Countries which produce commodities have watched in alarm as prices have plummeted recently. But that trend has a long history, according to figures developed by The Economist.

That venerable magazine first published its commodity price index in 1864 -- with figures stretching back to 1845. The magazine's editors think it is probably the world's first regularly published price index.

How have industrial commodities prices trended in the past 150- odd years?

• They have fallen by 80 percent since 1845 -- to a record low.

• Since its most recent high in 1995, the index has fallen by more than 40 percent in dollar terms.

The long decline in prices is the result of two factors:

• A shift in economic output from "heavy metal-bashing industries" to services and information technology means that any given increase in gross domestic product produces a smaller increase in demand for raw materials.

• Technological advances have increased the supply of commodities -- through higher rates of mineral extraction and greater crop yields -- while reducing demand, as plastic has replaced metal or fiber optics have replaced copper wire.

Experts predict that raw materials prices are likely to pick up when the world economy revives -- but not before next year. Over the long term, however, there is little reason to expect prices to reverse their historic declines.

Source: "A Raw Deal for Commodities," The Economist, April 17, 1999.