Russia's invasion of Ukraine "has been a huge shock to commodity markets, changing global patterns of trade, production, and consumption in ways that will keep prices at historically high levels until the end of 2024," point out the authors of the latest Commodity Market Outlook report.

"Energy prices are expected to rise by more than 50% this year, before slowing down in 2023 and 2024," say the paper's authors, who are quoted by Lusa, pointing out that "non-energy prices, including agriculture and metals, are expected to rise by almost 20% this year, also opening up in the following years."

However, they warn, "commodity prices are likely to remain well above the average of the past five years, and in the event of a prolonged war, or further sanctions on Russia, prices could be even higher and more volatile than current projections indicate."

The World Bank (WB) forecasts that the price of Brent oil will average $100 this year, the highest level since 2013 and 40% above the average recorded last year, and then fall to $92 in 2023, still well above the $60 average of the past five years.

"Natural gas prices in Europe are expected to be twice as high this year as they were in 2021, while coal prices are expected to be 80% higher than last year, with both prices breaking the record," the WB adds.

"The increase in food and energy prices because of the supply shock driven by the war in Ukraine is having a very heavy human and economic impact, and will likely halt progress in poverty reduction as high commodity prices add to already high inflation pressures around the world," commented World Bank Research Group Director Ayhan Kose, who produces the report.

High commodity prices will have global impacts, particularly in countries already facing the greatest difficulties, added the senior economist of the bank's economic research group: "This will have an impact and long-lasting effects; the sharp rise in commodity prices, such as energy and fertilizers, could lead to a reduction in food production, particularly in developing countries, which will weigh on food production and quality, also affecting food availability, rural income, and the lives of the poor," he warned.

Source: Lusa