"In the face of economic uncertainty, commodities will go through the roof. Over the next ten years, everyone in the world is going to be talking about commodities," said Rogers at an investment conference in London today.
Rogers identified the imbalances between supply and demand as reasons why this market will continue to thrive. "Commodities will boom during times of economic stress, because demand will stay high even though there will be supply shortages," he said.
According to Rogers, commodities will experience a decline in supply while Asia's appetite for commodities will continue to drive demand, maintaining a bull market. Supply will decrease as agricultural developers find it difficult to find financing for projects, he said, and the oil market will face similar supply-side constraints.
In spite of the recent economic downturn, Rogers is confident that the commodity bull market will last for another ten to 12 years. "If you follow history, bull markets will last 18 to 20 years," he said. "So I would expect the commodity bull market to end in 2020, but there are no guarantees."
Rogers was also positive that oil will hit the $100 mark again, "Maybe not over the next year," he told Energy Risk. "But it will rebound over $100 over the remainder of the bull market," he said.
He reiterated his view that China will become the next superpower. "The 21st century is the century of China," he said. "However, there will be setbacks along the way."
Rogers also pointed out that Africa is a continent with many opportunities for commodity investment. "China has got the right idea and has spent the last ten years buying up Africa's natural resources," he said. "If there were more of me I would be over in Angola, Ethiopa, Botswana and Tanzania."
The week in Risk.net, May 19-25 2017Receive this by email