RENOWNED commodities bull Jim Rogers says he sees higher returns from agriculture than other commodities, and has predicted more international turmoil as food prices continue to rise.
Speaking in Sydney yesterday, Mr Rogers said the commodities bull market that started in 1999 had a long way to run, mainly because of a generally lacklustre supply response."Agriculture prices are still, on a historic basis, extremely depressed, and in my view I'll probably make more money in agriculture than other things," the 68-year-old Singapore-based investor and author told The Australian yesterday.
But Mr Rogers, who started the Quantum hedge fund with George Soros before retiring 31 years ago, said he was surprised food inflation was already contributing to unrest in countries such as Tunisia and Egypt.
"I fully expect more social unrest in the world, I fully expect more turmoil, but I didn't expect it to happen this quickly because food prices are somewhat depressed," he said. "It will slow growth but some people are going to benefit -- Brazil's booming, Canada's booming, Australia's booming, you're going to see some people benefit and some people suffer, that's the way the world works."
According to Mr Rogers, there appears no option but for food prices to keep rising, partly to bring in more farmers in developed nations, such the US and Japan, where the average age of those in the industry is 58 and 66 respectively.
He said: "Prices have to go a lot higher to attract capital and labour and management into agriculture or we won't have any food -- all the farmers are going to die, and then what are we going to do?"
Mr Rogers was in Sydney for the Australian launch of Royal Bank of Scotland commodities indices tied to his Rogers International Commodities Index.
The Alabama-born trader said there was little risk to parking money in commodities, even if the global economy started to slow down.
His theory is that if economies get worse, central banks will start printing money, leading to inflation. "When banks and governments start printing money, the best place to be is in physical assets," Mr Rogers said.
Turning to currencies, he believes the Australian dollar and the Chinese yuan are well placed.
"The Australian dollar's going to continue to rise, the Australian economy is going to continue to rise and Australia is going to be the lucky country for at least another decade or so because of commodities demand," Mr Rogers said.
He said he was buying yuan whenever possible because he was convinced it would be the most appealing currency when it was eventually untied from the US dollar.
Mr Rogers was also bullish on copper, gold and oil prices, saying they had further to run.
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