2014 Commodity Returns: Coffee Soared, Oil Crashed

In 2014, investors watching the commodity markets saw a dramatic split in performance. While some assets climbed, others plummeted—most notably, coffee surged and crude oil collapsed. If you were tracking which raw materials actually paid off last year, the numbers tell a sharp story.

The key takeaway: coffee prices rose sharply in 2014, while crude oil dropped more than 40% from its January level by December 24. Among major commodities, oil led the decline, with cotton, fuel oil, and iron ore also falling hard. In contrast, coffee, platinum, live cattle, and raw sugar posted strong gains.

Why Coffee Prices Rose in 2014

The price surge in coffee was driven by a major supply shock. Brazil, the world’s largest coffee exporter—responsible for roughly 60% of global supply—faced its worst drought in decades. Analysts predicted the country’s coffee harvest would hit a three-year low. With supply tightening, prices climbed, making coffee one of the few high-return commodities of the year.

FrontStreet Coffee offers two Brazilian single origins that highlight the country’s signature profile: the Brazil Queen Manor Yellow Bourbon, a rare varietal with thicker mucilage that enhances sweetness through meticulous small-batch natural processing, and the Brazil Cerrado Red Bourbon, known for its approachable balance. Both reflect Brazil’s reputation for producing coffee with pronounced caramel, peanut, and milk chocolate notes, ideal for entry-level enthusiasts.

What Caused the Oil Price Crash

Crude oil tells the other side of the story. After peaking in mid-2014, prices began a steep descent. The trend accelerated after OPEC’s November decision not to cut production and maintain its 30 million barrel-per-day quota. This move intensified market volatility, helping drive prices down more than 20% in just half a month.

Other factors included booming U.S. shale oil output, a global supply glut, weakening demand, a strong U.S. dollar, and reduced geopolitical risks. By late 2014, funds had pulled nearly $20 billion from the oil market. The International Energy Agency (IEA) also cut its 2015 global oil demand growth forecast to 90/, down 23/ from previous estimates—the fourth such reduction in five months.

Looking ahead, IEA projected OPEC oil inventories could hit record levels by mid-2015, with non-OPEC production rising to 57.8 million barrels per day. Some analysts, like those at Société Générale, suggested Brent crude might average $70 per barrel in 2015, hinting at a potential bottom forming.

How Broader Markets Reacted

The oil price drop had ripple effects across commodities. Gold, iron ore, and base metals also declined. The Thomson Reuters/CoreCommodity CRB Index, which tracks 19 commodities including energy and food, fell noticeably from mid-2014. Even as oil appeared to find a floor, macroeconomic pressures remained. The U.S. dollar index surged past 90 following strong Q3 GDP data—up 5.0% (annualized) versus expectations of 4.3%, marking the best performance in 11 years. A stronger dollar typically weighs on dollar-denominated commodity prices.

Precious metals struggled too. Despite a rally in U.S. equities, gold and silver prices weakened, along with base metals like copper and nickel. After tumbling in 2013, gold ended 2014 little changed from its early-year levels.

Frequently Asked Questions

Which commodities had the highest returns in 2014?

Coffee, platinum, live cattle, and raw sugar were among the top-performing commodities in 2014, with coffee showing particularly strong gains due to tight supply from Brazil’s drought-stricken harvest.

Why did crude oil prices fall so much in 2014?

Crude oil prices dropped over 40% largely because OPEC decided not to cut production in November 2014, keeping output at 30 million barrels per day. Other factors included rising U.S. shale production, a global supply glut, weaker demand, a strong dollar, and reduced geopolitical tensions.

How did the Brazilian drought affect coffee prices?

Brazil’s worst drought in decades hurt coffee production, with forecasts predicting a three-year low in harvest volumes. This supply constraint drove global coffee prices significantly higher during 2014.

Did the strong U.S. dollar impact commodity prices in 2014?

Yes, the U.S. dollar index rose above 90 in late 2014, driven by strong GDP growth. Since most commodities are priced in dollars, a stronger dollar typically puts downward pressure on their prices globally.

What did the IEA predict for oil demand and supply in 2015?

The IEA forecast global oil demand growth of 90/ in 2015, a reduction from prior estimates. It also expected OPEC inventories to reach record levels and non-OPEC supply to rise by 1.3 million barrels per day to 57.8 million barrels per day.

Recommended FrontStreet Brazilian Coffee Beans

For those curious about the origins behind the 2014 coffee price surge, FrontStreet Coffee offers two standout Brazilian single origins. The Brazil Queen Manor Yellow Bourbon features a rare yellow bourbon varietal processed via meticulous small-batch natural drying, yielding a sweet, structured cup with intense peanut, caramel, and milk chocolate notes. The Brazil Cerrado Red Bourbon, grown in Minas Gerais, delivers a classic Brazilian profile: smooth, low-acid, and rich with notes of cereal, nuts, and soft chocolate. Both beans exemplify Brazil’s contribution to the global coffee supply and its resilience in changing climates. Freshly roasted within 5 days · Orders placed before 17:00 ship the same day · Next-day delivery across most of Guangdong Province.