NEW YORK ( TheStreet) -- Agricultural commodity prices are likely to be on the rise for quite some time, driven by growing demand from emerging global markets, political unrest and an increasingly unpredictable growing environment.
"You've seen caloric intake overall rise in most parts of the world over the last ten, 20 years, and that's a trend that's going to continue," said Jeffrey Christian, managing director and founder of CPM Group, a commodities research and investment firm. "Populations are growing, but financially -- generally speaking -- they're better too, so people can afford more food." Currently India is the biggest consumer of sugar. Food prices are also being driven by speculators. Coffee is one instance of an agriculture commodity that's been receiving a big inflow of speculative money. "Right now they have a relatively large long position and that could help keep the price up for a while," Christian said.
Looking at grains, Deutsche Bank recently came out with a report titled, "Running Out of Corn," in which analyst Michael Lewis said that he views the physical fundamentals of corn as "extremely tight" -- driven by rising Chinese corn shortages and increasing appetite for U.S. corn from the U.S. ethanol industry.