TWN Info Service on UN Sustainable Development (Jul25/08)
23 July 2025
Third World Network

UN: Commodity dependence continues to cripple developing nations
Published in SUNS #10267 dated 23 July 2025

Penang, 22 Jul (Kanaga Raja) — Despite growing recognition that economic resilience depends on diversification and value addition, many countries remain firmly entrenched in commodity dependence, according to UN Trade and Development (UNCTAD).

In “The State of Commodity Dependence 2025” report, UNCTAD said commodity dependence largely affects the most vulnerable groups of countries, with more than 80 per cent of Least Developed Countries (LDCs) and Landlocked Developing Countries (LLDCs), and roughly 60 per cent of Small Island Developing States (SIDS) considered commodity-dependent.

It suggested that this leaves them vulnerable to volatile price fluctuations, fiscal fragility, and delayed structural transformation.

More broadly, two thirds of developing countries – 95 out of 143 – remained commodity-dependent during 2021 and 2023, said UNCTAD.

It said commodity dependence, where a country makes more than 60% of its merchandise export earnings from commodities, is particularly heightened in the Middle and Western Africa countries, most of which earned over a staggering 80% of their export revenues from primary commodities.

Similar patterns were also observed in Central Asia and South America, where resource wealth plays a central role in trade, it added.

UNCTAD warned that without more efforts to diversify economies and add value, countries risk squandering opportunities to translate their raw material wealth into engines of sustainable and resilient growth.

The report provides a detailed statistical profile of 195 UNCTAD member States, tracking changes in commodity export and import structures from 2012-2014 and 2021-2023.

It said commodities exports represent almost one-third of global trade, but their share of total trade has decreased slightly in the past decade.

Between 2012-2014 and 2021-2023, the total value of merchandise trade experienced substantial growth, while the commodity component expanded at a slower pace, leading to a slight shift in the composition of global trade.

The report said that world merchandise trade increased from US$17,305.2 billion in 2012-2014 to US$21,730.3 billion in 2021-2023, representing a 25.6 per cent growth over the period.

At the same time, commodity trade showed a 15.5 per cent increase from US$6,149.2 billion to US$7,105.4 billion, lagging overall merchandise trade by 10.1 percentage points.

These changes in world trade led to a decline in commodity exports as a share of total merchandise trade in value terms from 35.5 per cent to 32.7 per cent, said the report.

It noted that commodities exports can be broadly categorized into three main groups, namely, energy products, mining products, and agricultural products, the latter of which is further disaggregated into all food items and agricultural raw materials.

Energy commodities continue to dominate global commodity trade, reaching US$3,163 billion in 2021-2023, it said.

This represents 44.5 per cent of total world commodity exports, although it marks a decrease from 52.1 per cent in 2012-2014, when energy exports averaged US$3,203.3 billion.

Such a decline was due to a combination of factors, including lower oil prices in the latter period and shifts in global energy consumption patterns. In value terms, this reflects a modest 1.3 per cent decrease over the decade, the report suggested.

It said while Western Asia remains a major player in global energy exports, its share has declined by 6.6 per cent since 2012-2014, currently representing 24.7 per cent of world energy exports, with a value of US$781.0 billion in 2021-2023.

Europe is also a large contributor to global energy exports, with 28.9 per cent of the world total in 2021-2023 and an export value of US$914.1 billion.

It said in the same period, world agricultural export value showed robust growth, rising by 34 per cent, to reach US$2,291.9 billion in 2021-2023.

This sector now comprises approximately one-third of global commodity exports, with food items accounting for approximately 87 per cent of the total agricultural export value, it added.

The report said historically, Europe has accounted for the largest share of agricultural products exports in value terms. Europe has maintained its dominant position in global agricultural exports, with its share holding steady at approximately 42 per cent of world agricultural export value across both time periods.

The report said trade data for Europe also reveals that agricultural exports have become slightly more important within its overall commodity export basket. In fact, this share increased from 35 per cent in 2012-2014 to 40 per cent in 2021-2023.

However, the report said that in the global context, the United States maintains its position as the world’s leading agricultural exporting country in value terms.

With average exports valued at US$192 billion and a 17.2 per cent rise between 2012-2014 and 2021-2023, the United States has consistently accounted for approximately 10 per cent of world agricultural trade.

Meanwhile, minerals, ores and metals contributed 23 per cent of world commodity exports in 2021-2023, with an average value of US$1,650.4 billion, said the report.

The mining sector experienced substantial growth with export values increasing by 33.4 per cent between 2012- 2014 and 2021-2023, it further said.

According to the report, one of the most notable developments during the period 2012-2014 to 2021-2023 is the transition in market leadership from Europe to Asia and Oceania.

Europe held a dominant position in 2012-2014 with 34.7 per cent of world mining exports. While remaining significant in 2021-2023, Europe’s market share declined to 31.9 per cent.

Conversely, Asia and Oceania emerged as the new leader in terms of mining export value, increasing its market share from 33.8 per cent in 2012-2014 to 37.6 per cent in 2021-2023, said the report.

The Asia and Oceania region is the world’s largest source of commodity exports, accounting for 37.1 per cent of world commodity exports in 2021-2023, followed by Europe, the Americas (including the Caribbean) and Africa, it further said.

Within Asia and Oceania, a significant share of the commodity exports originates from Western Asian countries, with the United Arab Emirates and Saudi Arabia accounting for roughly 58 per cent of commodity exports from the region in value terms (and 54 per cent in volumes), it added.

