"It is characterised first and foremost by a secular boom in commodities with decreasing ratios of stock to consumption, inelastic demand, and prices vulnerable to supply shocks across the board,” he added.
Waugh focused on the agricultural sector where, in commodities such as sugar, soybean and rice, developing nations are increasingly challenging world trade policies through a unified approach. He also pointed to climate change and its heightened volatility as playing a greater role in supply prices and the demand for alternative fuel products than in previous years. Finally, changes in technology have increased demand in certain markets.
Other speakers at the event in New York included Hilary Till, co-founder of Chicago-based Premia Capital Management, a proprietary trading and research firm and Kenneth Armstead, chief investment officer of Absolute Plus Management, a New York-based multi-strategy hedge fund. Till spoke about the drivers of commodity returns; Armstead spoke about the benefits of active management versus passive investments in commodities.
All of the speakers contributed articles to Intelligent Commodity Investing , which looks at the market’s analytical underpinnings, published in March.