The outlook for commodity markets, and the effects of coronavirus, in six charts


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As countries around the world contend with the health emergency of the COVID-19 pandemic, the economic effects of mitigation measures have immediately impacted the world’s commodity markets and are likely to continue to affect them in the longer term. 

The global economic shock of the pandemic has driven most commodity prices down and is expected to result in substantially lower prices over 2020, the April Commodity Markets Outlook reports.

Here is a look at the outlook for commodity markets in six charts:

1. The pandemic has led to widespread commodity price declines


Mitigation measures taken to slow the spread of COVID-19 have resulted in an unprecedented collapse in economic activity and transport, resulting in widespread declines in commodity prices.  Most commodity prices are forecast to be lower in 2020 than 2019, with energy the most affected, and agriculture the least. The risks to the price forecasts are large in both directions and depend heavily on the speed at which the pandemic is contained and mitigation measures are lifted. [Executive Summary, Figure 1.A]

2. The crude oil market has been affected most by the pandemic


The outbreak of COVID-19 has had the largest impact on the crude oil market, as two-thirds of oil is used for transport.  Crude oil prices are forecast to average $35/bbl in 2020, reflecting an unprecedented collapse in oil demand. Brent crude oil prices have declined 70 percent from their January peak, and a historically large production cut by the Organization of the Petroleum Exporting Countries and other oil producers failed to lift prices in April. All crude oil benchmarks have seen sharp falls, with some briefly dropping to negative levels. Crude oil demand is expected to decline almost 10 percent (y/y) in 2020, more than twice as much as any previous fall. [Energy Figure 1.D]

3. Metals have fallen as industrial demand has collapsed


Most metal prices declined in the first quarter of 2020, reflecting a collapse in global industrial demand due to the COVID-19 pandemic. 

Stimulus measures and rising supply concerns have had a limited impact so far in supporting metal prices. The declines in metals prices resulting from the COVID-19 pandemic are—for now—less severe compared to the global financial crisis. [Metals chapter Figure 12.A]

4. Prices for food commodities except rice fell


Most food commodity prices declined in response to mitigation measures to contain the spread of the COVID-19 pandemic, record production for some grains, and favorable weather conditions in key producing regions.  Rice prices, however, increased due to announcements of policy restrictions by some East Asian producers and weather-related production shortfalls. [Ag chapter Figure 6.B]

5. Despite well-supplied markets, food security is a concern


Global food markets remain amply supplied following recent bumper harvests, especially in maize and wheat.  For major staple food commodities, stock-to-use ratios are very high by historical standards. Nevertheless, recent announcements by some key exporters, as well as “excess” buying by some importers have raised concerns about food security. If such concerns become widespread, hoarding may result. Low-income countries are particularly vulnerable to food insecurity, as food accounts for a much larger proportion of their consumption than in other emerging market and developing economies. [Special Focus, Figure SF 2.B]


Report: April 2020 Commodity Markets Outlook

Feature story: A Shock Like No Other: Coronavirus Rattles Commodity Markets

More information: Commodities Market Outlook website

The World Bank Group and COVID-19


John Baffes

Senior Agriculture Economist, Development Economics Prospects Group

Join the Conversation

Christy Perera
May 13, 2020

Very useful article thanks

Ram Bansal
May 13, 2020

It has been said in the article that commodity prices including those of fuels have fallen down due to Corona pandemic. It seems true internationally, but India has a quite reverse story to tell. The Government of India which control fuel prices has been increasing selling prices of Diesel and Petrol to the consumers, not because of any economic logic but to increase government revenue so that those in power have enough to misspend and pocket public funds.
The country is under lock-down under Corona effect but prices of all the commodities have been on the rise for closure of consumer markets under government orders. People don't have enough stock of eatables in their homes hence they request the shopkeepers to supply them whatever they have and at whatever price, the shopkeepers open their shops against government orders and sell the eatable at enhanced prices. Thus, it is a government-enhanced price market due to mismanagement for more profits to the rich business people. Where are the poverty alleviation intentions of the World Bank and the Governments???
It is requested through this comment that the World Bank intervene in in favor of poor people of India and ask the government of India not to harass poor people in these trying times due to the pandemic.

Ram Bansal
May 13, 2020

If we see the case of India, all statements in the article are falsified. The government of India in control of fuel prices has been regularly enhancing fuel prices to the consumers for more profits to the suppliers and the government. Thus blood of poor people of India is being sucked out by the government. Can the World Bank intervene, or at least take note of the fact what is happening in India.

Jom Jacob
May 13, 2020

Presented well focussed and concise.

Natural rubber prices also fell by around 30% because around 75% of the global demand comes from transport sector, especially in auto-tyre manufacturing.