The hard case for investing in soft commodities

The evidence in this case is not hard to find. With prices of bread, milk and many basic foodstuffs on the rise, it makes sense for managers to invest part of their portfolios in agricultural commodities

Evidence of steadily rising prices of foodstuffs is not hard to find. Consumers will have noticed the rise in the price of bread, with major suppliers forecasting that increasing wheat prices will probably lead to further price rises. In fact, prices of most basic foodstuffs are rising, with Tesco having recently agreed a 5p increase in the price it pays to milk suppliers, in the face of rising animal feed prices. If consumers are going to face further food price inflation, it makes sense to for them to have part of their investment portfolios invested in agricultural commodities. This ...