Bad News for Pakistan’s Cotton: World Bank Sounds the Alarm

As global output additionally contracts and rising commodity costs put pressure on agricultural markets, according to the World Bank's October 2026 *Commodity Markets Outlook*, pakistan's cotton production is projected to decline by 6 percent in 2026-27.

Key points

• After a 21 percent decline between 2022 and 2025, food commodity rates are projected to rise by 10 percent in 2026 and another 7 percent in 2027.
• As El Niño-related weather conditions curb production in Southeast Asia, palm oil rates are projected to rise by 14 percent in 2026 and 10 percent in 2027.
• The World Bank expects overall commodity rates to rise by 23 percent in 2026, reaching their second-highest level since 2013.
• Coal rates are projected to rise by 25 percent in 2026 before declining by 4 percent in 2027 as demand softens and renewable energy expands.
• The report, drawing on estimates from the US Department of Agriculture (USDA), expects global cotton production to fall by 3 percent in the 2026-27 season.

Meanwhile, the report, drawing on estimates from the US Department of Agriculture (USDA), expects global cotton production to fall by 3 percent in the 2026-27 season. Output is projected to decline by 6 percent in China and Pakistan and by 3 percent in the United States. Brazil and India are projected to record increases of around 1 percent each.

Global cotton consumption, meanwhile, is forecast to growth by 2 percent, reducing the stocks-to-use ratio – a measure of supply relative to demand – to 0.57 from 0.63 at the end of the 2025-26 season. The tighter outlook has already backed costs, with cotton rates rising 6 percent quarter-on-quarter in the third quarter of 2026 and remaining around 20 percent above their year-earlier level. Agriculture Financing Crosses Rs. 1.3 Trillion.

In practice, the World Bank expects cotton rates to rise by 14 percent in 2026, followed by more moderate increases of 3 percent in 2027 and 1 percent in 2028 as production recovers. Global commodity rates set to jump 23 percent.

In practice, the World Bank expects overall commodity rates to rise by 23 percent in 2026, reaching their second-highest level since 2013. While food commodity rates are forecast to rise by 10 percent, energy rates are projected to lead the rise with a 32 percent jump. Rates of metals and minerals are anticipated to reach a record high.

Notably, the outlook reflects a series of overlapping shocks. While the Russia-Ukraine war continues to hamper Black Sea grain and oilseed shipments and constrain Russian oil product production, particularly diesel, the conflict in the Middle East has caused a historic disruption to energy supplies.

In practice, a particularly robust El Niño, projected to persist into early 2027, is additionally threatening agricultural production. Meanwhile, supply constraints and demand from renewable energy infrastructure, electric vehicles and data centers are pushing up rates of a number of industrial metals.

In 2027, overall commodity rates are projected to decline by 7 percent. Nevertheless, the anticipated easing in energy and metal rates will not necessarily translate into lower food costs, with food commodity costs forecast to rise another 7 percent. Imported Wheat Ship Arrives in Karachi. Oil rates anticipated to remain elevated.

Global oil production is projected to fall by more than 5 percent in 2026, with Brent crude projected to average $91 per barrel for the year. The World Bank remarked costs would be even higher if oil demand were not forecast to decline by 2.5 percent – the third-largest annual drop on record after the COVID-19 pandemic in 2020 and the oil crisis of 1980.

Meanwhile, the report expects Brent rates to retreat to $79 per barrel in 2027, assuming no major escalation of the Middle East conflict and a recovery in Russian oil production.

Natural gas markets are additionally anticipated to remain tight. While Japan's liquefied natural gas costs are projected to growth by 67 percent, european natural gas rates are forecast to rise by 58 percent in 2026. Although damage to Qatari LNG infrastructure is anticipated to constrain supplies, both are projected to ease in 2027.

For context, the report warns that a renewed disruption to oil exports could push Brent rates to an average of $105 per barrel in 2027. World Bank Ties $600 Million Loan to Wheat, Sugar Market Reforms. Food and agricultural markets face mounting pressure.

As global production is projected to fall by 2 percent in 2026-27 – the first annual decline in a decade, rice rates are forecast to rise by 10 percent in 2026 and 12 percent in 2027. El Niño is projected to weigh on harvests in major Asian exporters. The forecast assumes that major exporters will not impose restrictions similar to those introduced during the 2023-24 El Niño episode.

Wheat rates are anticipated to rise sharply in 2026 and 2027, reflecting disruptions to Black Sea shipments and hot, dry conditions in the European Union and other producing regions. The World Bank expects some easing in Black Sea trade in 2027, with projected output gains of 11 percent in Russia and 8 percent in Ukraine partly offsetting declines in Argentina, Brazil, the EU and the United States.

After persistent summer heat and drought, the EU's wheat production is forecast to fall by 20 percent to its lowest level in almost two decades.

As El Niño-related weather conditions curb production in Southeast Asia, palm oil rates are projected to rise by 14 percent in 2026 and 10 percent in 2027. While soybean meal rates are forecast to rise by 18 percent and 10 percent, respectively, soybean oil rates are anticipated to jump by 39 percent in 2026 and 11 percent in 2027.

Beverage rates, by contrast, are anticipated to decline by 24 percent in 2026 as coffee and cocoa production recovers from earlier weather- and disease-related losses. Cocoa rates are projected to rise by 10 percent in 2027 as adverse weather and lower pod counts tighten supplies in West Africa. Govt Intends 5-Year Incentives to Boost Kinnow Exports.

Meanwhile, the report remarked the impact of El Niño could be particularly severe for rice, soybeans, palm oil, coffee and cocoa, whose exports are concentrated in weather-exposed countries. Metals and fertilizers remain exposed to supply constraints.

Meanwhile, the World Bank's metals and minerals cost index is forecast to rise by 25 percent in 2026, reaching a new high. Aluminum, copper and tin are projected to record significant gains as supply constraints coincide with growing demand from energy transition projects and advanced technologies.

For context, the index is projected to decline by 3 percent in 2027 as supply conditions improve and new capacity comes online. Copper rates, even so, may remain elevated due to subdued mined supply expansion, including declining ore grades in Chile.

Precious metal rates are forecast to rise by 40 percent in 2026, with gold and silver anticipated to set annual cost records against the backdrop of demand for financial assets that offer protection against geopolitical uncertainty. Rates are anticipated to moderate in 2027.

Fertilizer rates are additionally projected to growth in 2026, partly as of higher energy costs. The report remarked China's climbed urea exports since mid-year had supported dampen costs. Fertilizer rates are forecast to return to around 2025 levels in 2027, assuming lower energy costs and improved access to inputs such as ammonia and sulfur. Global outlook depends on easing conflicts and manageable crop losses.

For context, the World Bank's baseline forecast assumes no major escalation of the Middle East conflict, a recovery in Russian oil production, easing restrictions on Black Sea food shipments and manageable crop losses from El Niño.

Nevertheless, setbacks could keep energy costs elevated and intensify pressure on food markets. While food rates could exceed their 2022 levels, pushing global inflation higher and worsening food insecurity, in an adverse scenario, Brent oil could average $105 per barrel in 2027.

For context, the report additionally highlights how commodity markets are increasingly interconnected during periods of stress. While roughly one-third is linked to shocks in other markets, its analysis finds that around two-thirds of commodity cost volatility is driven by factors specific to individual commodities. While oil has played a greater role in spreading cost shocks since the Middle East conflict began in early 2026, industrial metals and food are the main net transmitters of volatility. Stay Connected with ProPakistani.

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In short, bad News for Pakistan's Cotton: World Bank Sounds the Alarm is the central thread here, and readers can expect follow-up reporting as the picture becomes clearer.