Agricultural prices are not in a bubble. That’s according to commodity king Jim Rogers who gave an interview to CNBC this morning, reiterating his firm belief that the bull market in commodities is poised to continue and only strengthen over time.
“The best sector that I know in the world economy is going to continue to be commodities,” Rogers said Monday. “We have huge shortages of everything developing. The facts are we are running out of known reserves of everything and shortages are going to get worse,” he added.
With regard to oil prices, Rogers sees no sign of price slippage largely due to the fact that “nobody ‘s discovered a major oil field in over 40 years.”
Despite the unrelenting global appetite for crude, Rogers reminds us that we have a finite amount of the product. What’s more, we “have to have higher oil prices or we’re going to run out of oil,” he concluded.
Despite corn remaining perched at 2 1/2 year highs and the broad index of commodities inching higher in price, Rogers doesn’t appear to think that a sustained pullback awaits.
“Most agricultural prices are still extremely depressed on any kind of long-term basis,” he says. “Sugar has gone up 600% in the past few years, sugar is still 50 per cent below its all time high. Most agricultural products are unbelievably cheap on a long term basis.”
Rogers even turned viewers’ attention to lead in making his point about the strength of commodities. Lead, which “has lost 35 per cent of its demand in the past few decades” has still gone through the roof in the past few years “because the supply has gone down faster than the demand.”
In addition to talking grains, crude oil, and metals, Jim Rogers also heralded the launch of the Rogers Global Resources Equity Index. According to CNBC, the index will track some two hundred global resource companies.