2014 Commodity Returns: Coffee Soared as Oil Crashed

In 2014, investors watching the commodities market saw a stark split: while some assets plunged, others delivered outsized gains. For coffee drinkers and traders alike, the year stood out—not for volatility in their morning cup, but for a dramatic surge in global coffee prices that defied the broader downturn.

The key takeaway? Coffee prices rose sharply in 2014, making it one of the best-performing commodities, while crude oil suffered its worst annual loss, down over 40% from its early-year highs by December 24.

Why Coffee Prices Rose in 2014

The coffee market’s strength in 2014 stemmed from a severe supply shock. Brazil, the world’s largest coffee exporter, faced its worst drought in decades. Analysts projected the country’s coffee harvest would hit a three-year low, tightening global supply. That scarcity drove prices higher, turning coffee into one of the few high-return commodities that year.

The Oil Price Crash: Causes and Consequences

Oil took the opposite trajectory. After peaking in mid-2014, crude prices entered a steep decline. The trend accelerated after OPEC’s November decision to maintain production at 30 million barrels per day, refusing to cut output despite falling prices. Additional pressures included surging U.S. shale oil production, a global supply glut, weakening demand, a strong U.S. dollar, and reduced geopolitical risks. By late 2014, oil had lost more than 40% of its value from the start of the year.

The sell-off was brutal: nearly $200 billion exited the crude market between June and December, according to industry estimates. The International Energy Agency (IEA) further downgraded its 2015 global oil demand growth forecast to 90/ (900,000 barrels/day), marking the fourth reduction in five months. IEA also warned that OPEC inventories could swell to record levels by mid-2015, with non-OPEC production rising to 57.8 million barrels/day.

Broader Commodity Market Trends in 2014

Beyond coffee and oil, 2014’s commodity landscape was mixed. Cotton, fuel oil, and iron ore suffered steep declines, joining oil in negative territory. But the winners included not just coffee, but also platinum, live cattle, and raw sugar. The Thomson Reuters/Core Commodity CRB Index, which tracks 19 major commodities including food, energy, and metals, showed broad declines from mid-2014 onward. Even gold and base metals like copper and nickel weakened as the U.S. dollar strengthened and equity markets rallied.

Yet, there were signs of stabilization. French bank Société Générale forecasted an average Brent crude price of $70 per barrel for 2015, hinting at a potential floor. Meanwhile, strong U.S. GDP data—5.0% annualized growth in Q3, the best in 11 years—boosted the dollar past 90, raising fresh concerns for dollar-denominated commodities.

Frequently Asked Questions

What caused coffee prices to rise in 2014?

Coffee prices surged in 2014 due to a severe drought in Brazil, the world’s top coffee exporter. Analysts expected the country’s coffee harvest to fall to a three-year low, reducing global supply and driving prices higher.

Why did oil prices crash in 2014?

Oil prices fell over 40% in 2014 due to a combination of factors: OPEC’s decision not to cut production, surging U.S. shale oil output, weakening global demand, a strong U.S. dollar, and reduced geopolitical tensions. The November OPEC meeting, where the group maintained its 30 million barrel/day target, accelerated the decline.

Which commodities performed well in 2014?

In 2014, coffee, platinum, live cattle, and raw sugar were among the best-performing commodities. These gained value while others like oil, cotton, fuel oil, and iron ore declined sharply.

How much did oil prices drop in 2014?

By December 24, 2014, crude oil prices had fallen more than 40% from their early-year highs.

What was the impact of the strong U.S. dollar on commodities?

The strong U.S. dollar, fueled by robust U.S. GDP growth (5.0% in Q3 2014), put downward pressure on dollar-denominated commodities, contributing to declines in gold, base metals, and other raw materials.

Did coffee outperform other commodities in 2014?

Yes, coffee was one of the few commodities to deliver strong returns in 2014, benefiting from tight supply due to Brazil’s drought, while most other commodities like oil and metals saw losses or modest gains.

Recommended FrontStreet Coffee Beans for Coffee Traders

For those tracking coffee market trends, FrontStreet Coffee’s Ethiopia Yirgacheffe offers bright citrus and floral notes, while Colombia Huila presents balanced caramel and nuttiness—both single origins reflecting quality-driven demand. Freshly roasted within 5 days · Orders placed before 17:00 ship the same day · Next-day delivery across most of Guangdong Province.