Raw materials prices remain stable amid strong supply prospects

This blog post is part of a special series based on the October 2025 Commodity Markets Outlook, a flagship report published by the World Bank. This series features concise summaries of commodity-specific sections extracted from the report. Explore the full report here.

The World Bank’s agricultural raw materials price index fell by 1 percent in November, after a 3 percent drop in 2025Q3 (m/m), as modest gains in rubber prices were offset by declining prices of other raw materials, including cotton and timber. The index, which declined modestly this year, is expected to decline in 2026 and 2027, reflecting strong global supply prospects and softening demand.

Cotton prices edged down in November (-1 percent, m/m), after remaining broadly stable over the previous three quarters, and are now about 8 percent lower than a year ago. The easing reflects strong supply growth during the 2024–25 season. According to the latest U.S. Department of Agriculture assessment, global cotton production is expected to grow by less than 1 percent in 2025–26, with sharp declines in Australia (-20 percent), Türkiye (-19 percent), and Uzbekistan (-15 percent) expected to offset increases in Brazil (+10 percent) and China (+5 percent). Together with India and the U.S., these countries account for more than two-thirds of global output. Global cotton consumption is projected to remain broadly stable, leaving the stock-to-use ratio at 0.64, slightly above last season’s level. After an 11 percent year-on-year decline in 2025, cotton prices are expected to rebound by about 3 percent in 2026 and 2027. Downside risks include weaker global economic growth, which would reduce demand, while adverse weather in major producing regions poses upside risks by constraining supply. 

Natural rubber prices were broadly stable in November, following a 2 percent gain in the third quarter of 2025 driven by concerns over trade restrictions and weather-related supply disruptions in Southeast Asia. Over the past 12 months, however, global production has risen by 4.2 percent, led by Côte d’Ivoire (+9 percent), Indonesia (+8 percent), and Thailand (+4.6 percent). Together, these producers account for more than 60 percent of global natural rubber output. On the demand side, consumption increased by just over 1 percent in the year to November 2025, reflecting subdued conditions in the automotive sector. Tire production—nearly two-thirds of natural rubber use—grew by 4 percent for light vehicles and 2.4 percent for heavy vehicles, underscoring sluggish overall demand. Looking ahead, natural rubber prices are expected to remain broadly unchanged in 2025, before rising by 2 percent in 2026 and 3 percent in 2027. Risks to the outlook are tilted to the downside, notably from a sharper-than-expected slowdown in global vehicle production amid newly imposed tariffs and persistent overcapacity in China’s auto sector.