Rice ETFs are exchange traded funds that fully or partially invest in rice commodity. Currently however there are no 100 % Rice ETF products on the market. You can however invest in Rice ETFs, through various different agricultural ETFs
Rice is being produced in more than 50 countries worldwide, with majority of the producers located in Asia. More than 460 million tons of rice in being consumed yearly worldwide. In developing countries rice consumption usually decreases per capita as the income rises (as more expensive foods will be consumed). 2 largest rice consumers are China and India.
Rice is a kind of a commodity that is being consumed locally, as the largest producers are also the largest consumers of rice, and only about 6 % of total rice production is traded internationally. Largest exporters of rice are Thailand (38% of the whole world exports), US, Vietnam and India.
Rice production has high operating costs and big capital investment costs, which makes it very costly for most producers, and is therefore usually produced in countries with cheaper labor.
As there are no Rice ETFs out there that solely invest in rice there still are some agricultural alternatives on the market that help to take advantage of the volatile movement of the worldwide food prices.
Elements International Commodity Index- Agriculture Total Return (RJA)
RJA is well diversified commodity index that holds lot of different commodities (corn, wheat, cotton, soybeans, coffee, live cattle, sugar, cocoa, lean hogs, rubber and several others, including rice).
PowerShares DB Agriculture Fund (DBA)
This Powershares ETF is based on DBIQ or DB Agriculture index, which is managed by DB Commodity services. The index composes of the future contracts of widely traded and liquid commodities in agriculture, and it has exposure to everything from corn to cotton it also reflects overall performance of an agriculture sector. Main holdings in the Funds index are corn, soybeans, sugar, live cattle, cocoa and coffee.
iPath DJ AIG Agriculture Fund (JJA)
JJA is a sub index to UBS Commodity Index Total Return Dow Jones and gives an investor an access of 7 futures contracts traded on U.S. stock exchanges. As of March 31st, 2011, the sector weightings included soybeans~25%, corn ~25%, wheat ~14 %, and soybean oil ~10%. The remaining of the index is made up of sugar, cotton and coffee.
