Whet Your Appetite with These Food Commodities

As the holiday season fast approaches, food seems to be on everyone's minds. But does food also whet the investor's appetite?

Pork futures have been on an upward trot ever since Beijing lifted its ban on pork imports from the U.S. The ban was implemented at the beginning of the swine flu outbreak, when the first cases of the H1N1 virus were found in Mexico, the U.S.'s neighbor.

"The emerging markets, the Asian and the Chinese markets, are very important because as they have a higher disposable income, they are buying more meat, especially third-cut meats, the tongues, the trotters and also obviously all kinds of cuts of pork, which is helping increase demand and increase the market value for pork globally," Fergus Howle, pig farmer, said.

Market analysts too have noticed the same trend.

Meals in Asia are becoming more sophisticated as meat and dairy become a greater part in their diet.

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"If you look at where demand is increasing, certainly China and India are some of the major drivers in terms of increasing edible oil, but also through increasing their dietary patterns to more animal proteins," Luke Chandler from Rabobank International said. "So they are consuming more dairy products, they are consuming more beef, more poultry, more pork."

While corn and wheat have really "been in the doldrums," soybean has benefited from record high demand out of China, according to Chandler.

China's pork numbers are up 70 percent year-on-year and therefore they must find grains to feed the animals, Chandler said. "As a result, they have to increase their consumption of soybeans from South America but also from the U.S," he added.

Other factors contributing to the rise in food prices include natural disasters, biofuels and global population growth.

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Today's population is around 6.5 billion people, but we are heading toward 9 billion people in the next 40 years, Coast Sullenger, managing director at Gaia Capital Advisors, told CNBC.

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There is also an argument that there is a massive underinvestment globally in agriculture that will eventually mean there will be a squeeze.

"We need to essentially double food production, according to most experts in the next 40-50 years. That is a huge challenge," Sullenger said.

The biofuel factors also comes into play.

"In the U.S., for example, 36 percent of this year's corn crop will go into making ethanol. That takes a lot of corn out of the market that would otherwise have gone to traditional food uses such as food and feed," Chandler said.

Soft commodities have "really been laggards" this year, with the exception of sugar and cotton, according to Sullenger.

"They have not participated in the rally. And that has been very disappointing for a lot of people. Certainly the very bullish USDA (United States Department of Agriculture) forecasts of crop harvests this year has something to do with that. But if you look in the long-term, these commodities are trading at 200-year lows in real terms," he said.

Over the next 12 months, soybeans, sugar and cocoa are likely to continue to perform well as "there are fundamental drivers there," Chandler said. "Wheat and corn stock levels are still relatively abundant, so we're not likely to see a price spike there. Over the longer term, I think those that are driven by the demand from China and India, so soybean oil, palm oil and soybean meal are likely to benefit very strongly."

For once, a diet high in oil and sugar might actually be good — at least for investors' portfolios health.