Passage2
There are several common features-which would apply to metals and minerals, just as much as to soft commodities. Investment funds have moved out of commodities which were bought in the 1970s as store of value and into more liquid assets. The world has got used to living with much lower levels of stocks than in the inflationary 1970s. On the other hand, the persistence of high real interest rates has increased the cost of carrying large inventories. The long term downward trend is said to reflect increasing efficiency, both in the production and in the consumption of commodities. There is a constant shift in the soft commodities business, from the less efficient, higher-cost producers to their more competitive rivals. Only protectionism, for many products, prevents this shift happening more quickly, or, in the case of coffee, the transition is impeded in normal times by the existence of a rigid export quota system.
What are"soft commodities"?
Soft commodities are agricultural commodities
