Forget gold and oil, and put your money on cheap agricultural products like grains, coffee and cotton, says commodities investment guru Jim Rogers.

"Usually, you shouldn't buy things that are making new highs," the celebrated US money manager said on Friday. "You should buy things when they are low."

In a telephone interview from New York, he said: "I would be looking at the agricultural field, say orange juice, coffee, cotton, maize... those are the things that haven't moved up as much as metals and energy."

New York arabica coffee, a variety for premium coffees, gained just three percent last year. A Reuters poll showed analysts expect a conservative 6 percent this year, underpinned by lower Brazilian output, drought in Vietnam and hurricane damage to the crops in the Americas.

Gold, by contrast, has hit 25-year peaks, while platinum and zinc are at multiyear highs. US crude and copper are at records. In agriculture, only sugar has shined, with prices at 16-year highs.

Driving the activity are pension funds, endowments and hedge funds pouring billions of dollars into instruments such as the Goldman Sachs Commodity Index and the Dow-Jones-AIG Commodity Index as commodities become a mainstream asset class.

Rogers, whose own index has more than tripled in the last 7 years, said he was not betting against the phenomenal potential for minerals and metals, with China and India snapping up almost anything that comes on the market.

BEST RETURNS FOR LOWEST RISK

"I know gold will go will higher in the next few years," said the man who wrote "Hot Commodities: How anyone can invest profitably in the world's best market".

"I also know oil will go higher over the next few years. But it's usually not best to buy these things when they are at such highs."

Rogers' advice to investors: Look where you can get the best returns at the lowest comparative risk.

Rogers, who has written books on his travels around the world on a motorbike and a modified Mercedes SLK sports car, said "good commodities" were everywhere.

But countries sometimes have regulatory restrictions that make it difficult to exploit trading opportunities.

"For instance, I used to trade Malaysian palm oil. But Malaysia, back in '98, restricted the currency, and made it very difficult to buy and sell palm oil," said Rogers, 63.

Rogers was a partner of U.S. billionaire fund manager George Soros when Malaysia pegged the ringgit in the aftermath of the Asian financial crisis and accused Soros of a "conspiracy" to undermine the currency.

Although many of the currency curbs have since been lifted, Rogers said other rules on the plantation industry deter him.

"I would like to trade palm oil again but now they have position limits in palm oil that are so small that it doesn't make it practical to trade. We have to trade soybean oil when we'd rather trade palm oil."

Rogers, who in his own words entered the business selling peanuts at age 5, has also become embroiled in one of the biggest scandals to the hit industry with the failure of Refco Inc.

He is being sued by investors in a claim that hundreds of millions of dollars were impoperly transferred to Refco, now in bankruptcy protection. Two funds backed by him are, in turn, suing Refco for a return of $362 million in assets they said were fraudulently seized. He refused to discuss the issue.

But he had one last piece of advice for investors wanting to play the commodities markets:

"I'd always advise against buying something you don't know anything about. I would certainly suggest that people who want to do something in commodities do their homework."