Commodities had their biggest annual decline in five decades as demand for energy, metals and grains tumbled in the second half of last year because of the recession.
In 2008, the worldwide economy crumbled. Home prices plummeted, investment banks collapsed, and credit froze. U.S. consumer spending plunged, pushing U.S. automakers to the brink of bankruptcy. Growth in China and other emerging markets withered.
From July to December, the slumping economy drove crude oil, gasoline, copper, corn and wheat down from records in the first half.
For the year, the Reuters/Jefferies CRB Index of 19 raw materials fell 36 percent, the most since the gauge debuted in 1956, to 229.54. It rose to a record 473.97 on July 3. On Dec. 5, the measure dropped to its lowest level since August 2002.
“Macroeconomically, we’re in a free-fall,” said John Brynjolfsson, managing director and chief investment officer at hedge fund Armored Wolf LLC in Aliso Viejo, Calif. “That’s a complete destruction in industrial production and demand, and this is likely to keep pressure on the commodity sector in general.”
In 2008, 15 prices dropped in the CRB, led by gasoline and nickel. Only four climbed, paced by cocoa.
Cocoa climbed 31 percent, the biggest increase. Sugar, gold and hogs also posted gains.
Gasoline futures declined to $1.0082 a gallon on the New York Mercantile Exchange. Crude-oil futures tumbled a record 54 percent to $44.60 a barrel on the Nymex.
