Food prices may be poised to soar as China appears set to endure a tough harvest, not an ideal scenario with over 1.4 billion mouths to feed – Beijing may not want / need our iron ore anymore but the story could be very different towards Australia’s food products. Over the past year the worlds 2nd largest economy has already imported a record volume of agricultural products and with major power outages in the most important production hubs this could just be the beginning of a massive trend – another one fuelling inflation.
Soft commodity prices have surged to 8-year highs while the corn price for example has already rallied around 50% from its 2020 low, hence the Bloomberg Agricultural Index is approaching multi-decade highs – the index includes the likes of corn, soyabeans, coffee, sugar and wheat. With food products feeling set to maintain their advance the obvious question is what local stocks would benefit from such moves.
