(Kitco News) - Rising commodity prices could trigger social unrest in some countries in the future, says noted commodities investor Jim Rogers.

Supplies for many natural resources low and demand for them high, pushing up prices. Most commodities values from corn to copper saw significant rises in 2010 and prices continue to hold solidly.

The last time commodity prices, particularly agricultural prices were strong, was in 2008. There were riots in some countries as some of the poorest people in certain countries were unable to afford basic staples. Prices for raw materials are rising again and if inflation starts to take off that will only stoke the flame, Rogers said.

“You’re already starting to see some unrest in some countries as prices go higher. It’s going to cause a lot more social unrest as prices go higher around the world. Some governments will topple,” he said.

He said commodity-rich countries like Australia and Canada and those in South America and Africa will do well if prices rise. Farmers will also benefit.

“You will see some governments topple. Is it the end of the world? I don’t think so. It wasn’t in the 70s. But there will be more political instability everywhere,” he said.

Rogers spoke at a conference sponsored by Uhlmann Price Securities and the CME Group in Chicago on Wednesday.

Some governments and some politicians might respond by blaming speculators for rising prices. He used the example of how exchanges in India will sometimes be forced to shut to cool down rising commodity prices. “But every time it happens, prices go higher and higher. That’s the reaction of a simple-minded politician,” he said.

He added that higher prices for food and for commodities will spur investment in those areas. “You’d better hope someone is investing in food. If we don’t have higher prices, we won’t have any food at any price. We need to have prices go a lot higher to bring new people into agriculture and new production on line,” he said.

As a sector, commodity prices are still depressed, but agriculture has “unbelievably depressed” prices historically, Rogers said. “I prefer agriculture because it’s the most depressed,” he said.

He also said even though silver prices have rallied sharply lately, it’s not in a bubble or near a top as it remains 40% below its all-time highs.

By Debbie Carlson of Kitco News dcarlson@kitco.com

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