Sunday, April 25, 2010

Agricultural companies have the future.

Why am I so interested in China agricultural companies? First of all, food is an essential commodity for life. The world's population is still growing and the demand for food in China is rising because a greater proportion is becoming affluent enough to eat well.

Thanks to growing incomes, the demand for better diets and more protein is just beginning. I believe that you've only seen the early stages of an agricultural boom, and that it will be one of the most profitable sectors the coming years you can invest in.

At the same time, the growing consumption of corn, sugar, and wheat to produce ethanol is essentially taking food out of hungry mouths.

And as is often the case for many of today's new hot investment trends, you need look no further than China to find some of the best investment opportunities.

Four Reasons to Jump on The Chinese Food Bandwagon ...

While China is known for rice farming, there are plenty of other attractive agriculture investment areas ...

China has changed from being a net exporter to being a net importer of major agricultural crops. With 1.3 billion hungry mouths to feed, China can't produce enough food to meet its own demand, let alone other country's needs.

Chinese agricultural companies are protected by the government and foreign competition is heavily regulated. There are two Great Walls in China; the physical Great Wall and the governmental "great wall" that protects Chinese companies against foreign competitors. Chinese agricultural companies enjoy a state-sanctioned monopoly.

Recent droughts and extreme water pollution have negatively impacted China's food supply. Rapid industrialization has severely polluted China's water supply and made the current drought even more painful.

As more Chinese move from the rural interior to more affluent coastal cities, consumption of all food commodities have exploded. And this will only continue as more Chinese move into urban settings!

If you're interested in the Chinese agricultural companies, there is no shortage of investment options, many of which are traded on U.S. exchanges. Here is a partial list of companies that have piqued my interest:

Rodobo Int. (RDBO)
China Agri-Business (CHBU)

In both companies I have a small position. But there are also other companies worthy to take a look at and to investigate. At a lot is already researched.

American Dairy (ADY)
Emerald Dairy (EMDY)
Man Shing Agricultural (MSAH)
China Marine Food Group (CMFO)
Yongye International (YONG)
Skypeople Fruit Juice (SPU)
Yuhe International (YUII)
China Kangtai Cactus Bio (CKGT)
China Swine Genetics (CSWG)
Sino Agro Food (SIAF)
China Fruits Corp. (CHRF)

Of course this list is not completed because there are much more agricultural companies listed in the U.S. Do you know some? Reply so I can take a look.

1 comment:

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