The Russia-Ukraine conflict has upended commodity markets, altering global trade, production and consumption patterns that will keep food and energy prices at “historically high levels” until 2024, the World Bank has said.
The surge in energy prices over the past two years has been the largest since the 1973 oil crisis, the Washington-based lender said in its latest commodity markets outlook.
Meanwhile, the increase in the prices of food commodities — of which Russia and Ukraine are large producers — and fertilisers, which rely on natural gas as a production input, have been the largest since 2008.
“Overall, this amounts to the largest commodity shock we have experienced since the 1970s … the shock is being aggravated by a surge in restrictions in trade of food, fuel and fertilisers,” said Indermit Gill, World Bank vice president for equitable growth, finance and institutions.
Because of the war-related trade and production disruptions, the price of Brent — the global benchmark for two thirds of the world’s oil — is expected to average $100 a barrel this year, its highest level since 2013, after increasing by more than 40 per cent annually, the World Bank said.
APN
