Global Commodity Prices Decline Amid Falling Fuel Costs and Surging Supply

Global commodity prices have been decreasing since 2025, largely due to declining fuel prices, which are expected to drop further to $60 per barrel by 2026. The World Bank's Commodity Markets Outlook suggests that slower oil demand growth in China, increased global supply, and rapid adoption of electric and hybrid vehicles are contributing factors. Despite easing food prices, beverage prices temporarily spiked due to adverse weather in the first half of the year. Gold prices reached record highs in the latter half of 2025 as investors sought a safe haven amid uncertainty.

Key Takeaways:

• Global commodity prices have been declining since the start of 2025 due to falling fuel prices, with Brent crude expected to drop to $60 per barrel by 2026.
• Slower growth in oil consumption is attributed to lower demand from China, rapid adoption of electric and hybrid vehicles, and rising global supply, which increased by nearly 65 percent in 2025 compared to the 2020 peak.
• Agricultural commodities are projected to remain relatively stable, with crop prices expected to decline by 2 percent in 2026 and 1 percent in 2027.
• Fertilizer prices rose about 21 percent due to higher demand, trade restrictions, and supply shortages, but are expected to drop 5 percent over the next two years.
• Despite falling global prices, domestic markets in Bangladesh have seen limited relief due to various factors, including the depreciation of the taka, high import tariffs, and inefficiencies in market management and supply chains.
• Delays in imports and reduced letters of credit have further constrained supply, with Dhaka University economics professor Selim Raihan attributing high local prices to factors such as high fuel and transport costs, taxes, opaque wholesale-to-retail practices, and political uncertainty.

Statistics:

• Brent crude averaged $81 per barrel in 2024 and may drop to $68 per barrel in 2025 and further to $60 per barrel in 2026.
• Global oil supply increased significantly in 2025 and is expected to rise further in 2026, reaching nearly 65 percent higher than the 2020 peak.
• Crop prices are expected to decline by 2 percent in 2026 and 1 percent in 2027.
• Fertilizer prices rose about 21 percent in 2025 and may drop 5 percent over the next two years but will remain above historical averages.
• High inflation persisted in Bangladesh over the last three years, with the 2024-25 fiscal year recording an average inflation rate of 10.03 percent.

Sources:

• World Bank's Commodity Markets Outlook: October 2025
• Dhaka University economics professor Selim Raihan
• Published by HT Digital Content Services with permission from The New Nation