While commodities are now breaking their historical price records and advice to invest in gold and oil, agricultural commodities are being forgotten. And that’s a mistake. First, you promise interesting entries now.
Investin advisors advise: “Invest in commodities such as oil, precious metals. Thus, industrial metals are not a significant alternative investment. ”However, agricultural commodities are still forgotten;
So to invest only in oil and gold, when the importance of agricultural commodities rockets is growing? With an empty bar, you are investing in anything.
The reason for the prices of agricultural commodities (grains) continue to rise, there are several. One of them is the steeply rising price of oil, which increases the cost of farms for the production of the genus (sowing, spraying, fertilizing, harvesting and, of course, transport).
The situation on the market of agricultural crops, which is used for the production of components for biofuels, is thus related to the price development on the oil market. In the European Union it is mainly oilseed rape, in the USA it is corn.
The tempting state subsidies to farmers have led farmers to reduce sown areas for food production and specialize in the cultivation of selected crops, which are intended for the production of biofuels. In the USA, for this reason, the sown area of the weevil was significantly reduced in 2007, moreover, during the subsequent non-development of the family, and therefore this year the fall of the American weevil species is at its lowest level in the last 60 years.
The main reason for the rise in agricultural commodity prices is the increasing purchasing power of the population, especially the middle social class in India and n.
If we go to the changes due to the growth of agricultural commodity prices, climate change, ie the impact of weather on the family, as each of us can imagine that the prices of agricultural commodities have no reason to fall. For example, in the case of the penny, due to the apparent development in 2007 in Australia, Canada, the USA, France and Ukraine, there was a decline in the world’s world of pennies.
Therefore, large investment funds still consider investing in agricultural commodities in their portfolios as a good alternative to the falling stock market.
How to invest in agricultural commodities?
You don’t need to have your own silo or own your own fields to trade in crops. It is enough to have a capital of at least a few tens of thousands of Czech crowns at the beginning of the capital. You can invest in traditional derivatives (fixed on the stock market), such as options, forwards and futures, or with the help of investment certificates and warrants.
In a more affordable way, retail investors can trade through Contracts for Difference (CFDs) on the over-the-counter market.
Most of the trade is based on speculation, and you can buy or sell a commodity on the commodity markets, even if we did not own it beforehand.
For more conservative investors, of course, shares of food and processing companies dealing with agricultural commodities are available.
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