Investors' exposure to commodities has fallen to its lowest level since September as faith in China's economy "unravells".

The margin of fund managers whose portfolios are overweight in commodities, compared with those giving the asset class shorter shrift, tumbled to 10% this month from 23% in January, a survey by BofA Merrill Lynch showed.

The decline reflected a fall to 7% in the margin of fund managers forecasting that China's economy would strengthen over the next year, with concerns also growing for Greece's sovereign debt crisis pulling back Europe.

"The central message from the survey was crystal clear in taking risk off the table on a re-evaluation of growth for China and Europe," the bank said.

Hopes for China, the world's biggest importer of soybeans and many metals, have been dented by implementation of measures such as stiffer bank reserve requirements aimed at tackling the threat of a credit bubble, if at the expense of curbing economic growth.

Appetite for foods

Fund managers have instead liquidated assets, with average portfolio cash balances rising to 4.0% from 3.4% last month. Bonds positions also rose marginally, while hedge funds scaled back their borrowing requirements.

For equities, the shift in sentiment has been reflected in a waning taste for shares in the raw materials sector, an industry which suffered the biggest drop in popularity over the month.

However, shares in some users of commodities, such as foods companies, rose markedly in the opinions of fund managers who have, in Europe in particular, historically put strict limits on the sector's allocation within portfolios.

"Food & Beverages saw a large improvement in popularity, to a perfectly neutral 0% position, from a net 22% underweight last month," Merrill Lynch said.

"This is one of the most positive readings ever for the sector, and well into 'overowned' territory," adding that contrarian investors may take it as a signal to cut back on food company holdings.