Steady gains in agricultural raw material prices

This blog post is part of a special series based on the April 2026 Commodity Markets Outlook, a flagship report published by the World Bank Group. This series features concise summaries of commodity-specific sections extracted from the report. Explore the full report here.
 

The World Bank Group’s agricultural raw materials price index firmed in April after gaining 2 percent in 2026Q1 (q/q). The uptick reflects gains in cotton and natural rubber prices, its two key components. The index is expected to remain broadly stable in 2026 before easing by almost 3 percent in 2027 as supply conditions normalize.

Cotton prices jumped 12 percent in April, reversing the softening seen earlier in the year. The rally reflects tighter supply conditions: global production is projected to fall 5 percent in the 2026–27 season, according to the U.S. Department of Agriculture. Several key producers are facing declines—Australia (-33 percent), Türkiye (-18 percent), Brazil (-10 percent), China (-6 percent), and India (1 percent)—while output is set to rise in Argentina (+33 percent) and India (+1 percent).

While global cotton consumption is expected to hold steady, the stocks-to-use ratio is projected to drop from 0.64 at the end of 2025–26 to 0.59 by the end of 2026–27. Cotton prices are expected to ease slightly in 2026 before recovering in 2027. Higher input costs present the biggest upside risk to the price outlook, while weaker-than-expected demand, if global growth disappoints, remains the key downside risk.

Natural rubber prices climbed 5.2 percent in April, extending a 2 percent increase in 2026Q1 (q/q) and pushing prices to levels 20 percent higher than a year earlier. Global supply growth over the 12 months to April 2026 has been minimal: gains in Côte d’Ivoire (+11 percent) and Liberia (+14 percent) were largely offset by declines in Indonesia (-1.7 percent), Malaysia (-14.5 percent), and Viet Nam (-14.3 percent). Demand, meanwhile, rose by more than 1 percent, driven mainly by China (+2.4 percent) and India (+1.9 percent), while consumption in most advanced economies softened. Tire manufacturing—accounting for nearly two-thirds of global natural rubber use—saw steady demand for light‑vehicle tires and stronger growth in heavy‑vehicle segments.

Prices are projected to rise by more than 7 percent in 2026, with additional gains expected in 2027 as demand in emerging markets and developing economies (EMDEs) continues to expand. The main upside risk to the outlook is higher‑than‑expected energy costs, which would raise production costs. On the downside, weaker global growth, particularly in large EMDEs, could temper demand and weigh on prices.