Here are the raw materials that could be interesting to trade in for the rest of 2020…
Watch out for the “Green Rush.” Many believe the legal cannabis industry will become one of the most lucrative industrial sectors in the world, due to an increasing number of countries legalising medicinal marijuana which is eliciting a greater acceptance from the public. The medical marijuana market has had a slow start, but reports suggest it will be worth around US$75billion by 2030, and the Oceania market will quadruple in the next ten years. As the industry becomes increasingly regulated, patient numbers and access should grow steadily for the next 15 years.
Coronavirus has caused low exports of soybeans to China, with the projected demand of this “Protein Gold” expected to increase. In 2018, the US produced a record 4.54 billion bushels of soybeans; this season just 3.55 billion bushels are predicted. This is due to farmers in the Midwest being unable to plant crops on 19.4 million acres of land last year because of record rainfall. This has caused prices to skyrocket. With adverse weather conditions in Australia and Russia also leading to reduced output of crops, it’s thought prices will rise again.
By 2030 it’s expected that nearly 20 million electric vehicles will be sold every year, and by 2040, around half the light duty vehicles on the road will be electric, according to Business Insider. The global nickel which goes in to the batteries for these electric vehicles is currently around 3% – but that’s set to increase to 20% in the next five years. As with lithium and graphite, nickel looks set to experience a similar surge in price in the coming years.
Used as the world reserve currency until 1973, today gold is seen as a safe haven when other investments appear risky. It often performs well during crises such as war and global pandemics – something we know all too well about at the moment. However, major economic announcements that could impact inflation such as unemployment figures, natural disasters or interest rates can all have a bearing on the price of gold.
Widely believed to be the second most traded commodity after oil, it’s estimated there are over 2.25 billion cups of coffee drunk every day throughout the world. The price of coffee depends on discretionary income, so high levels of unemployment can reduce how much people consume. The price of beans is currently weakened due to consumers staying at home during the Coronavirus pandemic, but as this changes later in the year, prices may rise again.
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