Global oil, food and coal prices have fallen, but remain substantially higher than before the pandemic.

According to Brazil‘s Petrobras, the conflict in Ukraine has led to continued disruption of supply chains (but less than in 2022), mainly in European energy markets, leading to higher energy prices (alternatives are less efficient than Russian gas). 

At the same time, world commodity prices increased and Ukrainian grain production had problems leaving the country due to Russian control of the Black Sea.

In particular, world prices for food commodities such as cereals and vegetable oils fell in 2023 from record levels in 2022. 

Food

FAO’s food price index was 13.9% lower in 2023 than the 2022 average, but its measures of sugar and rice prices increased over the same period due to weather impacts in Asia‘s producing regions. 

Excluding rice, a staple food for more than half of the world’s population, FAO’s cereal index last year was 15.4% below the 2022 average.

World prices

The World Bank reports that most commodity prices fell in 2023, reflecting a slowdown in economic activity that affected oil and mineral prices and favorable weather conditions that boosted agricultural yields. 

However, on average, commodity prices were 40% higher than their pre-pandemic level. 

Oil prices in 2023 averaged $82, down from $100 in 2022 due to moderating demand and ineffective OPEC+ oil cuts that were largely offset by increased Iranian oil production. 

Looking ahead, the World Bank expects prices to fall further in 2024 and 2025, mainly due to expected sluggish activity in China and advanced countries. 

However, a worsening conflict in the Middle East or higher-than-expected demand could lead to higher prices. 

Finally, coal prices fell 12% monthly in early 2024, reaching a 30-month low, driven mainly by oversupply of coal in China.