Prices of most agricultural commodities are expected to fall this year, particularly staple grains like rice, according to the World Bank.
The World Bank said in its latest Commodity Outlook report that prices of grains were expected to slide down by 3.4 percent in 2016.
Prices of oils and meals are seen falling by 2.2 percent, while projections for the prices of farm-produced raw materials suggest a one-percent decline.
The report said a mild recovery in prices was pencilled in for 2017, but even that “is subject to numerous downside risks.”
The World Bank attributed the downtrend to favorable supply conditions. Even with a strong El Niño episode prevailing, the output of some food commodities like wheat and edible oils is expected to reach record levels.
Also, causing the downtrend in prices are the strong American dollar, low energy prices, high stock levels following good harvests, and a weak growth of biofuel production.
Even then, the World Bank warned that weaker prospects for growth in emerging economies—which have been the main sources of commodity demand growth—are weighing down on prices.
“Low commodity prices are a double-edged sword, where consumers in importing countries stand to benefit while producers in net exporting countries suffer,” said Ayhan Kose, director of the World Bank’s development prospects group.