With the sharp falls in commodities prices in the second half of 2008, investors are questioning the concept of the commodity super cycle and the rationale for investing in that asset class.

Indeed, this year's 15 per cent rally in commodities is being ascribed to temporary factors, including speculative short covering and stockpiling in China. Last year's near 40 per cent pullback in commodities, though, should be viewed as a healthy correction in a secular commodity bull market. Indeed, there are three reasons for expecting commodities to perform well over coming years.

First, the structural strength in the global economy resides in the emerging market economies. Since experiencing significant economic hardship during the series of EM crises between 1997 and 2001, these economies have been paying down debt, increasing savings and building reserves. As a result of that structural economic strength and the stimuli now being applied to these economies, we expect the EM economies to act as the major driver of global growth over the coming decade. Most importantly, given the voracious appetite for commodities in these industrial- ising economies, demand for major global commodities should rise significantly. Already China's consumption of copper has risen rapidly in 2009, as the fiscal stimulus plan and rapid lending growth combine to drive a recovery. Our long-term demand forecast suggests consumption of key commodities by the Brics (Brazil, Russia, India and China) alone, especially China, will account for the majority of global consumption by 2020 as their economic growth remains rapid and becomes increasingly commodity intensive.