Food - better investment than Gold

Technical Anayst, Vijay L Bhambwani of Vijay@BSPLindia.com

Over the last 24 months, I have been advocating investing in Gold as a safe haven with capital appreciation benefits. Of late, there are emerging opportunities in the commodities space that have the potential to outpace the returns given by Gold over the last 2 years. I am referring to buying food - grains, pulses and edible oils. These opportunities are for the true blue commodities investor with patience and long term view in mind. What is also required is a total disregard for what you hear / read / see around yourselves about these investment opportunities. Opinions that are being brandished around are either from people who would not like us to know the truth (politicians) or from players who are actually non-participants (analysts). For example, when I wrote my piece about asset price bubble a few months ago (carried in DNA Money), a well known money manager called it unduly alarmist and detached from truth. According to him inflation would be under 5 % in India for atleast 2 more years. Food prices would "not run away" and net impact of inflation would be "benign". Asked for his source of information, he quoted an "ideation" session where people get together and write on a white board with black marker pens. The fact that the truth was out there in the subzi mandis was alien to him. I fear similar misconceptions exist in majority of minds as people get swayed by assurances from politicians, media reports about reduction in custom duties on food grain imports and elaborate plans on govt-to-govt import arrangement of rice. The fact that Thailand and Vietnam have stated their inability to export any more rice to build their own buffer stocks seem to have evaded public memory. Ask the filipinos for details!

The analyst is the author of the best selling book - "A Traders Guide to Indian Commodity Markets" - the first technical trading guide for commodity markets in the
country.

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