We’re not in biblical times, but analysts at Rabobank think we could be at the start of an agricultural commodity supercycle of biblical proportions.
In a recent analysis, the bank covers seven key areas:
- Exporters stocks have fallen rapidly to 7-year lows
- China is importing on a vast scale
- It’s hard to increase supply rapidly
- Adverse weather conditions
- Countries are engaging in food protectionism
- Logistical costs are rising, notably in freight
- Speculators are holding more commodities futures.
The analysts point out that this could lead to a huge rally in prices for soft commodities, it also acknowledges the dark side of such a cycle, growing food insecurity across poor sections of the world.