Will soaring food prices hurt agriculture funds?

AGRICULTURE

Joanna Faith talks to agriculture fund managers about how they are positioning their portfolios as soft commodity prices climb.

Managers of agriculture funds often regale investors with the long-term story underpinning the sector. The world’s food demand is soaring thanks to population growth, rising affluence, changing diets and declining arable land and there are plenty of potential investment beneficiaries as companies respond to these challenges. However, the nearer-term trend of soaring food prices is also offering compelling opportunities. Droughts in the US and parts of Eastern Europe have had a devastating impact on crop yields and pushed some agricultural commodity prices, such as corn and soybeans, to r...