The war in Ukraine has delivered a shock to global energy markets. Now the planet is facing a deeper crisis: a shortage of food.
A crucial portion of the world’s wheat, corn and barley is trapped in Russia and Ukraine because of the war, while an even larger portion of the world’s fertilizers is stuck in Russia and Belarus. The result is that global food and fertilizer prices are soaring. Since the invasion last month, wheat prices have increased by 21 percent, barley by 33 percent and some fertilizers by 40 percent“,the New York Times reported on March 20th.
One of the best ways to hedge your portfolio against the soaring food prices is to buy ETFs that offer exposure to:
- Agriculture COMMODITIES
- Agriculture COMMODITY PRODUCERS
- COMPANIES that SELL FOOD
1. AGRICULTURE COMMODITIES
Invesco DB Agriculture (DBA) tracks a basket of futures that includes the below listed agriculture commodities. It is worth noting the top 5 allocations constitute 65 percent of the total portfolio.
2. AGRICULTURE COMMODITY PRODUCERS
On the other hand the VanEck Vectors Agribusiness (MOO) tracks an index of global agricultural commodity producers. The portfolio is well diversified and the top 10 allocations account for the 57 percent of the total fund.
3. COMPANIES THAT SELL FOOD
You can also benefit from exposure to food prices by investing into ETFs that hold the companies that sell food: