Asian food demand continues to increase as the continent’s population expands and regional economies grow stronger. China, which recently surpassed Japan to become the world’s No. 2 economy, is facing mounting pressure to keep pace with rising food demand. The country has a rapidly urbanizing population and declining arable land because of poor land management practices. Additionally, Asians are transitioning from traditional diets toward more consumption of meat and wheat, agriculturally intensive foods.

The agricultural shocks we experienced last summer and fall–when critical wheat crops failed due to adverse weather–could become more frequent and intense. Those shocks may not cause widespread starvation, but they will cause the prices of agricultural commodities to soar.

Fertilizers are the easiest way to increase agricultural production, and fertilizer use will continue to grow. The International Fertilizer Association projects fertilizer demand will grow by more than 3 percent per annum over the next few years; total demand will climb to almost 200 million tons by the middle of the decade. The fruit and vegetable industries will largely drive growth and Chinese demand will account for two-thirds of the fertilizer used for fruits and vegetables.

Market Vectors Agribusiness (NYSE: MOO) remains our favorite play on surging global demand for all manner of agriculture-related products, from fertilizer and farm equipment to the final food product.

Fertilizer companies like Potash Corp of Saskatchewan (TSX: POT, NYSE: POT) and Mosaic Company (NYSE: MOS) make up almost half of the fund’s portfolio at 47 percent of assets. Seed and pesticide producers like Monsanto (NYSE: MON) and Syngenta (NYSE: SYT) are also well represented in the portfolio at just under a third of assets. Equipment manufacturers such as Deere & Co (NYSE: DE) account for 15.5 percent of assets. The remainder of the portfolio’s assets are spread across livestock operations and specialty ethanol/biodiesel plays.

Market Vectors Agribusiness was one of the original exchange-traded funds (ETF) added to our Portfolio when we launched this service one year ago. With an annual expense ratio of 0.56 percent, we’ve lost little in the way of holding costs and anticipate maintaining our ‘Buy’ recommendation for some time to come.

Inexpensive and profiting nicely from rising agricultural commodity prices, continue buying Market Vectors Agribusiness under 57.

The Global ETF Profits Way

The Global ETF Profits Portfolio is divided into three sections: Growth, Income & Hedges (I&H) and Short-Term Opportunities.

The aim of the Portfolio is to provide a total return approach to investing by recommending growth, income, and hedging strategies as well as shorter-term tactical opportunities. The use of ETFs will reduce stock-specific risk, and we’ll recommend the most efficient vehicles to help you achieve your investment goals.

The Growth and I&H sections are appropriate starting points for investors seeking to establish positions for the long term. Short-Term Opportunities will be more adventurous. We’ll adjust the ETFs in the Portfolio on an ongoing basis to reflect investment objectives. Our recommendations are sorted in descending order of preference, starting with our favorite pick at the top of each section.

It’s important to buy a cross-section of recommendations–taking into account, of course, your objectives and risk tolerance–in order to gain broad exposure to the themes we’ve recommended and to hedge your long positions.