One big reason why the commodities supercycle will keep on rolling

As people in emerging markets such as China and India strive for a better life, demand for everything from metals to milk will remain high.

"The commodities supercycle is alive and well," says the Australasian Investment Review. Global mining giant BHP Billiton, reporting a 21% jump in annual profits, says raw materials prices should stay high. The US economy may be slowing amid the fallout from the subprime saga but according to a survey of its major customers, in developing economies it's "essentially business as usual".

Strong expansion in emerging economies should prop up global growth, reckons BHP's CEO Chip Goodyear, who points to a "step change" in demand for resources as industrialisation continues. The industrialisation and urbanisation that have driven China's growth "will continue for several decades as billions of people strive for a better quality of life". China accounts for 20% of BHP's income, and sales to India have jumped to 4% from "almost nothing... this is where China was six or seven years ago and we expect rapid growth". Meanwhile, "supply-side pressures will remain high".

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
MoneyWeek

MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.