Commodity Prices Kept Slowing in 2013 but Still Strong Overall


Global commodities markets fell an average of almost 9 percent in 2013, continuing a slowdown that began in 2012.1(See Table 1.)  The decade prior to 2012 has been called part of a “super-cycle,” a 10–35 year trend of rising commodity prices.2 Previous super-cycles include U.S. economic expansion at the end of the nineteenth century and Europe’s post-war reconstruction.3

Commodities Table 1

This third cycle has been defined by the surging growth of China since the turn of this century.4 Since China decided to shift from an export-led growth model, which requires a great deal of natural resources for production, to a model based on internal investment and consumption, the super-cycle has been expected to slow. And it has. But despite this shift as well as geopolitical uncertainty and increasing weather events and prolonged drought, commodity prices fell marginally in 2013, suggesting that perhaps the super-cycle has been and continues to be driven by other substantial global factors.5

Commodities markets are composed of physical goods and raw materials that are bought and sold in large quantities on exchanges around the world. Oil, gold, and agricultural markets traditionally account for the highest volume of trading, but other important assets such as metals, foodstuffs, timber, and fertilizers are also included. (See Figure 1.)

Commodities Figure 1

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