How to Profit Come Hell or High Water

Focus: COMMODITIES

The research team at Briefing.com is conducting thorough studies on water, the world’s emerging “new” commodity trend, identifying nine companies best positioned to profit from inevitable price increases.

Water is a vital resource: life on Earth cannot exist without it. Water is also a commodity, although it is not often thought of as such. It certainly does not trade like one. While the current super cycle has propelled the costs of energy, industrial metals, and agricultural commodities higher, the price of water has remained relatively cheap.

Briefing Research believes the commodity super cycle will continue based on the impact of developing market demand and the complacency surrounding the inevitability of production growth. That is the premise behind our trading and investment theme: for all commodities, there is a finite supply, and the same is true of water.

Concerns over growing water scarcity and shortages, including the misuse of fresh water and competitive usage, have culminated in increasing pressure related to water resources globally.

If fresh water supplies and humanity were evenly distributed across the land, water resources would not be an issue, according to the Pinsent Masons Water Yearbook 2011-2012. However, sources of water supply tend to be mismatched with regard to areas of need (think the MENA region and highly populated areas of Asia). The point is exacerbated by supply issues, including rising pollution, the loss of “watersheds,” drying aquifers, and aging infrastructure in developed markets.

Demand is also on the rise.

The global population continues to increase while agriculture is expanding and urbanization and industrialization cycles continue in emerging markets. All of these factors could put pressure on water supplies and water prices in the long run.

Global leaders have been focusing on water for decades, as evidenced by studies from the United Nations and the World Bank.