However, it said while all regions saw an increase in the value of commodity exports between 2012-2014 and 2021-2023, Africa experienced a notable decline of 5.6 per cent, with commodity exports falling from US$494.2 billion to US$466.6 billion in 2021-2023.

This contraction was mainly driven by a sharp decline in energy exports, which fell by US$107 billion, offsetting gains in agricultural and mining products, it suggested.

It said that the reduction in energy export earnings reflects both a 20 per cent drop in average oil prices over the period and significant declines in the export volumes from Nigeria, Angola, and Algeria, which are Africa’s three main oil exporters.

A CHALLENGE FOR SOUTH

Commodity dependence remained a significant challenge in global merchandise trade, particularly for developing countries, over the 2012-2014 to 2021-2023 period, said the report.

Although the total number of commodity-dependent countries declined slightly from 106 to 103, this reduction masks a more concerning reality, namely, 99 countries that were commodity-dependent in 2012-2014 remained so in 2021-2023, it added.

Moreover, it said the severity of commodity dependence has persisted, with 73 countries, mostly in Africa and South America, maintaining a share of commodity exports over 80 per cent of their merchandise trade in 2021- 2023, compared with 74 countries in the preceding period.

There were both positive and negative transitions in commodity dependence over the period 2012-2014 to 2021-2023, it observed.

Seven countries, namely, the Comoros, Guatemala, Indonesia, the Islamic Republic of Iran, Myanmar, Palau and Trinidad and Tobago saw the share of their commodity exports to merchandise exports fall below the 60 per cent threshold, it noted.

However, the report said four countries fell into commodity export dependence during the same period, namely, Antigua and Barbuda, Panama, South Africa, and Ukraine.

It further said out of 143 developing nations, 95 were commodity-dependent in 2021-2023, while only eight developed economies out of 52 were in this condition.

It pointed out that commodity dependence follows a significant regional pattern, with notable concentrations in Africa, Central Asia, and South America.

Importantly, the report said that the prevalence in Africa is particularly striking, with 46 of 54 countries (85 per cent) showing commodity dependence during 2021-2023.

It said Middle and Western Africa demonstrate particularly extreme commodity dependence, with 100 per cent of countries in both sub-regions affected, it added.

“More concerning is the intensity of this dependence – 80 per cent in Middle Africa and 75 per cent in Western Africa derive over 80 per cent of their merchandise export earnings from commodities.”

Eastern Africa presents a similarly challenging picture, with 15 of 18 countries (83 per cent) showing commodity dependence, said the report.

Central Asia and South America also show particularly high levels of economic reliance on commodity exports, it added.

In Central Asia, all five countries demonstrate commodity dependence, suggesting a regional economic structure heavily oriented toward raw material exports, it pointed out.

Similarly, it said South America presents an even more pronounced pattern, with all twelve countries classified as commodity-dependent and eleven of these falling into the high dependence category (above 80 per cent).

Commodity dependence also largely affects the most vulnerable groups of countries, with more than 80 per cent of Least Developed Countries (LDCs) and Landlocked Developing Countries (LLDCs), and roughly 60 per cent of Small Island Developing States (SIDS) considered commodity-dependent, the report emphasized.

It also said the geographic distribution of energy export dependence shows significant regional concentration.

For example, out of 103 commodity-dependent countries in 2021-2023, 33 nations rely mostly on energy exports.

Within this group, 25 countries demonstrate high commodity dependence, with energy exports constituting over 80 per cent of their merchandise exports.

The report said that Asia emerges as the primary region in terms of energy export dependence, with 14 countries, particularly concentrated in Western and Central Asia.

In both regions, more than 40 per cent of countries depend on energy exports, with a median dependency rate of approximately 75 per cent of total merchandise exports.

Africa follows as the second most significant region, with 11 energy-dependent countries. Middle Africa showed a particularly high concentration, with six countries heavily reliant on energy exports, it added.

It said that the dependency levels in the region vary considerably in 2021-2023 from Cameroon (53.7 per cent) to Equatorial Guinea (92.4 per cent).

Regional analysis of world commodity dependence on agriculture shows notable concentration. Africa emerges as a key region, with 15 out of 38 countries dependent on agricultural exports, said the report.

This dependency is particularly pronounced in Eastern Africa (with 7 countries out of 15) and Western Africa (6 countries out of 16), it noted.

South America also shows significant agricultural export dependence, with 5 out of 12 commodity-dependent countries in the region relying primarily on agricultural exports and an average dependence of 63 per cent on agricultural products in the sub-region.

The report pointed out that Oceania presents a notable case of agricultural export dependence, with 8 out of 14 nations in this region depending on agricultural commodity exports, with average dependency rates exceeding 75 per cent.

Africa demonstrates particularly strong dependence on mining exports, with 20 countries classified as mining export-dependent, representing over 60 per cent of all mining export-dependent countries globally, it said.

It said within Africa, Western and Eastern Africa emerge as key regions, together accounting for 75 per cent of the continent’s mining export-dependent countries.

It noted that the significance of mining exports in these regions is reflected in their export compositions, with mining products constituting 65 per cent of merchandise exports in Western Africa and 57 per cent in Eastern Africa.

Southern Africa presents a unique case, with three out of five countries classified as commodity dependent – all dependent on mining exports, the report said.

From those three countries, Botswana is the most mining-dependent, with mining products comprising 91.5 per cent of its merchandise export value in 2021-2023, it added. +