Food Commodities:
– Commodity Prices
– Soybean
– Wheat
– Corn
– Copper
Sugar:
– Sugar prices spiked in the 1970s
– Soviet Union demand/hoarding
– Futures contracts market manipulation
– Coca-Cola switched to high-fructose corn syrup in 1974
Coffee:
– Coffee price increase in mid-1970s
– Black frost in Brazil in 1975
– 66% of Brazil’s coffee trees killed
– Earthquake in Guatemala in 1976
– Angolan Civil War disrupted coffee production
Gold:
– United States abandoned gold standard in the 1970s
– Gold price increased from $42.22 to nearly $200 per ounce by 1976
Copper:
– Price controls lifted in early 1970s
– Nixon shock led to quick price rises
– Price of copper increased significantly
Coal:
– Coal price increases in 1970s were demand-driven
– United Mine Workers of America strike in 1974 had little impact on prices
– Types of coal: Anthracite, Bituminous, Lignite
– Coal prices appreciated after price controls were lifted
Floating Exchange Rates and Commodities:
– Bretton Woods system failed in early 1970s
– Fixed exchange rates transitioned to floating rates
– Commodity prices became volatile
– Exchange rates: USD/GBP, USD/CAD, EUR/USD, USD/JPY, USD/SEK, USD/CHF
The 1970s commodities boom refers to the rise of many commodity prices in the 1970s. Excess demand was created with money supply increasing too much and supply shocks that came from Arab–Israeli conflict, initially between Israel and Egypt. The Six-Day War where Israel captured and occupied the Sinai Peninsula for 15 years, the Closure of the Suez Canal (1967–1975) for 8 years of that, lead to supply shocks. 66% of oil consumed by Europe at that time came through the Suez Canal and had to be redirected around the continent of Africa. 15% of all maritime trade passed through the Suez Canal in 1966, the year before it closed.
The Yom Kippur War in late 1973 was Egypts attempt at crossing the Suez Canal and taking the Sinai Peninsula back from Israeli occupation. On October 19, 1973 Richard Nixon requested $2.2 billion to support Israel in the Yom Kippur War. That resulted in OAPEC countries cutting production of oil and placing an embargo on oil exports to the United States and other countries backing Israel. That was the start of the 1973 oil crisis.