LONDON, March 13 (Reuters) - Crude palm oil is a good bet this year as supply tightens after strong production in 2011 left trees stressed and diminished their ability to produce the commodity, the co-manager of Baring Global Agriculture Fund said.
James Govan told Reuters he was also bullish about fertilisers and said North America would likely be the strongest market for them this year because the continent is due to have a large corn acreage and corn is a fertiliser-intensive crop.
The UK-based fund invests in palm oil companies, in part because Indonesia and Malaysia produce around 85 percent of the oil, making it quite concentrated in terms of supply, and also because the stocks-to-use ratio is tight at 8.2 percent, Govan said.
"It is also a relatively cheap vegetable oil, trading at a discount to most of the other vegetable oils and in particular trading at a discount to soy oil," he said.
He added that the long-only fund was interested in increasing its exposure to crude palm oil plantations, which currently make up 9.4 percent of its holdings.
James Govan told Reuters he was also bullish about fertilisers and said North America would likely be the strongest market for them this year because the continent is due to have a large corn acreage and corn is a fertiliser-intensive crop.
The UK-based fund invests in palm oil companies, in part because Indonesia and Malaysia produce around 85 percent of the oil, making it quite concentrated in terms of supply, and also because the stocks-to-use ratio is tight at 8.2 percent, Govan said.
"It is also a relatively cheap vegetable oil, trading at a discount to most of the other vegetable oils and in particular trading at a discount to soy oil," he said.
He added that the long-only fund was interested in increasing its exposure to crude palm oil plantations, which currently make up 9.4 percent of its holdings.
