World Bank expects global commodity prices to decline in 2023

This year, it’s anticipated that the cost of energy, food, and metals will continue to decline. According to a new World Bank research, prices are projected to continue to fall in 2023, but consumers won’t likely experience much respite because commodity costs are still higher than they were before the pandemic, which is keeping inflation pressures high.

Since the beginning of 2023, the prices of energy, food, and metals have all fallen significantly, placing pressure on the commodity markets. Commodity prices have decreased overall by 14% since January, and are currently 32% below their all-time highs established in June of last year, when markets were still reeling from the full repercussions of the crisis in Ukraine.

It now expects commodity prices to fall 21% this year, which would be the steepest decline in prices since the pandemic, before steadying in 2024.

Despite the fall, consumers are likely still going to feel the pinch, with price levels for all major commodity groups still much higher than they were prior to the pandemic, the World Bank said.

The report pointed to a redirection of trade flows helping to lower prices, with Russian energy and minerals now going toward China and India as well as emerging markets, away from Europe. Coal and gas markets have also seen major switches in terms of trade flows too.