As global markets experience rampant inflation, many investors are looking to alternative investment options to mitigate the potential impact on their portfolios. 

While precious metals and gold are common hedges against inflation, there is growing interest in agricultural commodities as another popular way to diversify portfolio risk.

What separates agricultural commodities from traditional investments like equities is commodities can be more independent of market changes and are considered real assets. Commodities can retain value even when currency is devalued.

Further incentivizing investors to look into agricultural commodities is the current geopolitical landscape. The Russia-Ukraine War is having ripple effects across the supply chain, driving commodity prices higher. 

Growing Protectionist Sentiments Are Resulting In Rising Prices

The war has disrupted exports and increased the price of fertilizer and agricultural commodities related to fertilizer such as phosphate. Between January 2020 and March 2022, nitrogen fertilizer prices increased fourfold, while phosphate and potash prices rose over threefold. 

As a result, many countries are trying to reduce their dependence on Russia and other politically unstable countries that supply agricultural commodities. In September, the U.S. Department of Agriculture announced it will invest $500 million to increase domestic fertilizer production, which is double the amount of its previous commitment.

Solutions Closer To Home

Companies like Canadian Arianne Phosphate Inc. (OTC:DRRSF), a promising phosphate mining company, are among the few in North America that can respond to the growing demand for phosphate through its high-purity phosphate concentrate. 

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