World Bank sounds alarm on food crisis as energy shock and El Nino push commodity prices up 23%

Global commodity prices are set to rise 23% in 2026 as the conflict in the Middle East pushes energy prices to a four-year high, while disrupted grain shipments and El Nino raise the risk of worsening food insecurity.

The World Bank said this in its latest Commodity Markets Outlook, released on Wednesday. With oil stocks depleted, it said, the world is more exposed to further supply shocks. Overall commodity prices are forecast to fall 7% in 2027.

Also read: World Bank Group mobilizes $36 billion in India for development and job creation over four years


“Commodity markets are being hit by several major shocks at once,” said Ayhan Kose, the World Bank’s Deputy Chief Economist and Director of the Prospects Group. He said higher energy costs and trade disruptions are pushing up prices across a broad range of commodities and could worsen inflation, food insecurity and economic growth.

Energy prices at a four-year high

Energy prices are projected to rise 32% in 2026, reversing three years of declines, before easing in 2027. Brent crude is forecast to average $91 a barrel this year, up from $69 in 2025, and then fall to $79 in 2027.

Global oil supply is projected to fall 5.2% in 2026, the biggest drop in more than four decades outside the 2020 global recession. Consumption is expected to fall 2.5%, the third-largest annual decline on record after 2020 and 1980. Production still remains below consumption, forcing further withdrawals from oil stocks.

According to an AFP report, energy and fertiliser prices have jumped since the US and Israel launched a war against Iran in late February. Iran has virtually choked the Strait of Hormuz, a key route for oil, gas and fertiliser, AFP reported. It added that the Bank’s forecasts are sharply higher than its April estimates.

Food prices under pressure

Food commodity prices are expected to rise about 10% in 2026 and another 7% in 2027, a cumulative increase of 18%. The World Bank said conflict is disrupting grain shipments, El Nino threatens harvests, and high fuel and fertiliser prices are raising farm costs.

Fertiliser prices are set to rise 14% in 2026, after a surge in urea prices early in the year that has since eased. They are expected to return to 2025 levels in 2027.

Risk of a food crisis

The forecasts assume no major intensification of conflicts that affect commodity supplies. Energy prices could rise further if the Middle East conflict escalates and damage to Russia’s oil infrastructure continues.

The World Bank said higher energy prices, attacks on Black Sea grain shipments and a very strong El Nino could together cause a food crisis, pushing more people into extreme poverty as in the early 2010s. In that adverse scenario, Brent could average $105 a barrel in 2027. Food commodity prices could also be 12% higher than in the baseline forecast, surpassing their 2022 level.

Metals at record highs

Metals prices are set to rise 25% in 2026, with aluminium, copper and tin all at record highs. The World Bank said this reflects strong demand from renewable energy, electric vehicles and data centres, along with supply disruptions this year. Metals prices are expected to fall 3% in 2027.

Precious metals are forecast to rise 40% in 2026 as demand for safe-haven assets stays high amid geopolitical and policy uncertainty. They are expected to ease in 2027 but remain more than three times their 2015-19 average.

Support for countries

The World Bank Group has made $50 billion to $60 billion available through existing instruments, including $25 billion in pre-arranged financing. This can fund social safety nets, boost fiscal capacity and provide working capital and liquidity for firms and farms. Since the start of the war on Iran, it has provided $8.7 billion in emergency support to vulnerable countries.

Also read: World Bank has a $19 billion gameplan to expand its critical minerals business in five years

Kose said the priority must be to protect the poorest people and support low-income countries “already struggling with heavy debt burdens”.

The report also looked at how closely commodity markets are linked. It found that links between price swings become stronger during economic or market stress, including since the Middle East conflict began. Industrial metals pass on the most volatility to other commodity groups on average. The role of oil prices rose sharply after the conflict began.

(With inputs from AFP)