The World Bank has made a statement explaining how the ongoing war between Ukraine-Russia has destabilized major commodity markets and caused ripple effects that have altered global patterns and routes of trade, production, and consumption. They warned that estimates indicated that things could reach truly unprecedented highs by the year 2024.
According to the recent report released by the bank titled “Food and Energy Price Shocks from Ukraine War Could Last Years,” the increase in general prices over the past two years had been the highest ever recorded since the 1973 oil crisis. Contributing largely to this are the increases in the price of food items, of which the currently battling Ukraine and Russia are high producers, and fertilizers as well.
“Overall, this amounts to the largest commodity shock we’ve experienced since the 1970s,” said Indemit Gill, the World Bank’s Vice President for Equitable Growth, Finance, and Institutions. “As was the case then, the shock is being aggregated by a surge in restrictions in the trade of food, fuel, and fertilizers.”
Also brought up were energy prices which according to the report were expected to rise by over 50% in 2022. Other commodities like metals and agricultural products are expected to follow suit, each expected to rise by nearly 20% in 2022 as well. All of it with warnings that should the war drag on or additional sanctions be imposed on Russia, prices could rise to even higher heights and fluctuate much more than originally predicted.
