We have COVID. We have inflation. We have the war.
We have inflation speeding up.
This energy shock is hitting countries around the world.
Energy and food prices, as well as some of the metals going up. Fertilizer prices going up.
What we've seen is a surge in commodity prices following the invasion of Ukraine. And that largely reflects the fact that both Russia and Ukraine are large commodity exporters. But even before this, we had seen a rally in commodity prices as economies opened up following COVID-19 lockdowns. And we also had some supply disruptions in several commodity markets.
So we expecting energy prices to rise by about 50% in 2022 compared to last year. So a large increase. And particularly in the case of crude oil – the price for Brent crude oil, the international benchmark is expected to average about $100 a barrel this year. And that would be its highest level since 2013. We expect prices to decline a bit in 2023 and 2024, but they are expected to remain much higher than we had previously anticipated. Now in the case of natural gas, we're actually expecting prices to double in 2022 compared with last year.
So for food, the big action is in wheat prices, where we expect a 40% increase in 2022. Now that reflects the importance of Russia and Ukraine as exporters. Together they account for around one quarter of global wheat exports and particularly exports from Ukraine have been interrupted by the war. Now this is a particular issue for countries in the Middle East and North Africa since they rely on Russia and Ukraine for a very large share of wheat imports. The other important aspect in food markets is the price of fertilizers. Fertilizers are made from natural gas and so the surge in prices we've seen in natural gas has also pushed up the price of fertilizers. And a key risk that we're watching is that farmers start to use fewer fertilizers, and that will reduce agricultural yields, particularly in developing countries.
For the everyday consumer, this means higher prices when they go to fill up at the pump, as well as higher prices at the grocery till. Now for the poorest households, it's particularly bad because they spend a larger share of their income on food and energy. And so they're particularly vulnerable to these increases in prices.
Video by Paul Blake