World Bank expects record high commodity prices to continue

Written by The Frontier Post

MOSCOW (RIA Novosti): Commodity prices will remain at historically high levels until 2024 due to the situation around Ukraine, follows from the report of the World Bank (WB).
“The situation in Ukraine has dealt a severe blow to commodity markets, changing global patterns of trade, production and consumption in such a way that prices will remain at historically high levels until the end of 2024,” the report says. Moreover, in the event of a more protracted conflict or additional anti-Russian sanctions, prices may turn out to be even higher and more volatile.
The increase in energy prices over the past two years has become the strongest since the 1973 oil crisis, according to the report. The WB believes that energy prices will rise by more than 50% in 2022 and then fall in 2023 and 2024. Brent oil is expected to average $100 per barrel in 2022, with the average price dropping to $92 in 2023. Prices for natural gas will double this year, and for coal – by 80%.
The World Bank expects prices for non-energy goods to rise by about 20% in 2022. At the same time, the greatest growth will be noted among goods, the key exporters of which are Russia and Ukraine. In particular, wheat prices could rise by 40% this year, reaching a record high. Rising prices for fertilizers could lead to a reduction in their use, which in turn will lead to lower yields of some crops. In 2023, while prices will remain high, they may drop slightly as shipments from Argentina, Brazil and the US are likely to increase.
Metals will rise in price by about 16% in 2022 and fall slightly in 2023. In particular, the cost of nickel and aluminum will rise by 52% and 38%, respectively, which “reflects the huge role of Russia as a supplier in these markets.” At the same time, restrictive measures introduced in China due to the coronavirus could reduce demand for metals and keep prices down.
Gas prices in Europe jumped to $1,184 per thousand cubic meters: Gas prices in Europe jumped sharply on the information that appeared in the media about the suspension of Russian supplies to Poland, now they are close to $1,095 per thousand cubic meters, growing by more than 6%, according to the London ICE exchange.
The Polish news portal Onet, citing sources, claims that Poland has stopped receiving Russian gas under the Yamal contract. Information about the termination of Russian gas supplies to Onet was unofficially confirmed by both government sources and the Polish concern PGNiG, the portal also claims.
He also unofficially reports that last Friday the deadline for paying for gas in Russian rubles expired. Onet writes that a crisis headquarters has gathered at the Polish Ministry of Climate and Environment.
Gas prices in Europe, against the backdrop of news about the suspension of supplies from Russia, sharply accelerated their growth rates, jumped from $1,005 to $1,080 in a few minutes. Quotes after a slight decline rose again and reached 1183.8 dollars. So far, this is the price maximum of trading.
Earlier Tuesday, the government’s commissioner for strategic energy infrastructure, Piotr Naimsky, said Poland would not pay for Russian gas in rubles.
On March 23, Russian President Putin announced the transfer of payment for natural gas supplies to the EU countries and other states that have introduced restrictive measures against Russia into rubles in order to stop using dollars and euros in calculations.

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