By the 1950s, he had become an expert on a rare breed of butterflies. The professor was more unique than his subject of study. He was one of the few biologists that achieved rock-star status.
His book, The Population Bomb, was published in 1968. It sold 3 million copies and was so popular that bootlegged versions were sold on the streets of Delhi and Madras.
Ehrlich feared that overpopulation would deplete the supply of food. Mass starvation would not only affect poor countries. Even rich countries like the US would run out of food by 1980. He feared that disease would mean that Americans would not live past 50.
Ehrlich called for population control. He favoured severe penalties for parents with more than two children. His forceful manner and sideburns became a late night TV staple.
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Many countries took his warnings to heart. India adopted forced sterilisation in the 1975. China imposed the one-child policy. Even Singapore, one of the prosperous Asian countries, penalised parents with more than two children in the 1970s.
His biggest contribution was losing a bet. In 1980, Ehrlich’s alarmist view was attacked by Julian Simon, an economics professor. Simon was optimistic that human ingenuity would improve food productivity. He believed there would be more than enough food to feed the world, even if the population doubled between 1980 and 2000.
Simon challenged Ehrlich to a bet in 1980. If Ehrlich’s belief that population growth would increase scarcity was correct, then the price of commodities would increase.
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Simon believed that technology would reduce scarcity. He was convinced that commodity prices would fall in the next decade.
Ehrlich agreed to the US$1,000 bet. They chose chromium, copper, nickel, tin, and tungsten.
The 1980s saw a commodity bear run. Simon won the bet in 1990. The prices of all five metals fell. Ehrlich mailed Simon a cheque for US$576.07 (which was the 1990 equivalent of US$1,000 in real terms) without a note.
Poor countries became richer despite the population boom. One in three people in poor countries suffered from hunger in 1970. By 2025, that had fallen to 8%.
Paul Ehrlich author of the 1968 book, The Population Bomb / Photo: Jay Cross / CC BY 2.0
In a strange twist, Ehrlich has died at a time when food prices may spike. The closure of Straits of Hormuz could cause an oil shortage. A fifth of the world’s supply travels through it.
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Oil is not the only commodity that could see a spike in price. There are others that have even higher exposure to that waterway. Nearly half of the world’s fertiliser supply is now stranded there. There is no pipeline or land route to move the volumes.
India’s planting season begins in June. There is uncertainty about fertiliser availability. Fertiliser prices could double, threatening crops. In poor countries, more than half of the household income is devoted to food. Even a 10% rise in wheat or rice prices can make meals unaffordable.
Like Ehrlich and Simon, investors may want to bet on commodity prices. You don’t need to bet on the price direction. Instead, there are stocks that could rise.
CF Industries is one of the world’s prominent nitrogen producers. Nitrogen is one of the building blocks of fertiliser. The stock is a potential beneficiary of surging nitrogen prices. The stock is up 60% year to date, but ebitda forecasts have risen 30%. At a US$19.3 billion ($24.8 billion) market cap, it has 10% free cash flow yield. It doubled during the first two months of the Ukraine war.
Nutrien is one of the world’s largest potash producers. Potash is a vital ingredient in fertiliser. The company offers diversified exposure across nitrogen, potash, and retail distribution.
First Resources, listed on the Singapore Exchange, is a proxy that is close to home. This is an Indonesian palm oil producer with over 215,000 hectares, which is three times Singapore’s land mass. Palm oil is the cheapest source of cooking oil and closely tracks oil prices. If the Gulf war escalates, Ehrlich may be partly vindicated after his death.
Nirgunan Tiruchelvam is head of consumer and internet at Aletheia Capital and author of Investing in the Covid Era
