Are Real Commodity Prices at multi-century Lows?

Saturday, September 03, 2005 | 02:15 PM

The graph below, courtesy of BHP Billiton CEO Chip Goodyear, was compiled from a variety of sources, including the US All Commodities Producer Price Index, US Consumer Price Inflation, US Bureau of the Census, Historical Statistics of the United States, and the Colonial Times, to 1970.

A small move on the graph represents several decades. According to the graph's creator, "we find ourselves at a period of time which is, or rather close to it anyway, 2001/2002 when real commodity prices were the lowest they’ve been in the last 200 years which essentially puts them at the lowest price they’ve been in known history.”

click for larger graph


Chart courtesy of Mineweb


The  International Monetary Fund reached a similar conclusion -- two years ago.

Cycles in Real Price of Industrial Commodities, 1862–1999

click for larger graph

Chart courtesy of IMF

Notes: Shaded portions denote the boom phase, and unshaded portions the slump phase, of each
commodity-price cycle. A boom (slump) is defined as a sequence of absolute increases (decreases) in the real price of industrial commodities.


Nominal and Real Price Indexes Industrial Commodities, 1862–1999
click for larger graph



Chart courtesy of IMF

The graph everyone’s talking about
Barry Sergeant
Mineweb, '25-AUG-05 11:00

The Long-Run Behavior of Commodity Prices: Small Trends and Big Variability
2002 International Monetary Fund

Saturday, September 03, 2005 | 02:15 PM | Permalink | Comments (2) | TrackBack (0) add to | digg digg this! | technorati add to technorati | email email this post



TrackBack URL for this entry:

Listed below are links to weblogs that reference Are Real Commodity Prices at multi-century Lows? :


Understandably we tend to focus our attentions on the west, as is evident on all the charts shown above, but the commodity bull market is driven by the new industrial revolution in the Far East. This is a much more significant event than most Westerners realise, with mind boggling numbers (3 billion people are involved). In the absence of any major global event to stop it, I believe that it will be as significant as our industrial revolution.
It is creeping up on us slowly. Commodity prices are rising rapidly from their low base, but improvements in agriculture and the low cost of manufactured imports are hiding the effects.
I think that this will be a short lived interlude. Improving living standards and strengthening currencies in the growth regions will inevitably push up the cost of imports whilst commodity prices will continue to rise.
This globalisation scenario doesn’t bode well for those of us who wish to maintain our standards of living, but it’s something that we are going to have to come to terms with.

Posted by: John East | Sep 3, 2005 5:47:23 PM

The comments to this entry are closed.

Recent Posts

December 2008
Sun Mon Tue Wed Thu Fri Sat
  1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31      


Complete Archives List



Category Cloud

On the Nightstand

On the Nightstand

 Subscribe in a reader

Get The Big Picture!
Enter your email address:

Read our privacy policy

Essays & Effluvia

The Apprenticed Investor

Apprenticed Investor

About Me

About Me
email me

Favorite Posts

Tools and Feeds

AddThis Social Bookmark Button

Add to Google Reader or Homepage

Subscribe to The Big Picture

Powered by FeedBurner

Add to Technorati Favorites


My Wishlist

Worth Perusing

Worth Perusing

mp3s Spinning

MP3s Spinning

My Photo



Odds & Ends

Site by Moxie Design Studios™