West Asia Conflict To Have Lesser Impact On Global Food Commodity Prices -- World Bank

By Nur Athirah Mohd Shaharuddin

KUALA LUMPUR, May 29 (Bernama) -- The World Bank Group says the effect of the West Asia conflict on global food commodity prices in 2026 and 2027 is expected to be smaller compared to the early stages of the Russia-Ukraine conflict under the baseline assumption that supply disruptions in West Asia ease by mid-year.

In its April 2026 Commodity Markets Outlook report, the bank, however, said the food price index is projected to edge up by two per cent in 2026 and by one per cent in 2027 year-on-year, representing an upward revision of three percentage points for both years relative to January 2026 projections.

The report, which was released recently, was shared on the World Bank’s X account here today.

The World Bank said the West Asia conflict is affecting food prices mainly through higher energy and fertiliser costs, though some spring season fertiliser purchases were secured before the conflict. 

“Grain prices are projected to rise by two per cent in both 2026 and 2027, driven mainly by higher wheat and maize prices.

“Global wheat and maize production are expected to edge down in 2026-2027, after supplies improved and stocks-to-use ratios rose in 2025-2026,” it said,

As a result, wheat and maize prices are both forecast to increase by four per cent in 2026, followed by additional gains of three per cent for wheat and one per cent for maize in 2027, it added.

Besides, the World Bank said the fertiliser price index is projected to increase by more than 30 per cent in 2026, supported by higher input costs -- particularly for nitrogen- and phosphate-based fertilisers -- and by resilient demand.

“The increase, however, remains well below the sharp spikes of 2021 and 2022 of over 100 per cent and 55 per cent, respectively,” it said.

Meanwhile, both palm oil and soybean oil prices are forecast to rise by eight per cent in 2026 and remain steady in 2027.

It noted that the export supplies of edible oils are expected to be constrained in 2026 by higher domestic use of soybean oil and palm oil for biodiesel in major exporting countries, in part due to conflict-related oil supply disruptions in West Asia.

“However, continued growth in edible oil production and comfortable stock-to-use ratios are likely to curb price increases,” it said.

On natural rubber prices, it said prices are projected to rise by more than seven per cent in 2026 and increase slightly further in 2027 as steady demand growth continues in emerging market and developing economies.

-- BERNAMA