening food and energy markets. Rapid expansion of artificial intelligence and rising electricity needs for data centers could put upward pressure on energy and on base metals such as aluminum and copper, which are essential for AI 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.”

Lessons from past commodity agreements

The report’s special focus looks back at international commodity agreements—inventory controls, production quotas, trade restrictions—and finds that while some efforts stabilized prices in the short term, few delivered durable results. Even the most enduring example, the Organization of the Petroleum Exporting Countries (OPEC), has struggled to sustain market power when prices are high, because elevated prices draw new competitors into the market.

Rather than price-control schemes, the World Bank recommends that countries foster more diverse and efficient production, invest in technology and innovation, improve data transparency, and promote market-based pricing to build resilience to volatility.

Asia in the frame

While the report is global in scope, several dynamics land squarely in Asia’s path: oil consumption stagnating in China, shifting vehicle fleets toward electric and hybrid models, and the region’s exposure to La Niña-driven weather risk. For policymakers across developing Asia, the combination of softer energy prices and still-elevated fertilizer costs presents a complicated calculus: near-term relief at the pump and in power markets, but pressure on the farm gate. The World Bank’s message—use the respite to strengthen fundamentals—resonates across the region’s energy importers and exporters alike.