Top bankers encourage agricultural investors
Swiss global financial services company, UBS, says farm commodities are a better bet than gold or shares, due to growth in world population and emerging market wealth. Rabobank has predicted stocks of many crops to rebuild, but said that produce prices must stay high to encourage farmers to expand production, amid political risks and higher production costs, and growing demand in emerging economies.
Political risk was heightened, with the threat of agriculture becoming a pawn in the US election campaigns, and the world’s growing reliance for supplies on areas such as the former Soviet Union and South America, which have a history of intervention in the agriculture sector. There was, for instance, a “very real risk” that Argentina or Brazil, which have critical places in world food trade, could introduce policies in response to rising domestic demand. Meanwhile, dearer fertiliser, fuel and seeds would also limit falls in agricultural commodity prices.
