HSBC sees strong future prices for nickel, zinc, meat, dairy, sugar

HONG KONG – HSBC is predicting that higher grade commodities - like nickel and zinc - and 'finer foods' - such as meat, dairy and sugar - will outperform in terms of future commodity pricing as Emerging Markets development continues.

“Also, low-cost producers - like Australia (iron ore), Brazil (soft commodities), and Chile (copper) - should gain market share as high-cost ventures are exited,” HSBC says in a new global research report. 

Ässuming that growth in emerging economies will continue to exceed that in the developing world, global GDP growth should stay more 'commodity-intensive' than, say, in the 1980s and 1990s,” the report says.

“(And) the recent sharp fall in prices, along with a broadly higher cost base for many commodities (think water shortages for agriculture, or non-conventional oil production) should ultimately lead to a shake out of excess capacity and help to stabilise prices.

“This points to a new trend for commodities: differentiation.”