Global prices of agricultural commodities are expected to fall even lower than previously expected amid projections of good harvest and low cost of energy, according to the World Bank.
The World Bank, however, said in its latest Commodity Markets Outlook report that the forecast price for crude oil was raised to $41 a barrel from $37 as the excess in supply started to recede.
The bank said most commodity price indices rebounded in February-March from their January lows on improved market sentiment and a weakening dollar.
For the entire first quarter, average prices fell year-on-year as energy prices dropped by 21 percent and non-energy prices slid by 2 percent.
“Given the recent rebound in oil prices and expected supply tightening in the second half of the year, the crude oil price forecast for 2016 has been raised to $41 per barrel, a drop of 19 percent from 2015,” the bank said in a statement.
Prices of agricultural commodities —including food, beverages and raw materials—“have been revised marginally lower on signs of adequate harvests in major producers and are expected to register a decline of 4 percent from last year,” the bank said.
The World Bank said all main commodity indices that it tracks—energy, non-energy (agriculture, fertilizers, and metals and minerals), and precious metals—were expected to decline this year compared to last year “due to persistently elevated supplies.”