World Bank warns of rises in food, energy prices

Washington: The Russia-Ukraine conflict has dealt “a major shock” to commodity markets, altering global patterns of trade, production and consumption, the World Bank (WB) said in a report.

The increase in energy prices over the past two years has been the largest since the year 1973, according to the WB’s latest Commodity Markets Outlook report.

Price increases for food commodities, of which Russia and Ukraine are large producers, and fertilizers, which rely on natural gas as a production input, have been the largest since 2008, the report noted.

The report estimated that energy prices are expected to rise more than 50 per cent in 2022 before easing in 2023 and 2024.

The price of Brent crude oil is expected to average $100 a barrel in 2022, its highest level since 2013 and an increase of more than 40 per cent compared to 2021. Prices are expected to moderate to $92 in 2023, still well above the five-year average of $60 a barrel.

Non-energy prices, including agriculture and metals, are projected to increase almost 20 per cent in 2022 and will also moderate in the following years.

Image courtesy of thesatimes

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