INTERNATIONAL. Legendary global investor and chairman of Singapore- based Rogers Holdings, Jim Rogers said the lack of supply in agricultural products is especially concerning.
This cycle may last for many years as no one is bringing new supply on stream, Rogers said.
In a Yahoo Finance video clip Rogers explains the reasons he is bullish on agricultural commodities. As he sees it, "most agricultural products are still depressed on a historic basis."
"The story is not over, not for a while," he said.
"I don't see any reason it's going to be over for a few years because no one is bringing new supply on stream."
"A catastrophe is looming," he says. "The world is going to have a period when we cannot get food at any price in some parts of the world.”
Rogers on Rice and Cotton
Rogers believes Rice and cotton prices are likely to soar in the coming decade as prices of agricultural commodities boom because of declining inventories and production disruptions.
“If we start having problems, weather problems, production problems, the price of rice is going to skyrocket over the next decade,” Rogers said in a Bloomberg interview.
"When it happens I don’t know. But I know that the fundamentals are ripe," he added.
Agriculture production needs to expand by 70% through 2050, as the global population rises to 9.1 billion from 6.7 billion, Jacques Diouf, director-general at the United Nations Food and Agriculture Organization, said October 12.
World food production will face increasing competition from the biofuel market “which has the potential to change the fundamentals of agricultural market systems,” with production set to climb by almost 90% over the next 10 years to reach 192 billion liters by 2018, said Diouf.
“Global agriculture will have to cope with the effects of climate change, notably higher temperatures, greater rainfall variability and more frequent extreme weather events such as floods and droughts,” Diouf told a food forum in Rome.
“Rice is a basic food stuff for much of the world,” Rogers said. “We know that inventories are low. I would not buy rice today necessarily. But I expect rice prices to be much higher over the next decade.”
“We have a gigantic problem developing in the agriculture market,” Rogers told Bloomberg.
Increasing demand for biofuel may encourage farmers to switch to corn and other crops from cotton, which would support prices of the fiber, he said.
“When cotton is going to explode in price, I don’t know,” he said. “But I’m sure it will, just as will everything during a bull market.
“I’ve owned commodities since 1998,” said Rogers.
“I still own them all. Some day, I presume, there’s going to be a wild hysteria at the end of the bull market. Hopefully, I’m smart enough to sell if and when that happens.”
Does this mean Rogers is no longer bullish on Gold?
"I am quite sure gold will go over US$2,000 per ounce during this bull market, Rogers said in a Yahoo Finance video clip this week, adding that the yellow metal will continue to rally as the US dollar is on its way to losing status as the world's reserve currency.
"Is it going to happen? Yes," Rogers says. "I don't like saying it [and] I'm extremely worried about it but we have to deal with the facts. America is not getting better [and] the dollar is going to be replaced just like pound sterling [was]."
Still, "I wouldn't buy gold today," Rogers says.
He said he still owns gold though it's not his favorite metal. "Gold is mystical to many people."
I think I'll make more money in other commodities that are more useful and which are cheaper, he said.