Tuesday, March 20, 2012

Nestle CEO on Commodities: "Global Food Price Rally Will Drive Investment..."

 The best cure for high prices is high prices
-old trader's truism
From Bloomberg:
Rising agricultural prices may spur increased investment in research and infrastructure, helping lift farm yields and output to feed a larger and richer global population, according to Nestle SA (NESN), the biggest food company.

“Prices are getting to a level that may result in an effect that is positive for food production,” Chief Executive Officer Paul Bulcke said in an interview on Bloomberg Television. “People are motivated again to be in agriculture.”

Global food prices rose for a second month in February on higher costs for cereals, cooking oils and sugar, according to a 55-item gauge tracked by the United NationsFood and Agriculture Organization. Costs may remain near current levels in the coming months as demand absorbs increased supply, Abdolreza Abbassian, a senior FAO economist, said on March 8.
Food-price volatility has increased as production isn’t growing at the same pace as demand, cutting stockpiles, Bulcke said in Kuala Lumpur. Raw-material costs for Vevey, Switzerland- based Nestle such as coffee and sugar were expected to continue to climb this year, although at a slower pace than 2011, he said....MORE