EFT Securities - Why The Commodity Super-cycle is Far From Dead

Key Points

• The commodity super-cycle that started in the late 1990s is far from over.
• The combination of substantially higher absolute levels of demand and the increasing scarcity and rising cost of commodity production will force prices higher over the next 10 to 20 years.
• The industrialisation, urbanisation and rising wealth of large population emerging market countries will continue to drive demand higher.
• Although much attention has focused on a potential slowing of China and India growth over the next 10 years, per capita incomes are expected to triple over the coming 20 years, driving substantial increases in per capita consumption of a wide range of commodities.
• The long-term supply of most commodities will remain constrained due to their increasing scarcity and rising costs of production.
• Higher prices will encourage the more efficient use of the world’s scarce resources and incentivise the investment and innovation necessary to boost supply productivity.

By     Nitesh Shah, Associate Director – Research 

         Nicholas Brooks, Head of Research, ETF Securities

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