ISLAMABAD: The World Bank is raising its 2017 forecast for crude oil prices to $55 per barrel from $53 per barrel as members of the Organisation of the Petroleum Exporting Countries (Opec) prepare to limit production after a long period of unrestrained output.

Energy prices, which include oil, natural gas and coal, are projected to jump almost 25 percent overall next year, a larger increase than anticipated in July. The revised forecast appears in the World Bank’s latest Commodity Markets Outlook. Oil prices are expected to average $43 per barrel in 2016, unchanged from the July report.

According to the outlook, a modest recovery is projected for most commodities in 2017 as demand strengthens and supplies tighten. Most commodity prices continued to rise in the third quarter from their lows in early 2016.

Agricultural prices are expected to recover modestly in 2017, mostly in response to higher projected energy prices, with some exceptions. Grain prices are projected to increase by 3pc next year, a slightly larger increase than projected in July, and oils and meal prices by 2pc, on top of the 5pc rise this year. Beverage prices are seen dropping by a greater extent on expectation of a large coffee output.

The October 2016 assessments for the 2016-17 season point to a favorable crop. Global production of wheat is expected to reach a new record, at 745 million tonnes, according to the US Department of Agriculture (USDA).

Rice production is projected to increase 4pc in 2016-17, driven by production increases in Asia - particularly China, India, Pakistan, and Thailand.

Published in Dawn, October 22nd, 2016