World Bank sees commodities 23% pricier. Did your budget plan for it?

The raw materials bill looks set to rise all at once, and on several fronts. On October 28, 2026, the World Bank published the new edition of its commodities report, projecting a 23% rise in prices in 2026. For decision-makers, the question is not whether the shock reaches the cash flow, but when and through which door.

What happened

The report points to energy as the main driver: a projected 32% increase in 2026, after three years of decline. Brent crude is expected to average $91 a barrel for the year, against $69 in 2025. The cause lies in supply. The World Bank estimates a 5.2% drop in global oil supply in 2026, while consumption is expected to fall 2.5%. With supply below consumption, global inventories have been drawn down since March, at about 2.4 million barrels a day.

The rest of the basket follows suit. Food is expected to rise about 10% in 2026 and another 7% in 2027. For 2026, the projections call for a 14% rise in fertilizers, 25% in metals, with aluminum, copper and tin at record levels, and 40% in precious metals. For 2027, the baseline projection is a 7% decline in the overall index.

Why it matters

Isolated price shocks are usually absorbed, because one input goes up, another goes down and margins get some breathing room. What the report describes is different. Energy, food, fertilizer and metals are rising at the same time, and the World Bank itself notes that volatility spillovers between these markets intensify in periods of stress. In practice, a company's natural cost diversification stops working precisely when it is needed most.

Then there is the lag. The price of a barrel takes weeks to reach diesel, months to reach freight and supplier contracts, and a full budget cycle to reach the final price. Anyone watching only the monthly results sees the problem late.

What changes for you

Owner. If the 2026 margin and the 2027 budget were built on stable costs, the report contradicts those assumptions. It is worth rerunning the scenario with higher energy and freight costs and seeing how much profit is left. If the answer is alarming, the time to act is now, before quarter close.

Sales leaders. Passing on costs is a negotiation, and negotiation needs an argument and a timeline. A long contract with no adjustment trigger becomes a silent loss, and a price list that changes without warning burns relationships. The middle path is to communicate early, based on public data, and offer options: a commitment period with a locked price, or an indexed adjustment.

Operations leaders. The target is the list of most exposed items: fuel, freight, packaging, metal inputs, electricity. For each one, know who the supplier is, how it adjusts prices and whether there is an alternative. A strategic stockpile of a critical input may be worth more than the cost of carrying it.

What changes in Brazil

Brazil sits on both sides of the table. The report names the country among the producers expanding oil supply: Argentina, Brazil, Canada, Guyana and the United States are expected to add a combined 1.5 million barrels a day in 2026. For the oil and gas chain and those who serve it, this is a cycle of firm demand. The World Bank also attributes the growth in Latin American oil consumption mainly to Brazil.

On the other side, agribusiness uses fertilizer priced on the international market, and freight transport depends on diesel. Fertilizer 14% more expensive pushes up the cost of the next harvest, and pricier fuel makes all logistics more expensive. For companies that sell to agribusiness, the effect is mixed, because higher agricultural commodity prices improve farmers' income, but expensive inputs squeeze their cash before the harvest.

The play

1. Review contracts within the next 30 days. Identify which sales and purchase contracts have an adjustment clause, which index they use and when the trigger kicks in. Renegotiate the ones without a clause first.
2. Separate structural costs from shock costs. The baseline projection calls for a decline in 2027. A temporary pass-through, with a clear timeline and criteria, retains customers better than a permanent price-list increase.
3. Lock in what is critical. Where a supplier is willing to sign a fixed-price contract for key inputs, compare the cost of that protection with the risk of the adverse scenario.

The other side

The World Bank's baseline scenario is a projection, and it assumes no significant escalation of the conflicts affecting supply. If tensions ease, prices may fall sooner than expected, and those who locked in expensive contracts bear the cost. In an escalation, the report itself outlines a scenario with Brent averaging $105 in 2027 and food 12% above the baseline.

There is also the limit of the average. An index that rises 23% hides opposing moves, and iron ore, for example, weighs on the metals index because of weak construction activity, especially in China. Each company needs to look at its own basket of inputs rather than the aggregate number. The report shows the direction, and each business still has to do its own math in-house.