Food and Agri Sector: Positive Tailwinds Look Set to Continue
ASX-listed Food and Agri stocks have gained 105.2% on average since the sector hit its nadir in mid-2012. With the following structural factors likely to provide ongoing positive tailwinds, we anticipate this out-performance to continue: 1) Domestic and global population growth, specifically the expansion of Asian middle classes; 2) A subsequent increase in demand from Asian markets for Australian Agricultural exports; 3) The lower Australian dollar driving increased competitiveness of exports; 4) Free Trade Agreements with China, Japan, and others to increase global positioning; 5) Australia’s long history in the sector, and strong ‘clean and green’ credentials; 6) Brand Australia: the premium paid for high-quality Australian goods; 7) An increasing focus and fund allocation from investment managers. The listed Food and Agri companies in which we see the greatest opportunities are those not just producing agricultural products, but also distributing them under a recognisable brand, and supplying key export markets. Full report here: (VIEW LINK)
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