According to World Bank senior economist Peter Nagle, energy prices are likely to rise by about 50% in 2022 compared to last year.
Prices are expected to remain high for a longer period of time than previously anticipated, he added.
According to his key findings from the Commodity Markets Outlook April 2022 edition, the world is experiencing the largest commodity shock since the 1970s, with the war in Ukraine dealing a major shock that is altering global patterns of trade, production, and consumption. Prices are expected to remain historically high through the end of 2024 as a result of these changes.
crude oil Prices:
In the case of crude oil, the international benchmark, Brent crude oil, is expected to average around $100 per barrel this year. It would be the highest level since 2013.
“We expect prices to fall slightly in 2023 and 2024, but they will remain significantly higher than we previously predicted.” In the case of natural gas, we expect prices to more than double in 2022 compared to last year,” he said in his outlook report.
Furthermore, the big news in food is the expected 40% increase in wheat prices in 2022.
This reflects Russia’s and Ukraine’s importance as exporters. They account for roughly one-quarter of global wheat exports, and the war has disrupted exports from Ukraine in particular.
This is a particular concern for countries in the Middle East and North Africa, he said, because they rely on Russia and Ukraine for a large portion of their wheat imports.
He also mentioned that the price of fertilizers is an important factor in food markets. Fertilizers are made from natural gas, so the rise in natural gas prices has pushed up the price of fertilizers.
Farmers have begun to use fewer fertilizers, which will reduce agricultural yields, especially in developing countries, he added.