Food inventories at their lowest in decades: Jim Rogers

Q: What about something like sugar which has become the talking point across global markets hitting a 28 year high? Do you see those gains being extended looking at the demand-supply situation in sugar?

A: I certainly do. Sugar -even though it is at a 28 year highs, you would probably know it is down 70% from its all time high. So sugar is still very depressed on any kind of historic basis and I suspect it will go higher. The last time we had a bull market in sugar in 70s, if you would remember there was no biofuel - that is a huge new element of demand now and most of Asia was not involved in the sugar market in any big way back in the 70s. But now Asia is prospering and there are 3 billion people trying to have a better life and most people when they get more prosperous, use more sweets. So you have big elements of demand in sugar now that you did not have in the last bull market. I wouldn't sell sugar, I don't know if it is going to go up in the next week or the next month but I am certainly expecting sugar to go much higher during the course of the bull market over the next several years.

Q: In any case many agro commodity prices are going up in India because of a bad monsoon this time around. What is your perspective of the softer commodities, do you think they could be headed significantly higher - the agricommodities - over the course of the next one year?

A: I am not a weather man so I cannot answer the weather problems. As I said food inventories are at the lowest they have been in decades - not lowest in months or years but in decades. There is a very good chance that we are going very serious explosions in the price of food because we may have no food at any price if we continue to have weather problems. Yes you are having some monsoon problems in India but the rest of the world still hasn't had bad weather. If we start having serious weather problems around the world as we have had many times in history, the price of food is going to skyrocket because there are no inventories and there is no productive capacity.

Q: Give us a word on real estate. Have you seen a significant improvement in sentiment towards real estate in the entire region and would you be a buyer of real estate once again after the dip it saw six-nine months back?

A: You are certainly seeing prices go up - I am told prices in China are back to where they were before the big drop. I certainly see prices or more transactions here in Singapore and other parts of Asia - I am not jumping in, I would not be a buyer unless it is specialized real estate if it is in the right location or if it is farm real estate something that is to do with farming or mining. Surely, out of mining area you will make a lot of money. But when interest rates go higher again which they will have to in the next year or two or three, property is going to suffer once again because there is still massive speculation in most property markets.