Why Invest In Agricultural Commodities?
Many factors affect the price of agricultural commodities. A huge factor is low global supplies and growing demand, but there are other variables that affect prices such as weather, natural disasters, world wide growth, changing world diets, currency exchange rates and the development of alternative energy sources. While there are many reasons to invest in agricultural commodities, I will focus here on the three most important macro factors that I believe support a continued bull market in this sector. 1) rising global demand from emerging economies and low worldwide supplies, 2) shifts in world diets 3) greater demand for alternative energy. Growing demand for commodities from fast developing economies, such as China and India, together with low global supplies, have been a huge factor in pushing the prices of commodities higher. Energy and metals indices have risen greatly over the last several years, while agricultural commodities more recently have appreciated. Rising incomes in em
