Report on Agricultural Commodity Price Trends and Implications for Sustainable Development Goals (SDGs)

Q2 2025 Price Analysis and its Impact on SDG 2 (Zero Hunger) and SDG 1 (No Poverty)

An analysis of the second quarter of 2025 reveals a continued downward trend in agricultural commodity prices, posing complex challenges to the achievement of Sustainable Development Goal 2 (Zero Hunger) and SDG 1 (No Poverty). While lower food prices can enhance food access for vulnerable populations, they simultaneously threaten the livelihoods of smallholder farmers, a key demographic in the fight against poverty.

• The World Bank’s agricultural price index declined by nearly 7 percent since the beginning of 2025.
• Food prices within the index fell by 7 percent.
• Beverage prices experienced a significant drop of 13 percent.
• Raw material prices saw a marginal 1 percent decrease.

Projections indicate a continued decline through 2025 and 2026, which could exacerbate income instability for agricultural producers in developing economies, undermining progress towards SDG 1.

Macroeconomic Headwinds and their Connection to SDG 8 (Decent Work and Economic Growth)

Weakening global economic growth, a central theme for 2025, directly impacts the stability of commodity markets and progress on SDG 8 (Decent Work and Economic Growth). Slower economic activity, particularly in emerging markets and developing economies (EMDEs), curtails demand and suppresses prices, affecting economic vitality in agriculture-dependent nations.

• Global growth is projected to slow, driven by rising trade barriers and policy uncertainty.
• Growth projections for EMDEs, which are crucial to both commodity production and consumption, have been revised downward to an average of 3.8 percent for 2025-2026.
• This slowdown leads to weaker demand, especially for commodities with higher income elasticities like raw materials and edible oils.
• Broader macroeconomic factors, such as U.S. dollar fluctuations and interest rates, influence production costs and capital access, further impacting the economic viability of the agricultural sector.

Risks to Global Food Systems and SDG Alignment

The outlook for agricultural markets is subject to significant risks that threaten the foundations of several SDGs, including SDG 2 (Zero Hunger), SDG 12 (Responsible Consumption and Production), and SDG 13 (Climate Action). These risks require a multi-faceted policy response to ensure resilient and sustainable food systems.

1. Short-Term Risks: Immediate threats could disrupt price trajectories and impact food security and farmer incomes.
   • Fluctuating input costs.
   • Trade disruptions and geopolitical tensions, which challenge SDG 17 (Partnerships for the Goals).
   • Extreme weather events, especially heat waves, directly linking to the urgency of SDG 13 (Climate Action).
2. Long-Term Challenges: Structural shifts are poised to reshape global agricultural markets, with profound implications for sustainability.
   • Changing climate patterns present a systemic threat to agricultural productivity and food security (SDG 2, SDG 13).
   • The increasing diversion of food commodities for biofuel production raises critical questions about resource allocation and competition with food supply, directly engaging SDG 12 (Responsible Consumption and Production).

Analysis of Sustainable Development Goals (SDGs) in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 2: Zero Hunger

   • The article’s primary focus is on agricultural commodity prices, including a “World Bank’s agricultural price index” and specific price drops for food, raw materials, and beverages. This directly relates to food affordability and market stability, which are central components of achieving Zero Hunger.

2. SDG 8: Decent Work and Economic Growth

   • The text explicitly discusses the slowdown of “Global economic growth” and provides specific growth projections for “emerging markets and developing economies (EMDEs).” It links this slower economic activity to weaker commodity demand and lower prices, highlighting the interconnectedness of global economic health and the agricultural sector.

3. SDG 13: Climate Action

   • The article identifies “extreme weather events—especially heat waves” and “changing climate patterns” as significant risks and long-term influences that could reshape global agricultural markets and affect price trajectories. This connects the stability of the food system directly to climate-related challenges.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Target 2.c: Adopt measures to ensure the proper functioning of food commodity markets and their derivatives and facilitate timely access to market information, including on food reserves, in order to help limit extreme food price volatility.

   • The article’s discussion revolves around the volatility of agricultural prices. It mentions a “downward trend,” a “7 percent” drop in the price index, and various risk factors (geopolitical tensions, trade disruptions, weather) that cause price fluctuations. The entire analysis of the agricultural price index aligns with the goal of monitoring and ensuring the proper functioning of food commodity markets.

2. Target 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 per cent gross domestic product growth per annum in the least developed countries.

   • The article directly addresses this target by reporting on economic growth projections. It states that growth in “emerging markets and developing economies (EMDEs)—is expected to average 3.8 percent in 2025 and 2026,” which is a key metric for assessing progress toward sustained economic growth in these regions.

3. Target 13.1: Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries.

   • This target is relevant because the article points to climate-related hazards like “extreme weather events—especially heat waves” and “changing climate patterns” as major risks to agricultural markets. The impact of these events on commodity prices underscores the need for resilience and adaptive capacity within the global food system.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. Indicator 2.c.1: Indicator of food price anomalies.

   • The article explicitly provides data for this indicator by referencing the “World Bank’s agricultural price index” and its movements. The statement that the index dropped “nearly 7 percent since the start of the year” and the breakdown of price falls for food (7%), raw materials (1%), and beverages (13%) are direct measures of food price changes and potential anomalies.

2. Indicator 8.1.1: Annual growth rate of real GDP per capita.

   • The article provides a direct measure related to this indicator. It projects that “Global economic growth is projected to slow in 2025” and specifies that growth in “emerging markets and developing economies (EMDEs)—is expected to average 3.8 percent in 2025 and 2026.” This percentage is a direct measurement of economic growth for a key group of countries.

3. Implied Indicator for Target 13.1: Impact of climate events on agricultural price stability.

   • While not a formal UN indicator, the article implies that the stability of the agricultural price index can be used as an inverse indicator of resilience to climate events. The text states that “extreme weather events—especially heat waves” and “changing climate patterns” are risks that “could affect price trajectories.” Therefore, measuring the volatility of commodity prices in response to such events serves as an implied metric for assessing climate resilience in the agricultural sector.

4. Table of SDGs, Targets, and Indicators

Source: blogs.worldbank.org