Commodity prices are falling—and for much of Asia, that’s not a relief. It’s a warning.

According to the World Bank’s latest Commodity Markets Outlook, global prices for oil, coal, food, and metals are expected to fall to their lowest levels of the 2020s. While the headline might seem like good news for inflation, the reality for Asia’s developing economies—many of which depend heavily on resource exports—is more sobering.

In 2025, global commodity prices are forecast to tumble by 12%, followed by an additional 5% decline in 2026. Adjusted for inflation, prices are projected to dip below the 2015–2019 average for the first time since the pandemic.

In nominal terms, commodity prices will still be higher than pre-COVID levels—but for producers in countries like Indonesia, Mongolia, and Laos, that offers little comfort.

“Higher commodity prices have been a boon for many developing economies, two-thirds of which are commodity exporters,” said Indermit Gill, Chief Economist and Senior Vice President for Development Economics at the World Bank. “But we’re now seeing the highest price volatility in more than 50 years. The combination of high price volatility and low prices spells trouble.”

That trouble is likely to hit nations across Asia whose public budgets and private growth are tied closely to commodity markets. Indonesia, the world’s largest thermal coal exporter, is now watching coal prices drop by 27% this year and a further 5% in 2026. Mongolia, heavily reliant on copper and coal exports to China, could feel the effects of softening demand in China’s property sector and mounting global trade tensions. And in oil-producing economies like Malaysia and Brunei, Brent crude is expected to average just $64 a barrel in 2025—a full $17 below 2024 levels.

The broader implications ripple out. Across South and Southeast Asia, where fiscal buffers are already thin, the decline in export revenues threatens infrastructure investment, welfare programs, and debt repayment plans. Sri Lanka and Pakistan, for instance, have only just begun to stabilize after recent economic shocks; a new downturn in commodity markets could stall recovery. Bangladesh, though less reliant on raw materials, could face indirect impacts through remittance flows and energy costs.

Globally, energy prices are forecast to decline by 17% in 2025 and 6% in 2026. This reflects not only weak demand, but structural changes: electric vehicles are cutting into oil consumption, especially in China, where over 40% of new cars purchased last year were electric or hybrid—nearly triple the 2021 share.

Food prices are expected to fall by 7% in 2025 and 1% in 2026, offering potential relief in importing countries like the Philippines and Nepal. But falling prices don’t equate to food security. The UN warns that 170 million people in 22 vulnerable economies will face acute food insecurity this year, mostly due to conflict. Lower grain prices may aid humanitarian agencies, but cannot reverse structural hunger.

The World Bank warns that boom-and-bust cycles in commodity prices have intensified during the 2020s, with shorter durations and sharper swings. That volatility strains fiscal management in exporting countries, making it harder to plan long-term or attract stable investment.

Meanwhile, gold—the traditional safe haven—is expected to break records in 2025, staying 150% above pre-pandemic levels. That rise reflects investor anxiety more than optimism, driven by conflict and policy uncertainty.

Industrial metals, by contrast, are expected to drop as trade tensions linger and China’s construction sector stays soft.

“Commodity prices have whipsawed throughout the 2020s—plummeting with arrival of the COVID-19 pandemic, then surging to record highs after Russia’s invasion of Ukraine, and then sinking again,” said Ayhan Kose, Deputy Chief Economist and Director of the Prospects Group at the World Bank.

Gill emphasized three urgent steps for developing economies: restore fiscal discipline, create a more business-friendly climate to attract private capital, and liberalize trade where possible.

For Asia’s vulnerable economies—resource-rich but institutionally stretched—the message is clear: the next commodity crash is already underway, and this time, there may be no boom waiting on the other side.