Commodity prices are skyrocketing globally, pushing up the cost of gas and threatening to exacerbate food insecurity in low-income countries. Agricultural prices are expected to end the year 22% higher compared with 2020, the World Bank has said in its latest report on commodities, and they are projected to decline only modestly next year.

The International Monetary Fund is warning the momentum of the global economic recovery is losing steam in part because of increased infections in middle- and lower-income countries.

The cost of growing food is also rising. Fertilizer costs have shot up 55% since January, with some manufacturers reducing or halting production and contributing to elevated food prices. Some agricultural goods, such as rice, have seen slight price declines from recent highs, the report noted.

Where it will matter: The sustained high prices are punishing for lower-income countries such as Zambia but also for middle-income nations like Argentina and Turkey. United Nations agencies have cautioned that more than 20 countries, including Ethiopia, face soaring levels of acute food insecurity.

The number of people affected by food insecurity has risen from 135 million people before the COVID-19 pandemic to 155 million last year, the World Bank noted in its report.

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Higher inflation, slower growth: For energy-importing nations, the boom in prices for goods such as natural gas could lead to a crippling burst of inflation, eroding the already diminished spending power of citizens hurt by the pandemic.

A secondary effect would be slowdowns in growth, just as the International Monetary Fund is warning about a two-track economic recovery from COVID-19, with lagging growth prospects for much of the world.

Urban planning: The World Bank noted that urbanization has historically led to higher commodity consumption. However, high-density cities have lower per capita energy consumption than less densely populated cities, increasing the importance of urban planning.

High coal and gas prices could also be a boon for alternatives such as solar and wind, with the bank urging nations to invest in renewables.