Commodity prices are set to rise 23% this year, and the World Bank sees relief for energy in 2027, but not for food

Global commodity prices are set to rise 23% this year, their second-highest level since 2013, according to the World Bank’s October Commodity Markets Outlook report (pdf). Energy costs are leading with a 32% jump. Food adds 10%, metals and minerals are heading for an all-time high, and precious metals are on track for a 40% gain. Brent is forecast to average USD 91 / bbl for the year, after touching c. USD 110 in mid-October. That average is below the market: the Bank sees 4Q at almost USD 100, while Brent was USD 115.81 a barrel on 27 October.

The war cut oil, gas, and refined-fuel supply. Diesel and jet fuel climbed far more than crude because refining, not crude, is the bottleneck — and Russia, the obvious stand-in, has damaged refineries of its own. Net diesel exports from Russia and the Middle East fell about 60% y-o-y in September, and other exporters covered only half the gap. And there is little left in the tank: global inventories have dropped about 2.4 mn bbl / d since the war began, leaving OECD government stocks at end-September at their lowest in more than three decades and the US reserve at its lowest since 1982.

Food is the second front: Black Sea attacks pushed grain prices 25% above a year earlier in 3Q; the Bank sees them up 14% this year and 9% in 2027. El Niño is lifting rice and sugar too, and wheat output is set to shrink 3% in 2026-2027.

Metals run on a different engine: supply is tight, and demand comes from renewables, data centres, and tech. The Bank’s metals index is up 25% for the year, and aluminum, copper, and tin have all hit records. Base metal prices edged lower in 3Q while staying near those highs. Precious metals slipped 7% in 3Q 2026 but are up 40% for the year, with gold, silver, and platinum January-September averages up 42%, 71%, and 110%.

SOUND SMART- Commodity markets price the raw inputs of the economy, and they trade each other’s problems. The Bank’s Special Focus tracks 15 commodities from the Bloomberg index in six groups; industrial metals and food pass volatility on most, and oil’s role in that jumped once the war began. A Hormuz problem becomes a diesel, fertilizer, and food problem.

Next year only partly helps. Prices fall 7%, with Brent at USD 79, energy down 12%, and food up another 7%. That assumes the war stays quiet and the El Niño harvest losses stay manageable. If both bite at once, the Bank’s adverse case puts Brent at USD 105 and food prices 12% above their own baseline, past their 2022 level.

MARKETS THIS MORNING-

Asian markets are mixed this morning. Japan’s Nikkei is down around 0.3%, while South Korea’s Kospi is up roughly 1% after shedding 16% in October. MSCI’s broadest index of Asia-Pacific shares outside ​Japan eased 0.4%.

THE CLOSING BELL: TADAWUL-

The TASI fell 0.8% yesterday on turnover of SAR 3.1 bn. The index is down 6.2% YTD.

In the green: Elm (+9.0%), BinDawood Holding (+5.4%), and Sumou Real Estate (+4.7%).

In the red: Saudi Pharma Industries and Medical Appliances (-10%), Alujain (-9.9%), and The Power and Water Utility Company for Jubail and Yanbu (-8.4%).

THE CLOSING BELL: NOMU-

The NomuC rose 0.8% yesterday on turnover of SAR 15 mn. The index is down 7.1% YTD.

In the green: Al Modawat Specialized Medical (+9.7%), Group Five Pipe Saudi (+7.2%), and Molan Steel (+7%).

In the red: Amwaj International (-18.7%), Hedab Alkhaleej Trading (-9.9%), and Saudi Top for Trading (-9%).

CORPORATE ACTIONS-

Gulf General Cooperative Ins. Company is looking to reduce its capital by 58.67% to SAR 124 mn from SAR 300 mn, followed by a SAR 176 mn increase to restore it to SAR 300 mn, according to a Tadawul filing. The proposed increase includes issuing 12.6 mn shares to BlueFive Ins. Arabia through a suspension of preemptive rights, and 5 mn shares through the conversion of debt owed to two major shareholders.

MEANWHILE- Ades Holding shareholders approved a 100% capital increase to SAR 2.26 bn from SAR 1.13 bn through a bonus share issuance, with shareholders receiving one share for every share held, according to another Tadawul filing. The increase will be funded by capitalizing the share premium account to strengthen the company’s capital base and support its long-term growth and expansion plans.