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Commodity - Agricultures and Soft Commodities

Long term investments remain positive in agriculture. Despite droughts in the US, farm incomes are projected to reach record highs in 2014.

Agriculture and soft commodities are used to refer to commodities that are grown as opposed to mined or drilled. Sugar, coffee, wheat, soy and rice account for a large percentage of diets worldwide for most developing countries.

The Global population continues to increase both its size and wealth and there are strong implications on agriculture and soft commodities. Firstly, developing and expanding cities and mass migration automatically suggest a decrease in workable land for farming, less agricultural workers and therefore less soft commodities grown meaning less supply coming into the market. When the global population grows there are not only more mouths to feed, but as countries develop as does their wealth it creates more demand for meat, which is less efficient use of the arable land.

The energy market also impacts the soft commodities because ethanol and bio-fuels threaten to become a realistic alternative to fuels derived from crude oil.

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