Published on April 8th, 2013 | by Jennifer Kaplan1
How To Profit From The Global Food Shortage
Yet again, I came across an alarming headline:
Really? It must be a satire, I thought. But sadly, no. The website valuestockguide.com has posted a no-joke analysis of how to profit from the tragic global food shortage.
The article suggests that companies dealing in fertilizers, grains/trading, seeds/chemicals, and farm equipment all stand to gain from the global food shortage. And, it comes as no surprise that environmentally unpopular companies like Archer Daniels Midland, DuPont and Monsanto are on the list.
The inflation in the food prices is set to continue globally. The demand is rising faster than the supply can keep pace and in 2007 and 2008 there were riots in 60 countries due to run up in the prices of corn, wheat and soybeans …
Agriculture has the potential to be one of the most promising investment themes for the coming decade (sorry Facebook investors!). Here are some of the selected stocks that you can use to play the agriculture theme.
The post goes on to accurately point to two factors causing rising food prices globally:
Increased demand from China. valuestockguide.com asserts that financial opportunities exist as “established players jockey to lock in supplies of essential grains and position themselves as a supplier to China.” They site the recent bid from the Japanese trading house Marubeni to acquire the US based grains merchant Gavilon (a spinoff from Conagra Foods) as being an obvious way of getting a footing in the Chinese supply channel.
Diversion of agricultural resources to produce biofuels. The articles suggests that global agriculture giants are investing, and diverting grain, for the Ethanol market.
The sad thing is that the author is probably right. To that all I can say is: Ugh! Its a twisted world we live in.
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