Context

• As countries around the world contend with the health emergency of the COVID-19 pandemic, the economic effects of suspending almost all activity have immediately impacted the world’s commodity markets and are likely to continue to affect them for months to come.
• The pandemic has affected both demand for and supply of commodities, the April edition of the Commodity Markets Outlook reports.
• Those effects are direct, resulting from shutdowns to mitigate the spread of the virus and disruptions to supply chains, and also indirect, as the global response slows growth and leads to what is anticipated to be the deepest global recession in decades.
• The full impact of the pandemic on commodity markets will depend on how severe it is, how long it lasts, and how countries and the world community choose to respond to it. The pandemic has the potential to lead to permanent changes in the demand and supply of commodities, and especially to the supply chains that move those commodities from producers to consumers around the world.

Key Findings:

• Due to mitigation efforts that have limited most travel, oil demand is expected to fall by an unprecedented 9.3 million barrels per day this year from the 2019 level of 100 million barrels per day.
• The halt in economic activity has taken a toll on industrial commodities such as copper and zinc, and metal prices overall are expected to fall this year.
• Most food markets are well supplied. However, concerns about food security have escalated as countries announce trade restrictions that include export bans on certain commodities and engage in excess buying.
• Despite well supplied markets, export restrictions could hurt food security in importing countries. The World Bank has joined other organizations in calling for collective action to keep food trade flowing between countries.
• Commodity-dependent emerging market and developing economies will be among the most vulnerable to the economic impacts of the pandemic.

About Commodity Markets Outlook

• It provides market analysis for major commodity groups – energy, metals, agriculture, precious metals, and fertilizers.
• The report forecasts prices for 46 key commodities, including oil.
• It is published by the World Bank in April and October.