Commodity Market Outlook Report

According to World Bank report, global economy is better placed than in the 1970s, but escalation of the west Asian conflict with disruptions from the Russian invasion of Ukraine could lead to a dual shock.

It is a bi-annual report (April & October) published by the World Bank.
Objectives – To provide market analysis for major commodity groups like energy, metals, agriculture, precious metals, and fertilizers.
It forecasts prices for 46 key commodities, including oil.

Commodity markets is a place which involves trading i.e., buying and selling of various commodities and their derivative products.

Dual shocks in commodity markets refers to disruption in energy market as well as intensified food insecurity.

Key takeaways from the report

Overall commodity prices – They are projected to fall 4.1% in 2024 and are expected to stabilise in 2025.
Oil prices – It is expected to average $90 a barrel in 2023’s last quarter before falling to $81 a barrel in 2024 as global economic growth slows.
Agriculture Prices – They are expected to decline in 2024 as supplies rise.
Metal prices – They are also projected to drop 5% in 2024.
Gold prices – It have risen about 8% since the onset of the conflict.
Food prices - They are expected to fall by 8 percent in 2023 and 3 percent in 2024.

Urals oil is considered to be of poor quality compared to Brent oil and it is usually sold at a discount of USD 2-3 per barrel against Brent oil.

Food Insecurity – In 2022, nearly 10% of the global population were undernourished and India’s ban on exports of non-basmati rice has shaken global markets.

India accounts for nearly 40% of the world’s rice exports.

Recommendations - All countries to bolster their energy security by accelerating the transition to renewable energy sources to mitigate the effects of oil-price shocks.

Source:

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