But in a recent multi-asset report from ETF Securities, Nitesh Shah, associate director of research at the firm, points to the intensifying El Niño conditions as a driver for higher agriculture prices.
He notes: “Cocoa rose 5.4 per cent as El Niño drives dryness into west Africa where the majority of the world’s cocoa is grown. US corn is currently vulnerable to weather changes.”
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While agriculture may be an uncorrelated asset class that appeals to many investors, they should not overlook the weather, company and sectorial risks to which these commodities are exposed.
Nyree Stewart is features editor at Investment Adviser
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