Global commodity prices are expected to decline this year at the fastest clip since the onset of the COVID-19 pandemic, clouding the growth prospects of almost two-thirds of developing economies that depend on commodity exports, according to the World Bank's latest Commodity Markets Outlook report. However, according to the bank's report, a copy of which was obtained by Asharq Al-Awsat, lower prices are expected to bring little relief to the nearly 350 million people worldwide who face food insecurity. Although food prices are expected to decline eight percent in 2023, they will be at the second-highest level since 1975. Moreover, until February of this year, the annual food price inflation rate was 20 percent globally, the highest level over the past two decades. The World Bank's Chief Economist and Senior Vice President for Development Economics, Indermit Gill, said that the surge in food and energy prices after Russia's invasion of Ukraine has passed mainly due to slowing economic growth, a moderate winter, and reallocations in the commodity trade. "But this is of little comfort to consumers in many countries. In real terms, food prices will remain at one of the highest levels of the past five decades. Governments should avoid trade restrictions and protect their poorest citizens using targeted income-support programs rather than price controls," he indicated. According to the World Bank, commodity prices are expected to decline by 21 percent in 2023 compared to last year. Energy prices are also likely to drop by 26 percent this year. The price of Brent crude is expected to average $84 per barrel this year, down 16 percent from the average in 2022. Natural gas prices in Europe and the United States are expected to halve between 2022 and 2023, while coal prices will drop 42 percent in 2023. Fertilizer prices are also expected to decline by 37 percent in 2023, their most significant annual decline since 1974. However, fertilizer prices are still close to their last high, experienced during the 2008-2009 food crisis. For his part, Deputy Chief Economist and Director of the Economic Prospects Group at the World Bank, Ayhan Kose, explained that the decline in commodity prices over the past year has helped reduce global headline inflation. "However, central bankers need to remain vigilant as a wide range of factors, including weaker-than-expected oil supply, a more commodity-intensive recovery in China, an intensification of geopolitical tensions, or unfavorable weather conditions, could push prices higher and reignite inflationary pressures." Despite the significant declines expected this year, prices for all major commodity groups will remain well above their average in 2015-2019. European natural gas prices will hover around three times their average in 2015-2019. Energy and coal prices will remain higher than the average before the pandemic. Lead Economist in the World Bank's Prospects Group, Valerie Mercer-Blackman, stated that metal prices, which increased slightly early in the year, are expected to fall by 8 percent relative to last year, primarily because of weak global demand and improved supplies. "In the longer term, however, the energy transition could significantly lift the demand for some metals, notably lithium, copper, and nickel," she said. The report includes a "Special Focus" section that evaluates the performance of a wide range of approaches to forecast prices of seven industrial commodities (oil and six industrial metals). A key finding of the study is that futures prices, which are widely used in price predictions, often lead to significant errors. Econometric models based on multiple independent variables tend to outperform other approaches and futures prices. The analysis suggests that augmenting model-based forecasting approaches by incorporating the dynamics of commodity prices over time and controlling for other economic factors enhances forecast accuracy.