Barclays Launches Global Agriculture Delta Fund

May 20 2008 | 11:27am ET

U.K.-based Barclays Capital has launched the Global Agriculture Delta Fund to give Singapore- and Hong Kong-based investors transparent exposure to the agricultural market via the Rogers International Commodity Index.

The RICI-AgricultureTM Index represents the value of 20 agricultural commodities futures contracts including grains, live cattle, cotton and lumber. The index is reviewed annually by a committee chaired by Jim Rogers.

According to Barclays, over the past decade agricultural commodities prices have risen slower than metals and energy. In addition, the inventory levels of wheat and soybeans are low; rapid growth in emerging economies such as China and India have created massive demand for food, and new energy sources such as bio-fuels have also created new demand for crops. These have in turn pushed up the prices of these commodities faster than inflation and fuelled investors’ interest in the commodity market. Thus, investment in the commodity market may provide a potential hedge against exposure to inflation.

Peter Hu, head of non Japan Asia investor solutions at Barclays Capital in Singapore, said the launch of the fund is very timely in light of recent market awareness of the supply constraints within the agriculture sector and the resulting food price inflation.

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