Brazil, Argentina partnerships – acquiring farmlands to guarantee supply will be the way to go.
via commodity online
The manila based Asian Development Bank on Monday warned that India’s food grain import could rise to 20 million tons by 2012 if adequate efforts were not taken to augment the output.
According to ADB’s recent study on ‘food price and inflation in developing Asia’, demand in India would grow at 22.5 per cent per annum during the 2007-2012.
As regards edible oils, the ADB report said more than 40 per cent of the country’s domestic demand is being met through imports. “Increasing demand and slower growth in domestic output can increase dependence on imports,” it added.
Popularity: 2% [?]
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As edible oil scenario is getting more sticky in India – world’s biggest consumer – companies in the oil field is going gaga. Looking to the huge aspect of demand of edible oil, the latest entrant from this sector to the stock market is Gokul Refoils and Solvent Ltd, a Gujarat-based solvent extractor and edible oil refining firm.
Popularity: 3% [?]
The Standard
Interpreting these drivers becomes a useful exercise in deciding whether or not food prices are genuinely in a longer term bull market or not.
Driver number one: The number of mouths to feed. Clearly, this number is rising.
However, rising populations do not in isolation support an extended bull run in prices. Food has a relatively “short run elasticity of supply” feature in that if prices rise because of supply needs, farmers are quick to plant more crops.
This supply-demand elasticity is longer with, say, base metals because of the time it takes to recover the material from the ground.
Driver number two: Rising wealth of populations is a factor that works with driver one to complicate the supply/demand factor.
A key part of impending resource scarcity is blamed on the rise in per capita consumption. From a food perspective, one trait that surfaces is the change in diet from cereal consumption to meat consumption.
Asian palates have grown since 1990 from 16.7 kilogram per head of meat per annum to 27.8 kg per head.
Importantly, this trend has a leveraged effect on the need for grain as it takes 7 kg of feedstock grain to produce one kg of beef.
Driver three: Largely a US phenomenon at present but capable of becoming global: the 2007 US Energy Act is committed to a fourfold increase in biofuel output by 2022.
Popularity: 2% [?]
