Make money out of rising food prices

Food inflation is constantly on the rise – the price of coffee has increased by 13.5 percent in the last twelve months.

A lot of us will just take this lying down, but for some soaring food inflation presents a great chance for investors in food.

Stockbroker Mick Gilligan agrees that food inflation gives investors opportunities. 'We see strong demand-drivers for food production from a growing global population, rising emerging market prosperity and increased use of biofuels,' he said. 'A high correlation to rising crop prices is driving demand for yield enhancers.'

For Gilligan, agribusiness company Syngenta is worth a look. The firm uses biotechnology and genomic research, increasing crop productivity protecting the environment and improving the quality of life. 'With an attractive valuation and strong exposure to long-term demographic trends, Syngenta is a buy,' he says.

Listed supermarkets may also benefit from inflation, though probably not by as much as you'd thing. Jeremy Batstone-Carr at Charles Stanley said: 'Historically, the best way to profit from rising food inflation has been through the supermarkets. That might still be the case as they raise prices to offset rising prices imposed on them by the food producers. Quite how much they can raise prices depends, of course, on the extent to which they are mindful of a highly competitive operating environment.'

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