2021 was marked with new variants of the coronavirus and several supply constraints, all of which drove up the prices of most commodities. Analysts expect these prices to moderate in 2022, as supply is expected to improve across the board. However, any new COVID variants or any other global crises, coupled with the expected tightening of monetary policies, will play a huge role in commodity prices. Let’s look at several commodities and their price outlook for 2022.

1. Oil

Oil prices have been on the high side for most of 2021. OPEC+ has eased on its supply restrictions, and non-OPEC countries are steadily increasing their oil production. This may tip the scales in the oil market, introducing a surplus that will likely drive down prices. However, this surplus is not likely to kick in until the second half of the year, according to the World Bank.

As 2021 comes to a close, analysts expect the average price of crude oils, i.e., Brent, West Texas Intermediate, and Dubai, to come in at $70. Come 2022, and this average is expected to hit $74 as demand for oil grows to levels seen before the pandemic. However, the spread of Omicron makes this demand uncertain, and scales may tip in either direction.     

2. European natural gas

There have been low gas storage levels in Europe throughout 2021, and this is expected to persist come 2022. This shortage will especially be pronounced during the winter as global demand for heating grows. Therefore, natural gas prices will likely remain elevated in the first few months of 2022. A price decline may come at the end of the winter season when demand wanes. However, considering the low reserves will only be lower at the end of the season, prices may remain high throughout most of the year.

3. Aluminum

The supply of most metals is expected to increase come 2022, which suggests that their global prices will decline. Further, the Fed’s decision to taper asset purchases and increase interest rates will lead to a strong US dollar, which will further drive metal prices down. However, aluminum is headed into shortage, as there is little to no investment in its smelting capacity. Though some smelters may try raising their capacity in 2022, it may not do much to dent the supply constraint. Analysts expect Aluminum prices to average $3,000 per ton over the course of 2022.

4. Precious metals

Generally, precious metals prices declined in the latter half of 2021, citing reduced investor confidence. Gold was the outlier, rising in price in the months of October and November, mainly due to low-interest rates. This made it a preferred hedge against inflation by most investors. However, outflows from gold-backed ETFs in North America and tapering of government purchases eventually drove its price down. The uncertainty behind the spread of Omicron may drive its price higher as investors turn to it for its safe-haven status. However, the Fed’s hawkish stance on monetary policy may very well lose gold’s appeal to investors.

Silver prices were driven down by the low industrial demand. This was as a result of low PMI numbers from both China and Japan, who are major producers of products that utilize silver in their production process. Such include electronics, photographic equipment, and solar panels. The recovery of silver relies heavily on global economic recovery. This means the spread of Omicron is likely to pose a threat to this recovery.

Platinum and palladium declined in price as the demand for auto-catalysts went down. This has been largely driven by the global shortage of semiconductors, which drove down vehicle production. These two metals are mainly used in catalytic converters of engines to reduce harmful emissions. Platinum and palladium supply has been boosted by South African production, which has surpassed the shortage caused by outages at two Russian mines. However, if the semiconductor shortage persists in 2022, these two metals’ prices will likely fall further. 

5. Food commodities

The production of maize and soybeans has gone up due to favorable conditions in North and South America. Rice, too has grown in supply as conditions in Asia improve. Wheat supply, however, went down due to waning output from the US and EU. The US Department of Agriculture expects the global supply of grains to grow by 1.7% this season, while that of edible oils is projected to grow by 3%, citing the growing supply of soybeans and palm seeds.

However, the global increase in fertilizer and energy prices poses a threat to the expected lowering of food prices. The surge in energy prices, which happened in Q3 of 2021, drove fertilizer prices up, which is, in turn, exerting upward pressure on food prices come 2022. Further, the Southern hemisphere is undergoing El Nina weather, which could reduce the production of crops native to the region, posing a threat to reducing food prices. However, the Northern hemisphere is expected to increase maize and wheat production this winter.    

Additionally, many countries have announced policies to utilize biofuels in a bid to turn to greener energy sources. If these policies come to effect, it will drive up the demand for foodstuffs, which exerts upward pressure on food commodity prices. 

6. Agricultural raw materials

Cotton prices reached a 10-year high in October 2021, and the demand for them is expected to increase to 36mmt by July 2022. Its supply is expected to rise by 6.4%, while cotton prices are projected to rise by 5% in 2022. 

Natural rubber, on the other hand, has been faced with reduced demand owing to the decrease in vehicle production. This is in turn caused by the global semiconductor shortage. At the same time, the supply of rubber increased by 5.8% from January to October 2021. This recovering supply coupled with reduced demand is likely to drive down rubber prices come 2022. 


The COVID pandemic is likely to keep influencing commodity prices come 2022, as the Omicron variant continues to spread. Further, the scheduled tightening of economic policy by most countries in 2022 is going to affect demand for various commodities, and as a result, their price. Further, if the semiconductor shortage persists, several commodities prices will go down, such as rubber, platinum, and palladium.