Boom in agricultural commodities

Commodities were hot in 2007. and they will stay hot in 2008. But when most people think commodities they think Oil, Steel, Copper etc.

But the biggest stories will be in food commodities… A couple of stories

1. CNN has a video about the “Queen of Oranges” - an uneducated illiterate Yemeni woman who is one of the biggest wholesalers of oranges in Yemen and the Middle east. Apparently she sells 270,000 dollars of produce per day!
2. Mango producers in the Ratnagiri district and the rest of the Konkan area of India have never had it so good. Apparently the global demand for Mangoes “all the year around” has given rise to giant orchards on the Sahyadri hills in the Konkan. Using special strains of mango trees, they manage to produce mangoes in just 2 years after planting as compared to 7 years previously. The mango plants and mangoes are germ resistant and a single plant produces 40 kilos of mangoes per year.

Agri-products and “manufacturers” of Agricultural products will really prosper as two trends take hold -

• As supermarkets push on to create their own private label products, newer customers for the producers are created. Old intermediaries will be pushed out.
• As the middle class consumers in China and India get more comfortable with the concept of “I eat the food I want to eat, when I want to eat it”, the year around production in warm climate countries like India, Kenya and Brazil to fulfil this want will increase the business of agriproducts in its entirety, and exotic produce in particular

So
a) If you’re a producer - get serious about positioning - market your product as an attractive addition to the menus of consumers and target retail customers to support them in their private label efforts
b) If you’re an investor - start researching agricultural companies and their position in the “value chain” from farm to shop
c) If you’re a consumer - enjoy your meal!