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    Investing in fertilizer–mining companies in times of food scarcity

    Geman, Hélyette and Eleuterio, P.V. (2013) Investing in fertilizer–mining companies in times of food scarcity. Resources Policy 38 (4), pp. 470-480. ISSN 0301-4207.

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    Abstract

    The primary goal of the paper is to show the validity of investing capital in fertilizer–mining companies, both from a market return perspective for individual or institutional investors, or from a hedging standpoint for insurance companies and other economic actors exposed to inflation risk and high agricultural commodity prices. After providing some elements on the fertilizer market and describing the joint dynamics of corn, wheat and fertilizer prices over the last decade, we analyze an exhaustive sample of listed fertilizer producing companies over the years January 2004–December 2012. We show that their shares generated quite good returns over the whole period and extremely high ones during the years January 2004–December 2007, both in absolute terms and compared to their betas. We also exhibit that these returns display higher sensitivities to major agricultural indexes than to the World Bank Fertilizer Index, making the hedging argument quite compelling.

    Metadata

    Item Type: Article
    Keyword(s) / Subject(s): Fertilizer–mining companies, Agricultural commodities, Inflation risk, Fertilizer equities, Investment strategy
    School: School of Business, Economics & Informatics > Economics, Mathematics and Statistics
    Research Centres and Institutes: Commodities Finance Centre
    Depositing User: Administrator
    Date Deposited: 13 Aug 2013 08:53
    Last Modified: 07 Dec 2016 15:31
    URI: https://eprints.bbk.ac.uk/id/eprint/7999

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