The CBA's Agri Index recorded negative growth during the past month, delivering a loss of 3.1 per cent over while the S&P/ASX200 index reported a loss of 1.2pc over the same period.

Brendan White, executive general manager of Commonwealth Bank Agribusiness, said the index’s move into negative territory followed a significant period of market volatility that saw uncertainty remain in the sector.

"The performance of the listed agribusiness sector this month is not unexpected," Mr White said.

"While confidence in the economy is slowly returning, investors remain cautious and this month’s results are indicative of a more prudent approach.

"In addition, several companies in the index reported net losses and are in the midst of completing capital raisings."

Forest Enterprises Australia (FEA) and Incitec Pivot Ltd (IPL) reported net losses.

FEA and GrainCorp Ltd (GNC) were also in the midst of capital raisings last month.

Currently, IPL accounts for 36.3pc of the agri index and GNC accounts for 10.6pc.

Mr White said the strength of the Australian dollar also posed challenges for the agribusiness sector, with the Australian to US dollar exchange rate recently exceeding 0.9300 and forecast to trade to 0.9500 by March.

"This could mean more tough times are on the horizon for the sector," he said.

This month’s short-term loss is buoyed by a more favourable long-term forecast for the agribusiness sector.

"The consensus forecast return for the year to November 2010 is 9.0pc," Mr White said.

"This return is in line with the broader market, which is expected to return 9.4pc over the next twelve months."