Global food prices hit record high

[Nick]

elite KSB anyone? hehe.. yet to try their texas chicken..

Elite KSB don't own Texas Chicken. The company which owns Texas Chicken is Select Group

Ooops. I was conned when I saw Texas chicken pictures inside the latest AR. Interestingly, Elite KSB is supplying to Nandos as well. Have not tried Nandos in Singapore either.

Interesting counter with quite rapid growth of revenue. But not keen as dividend was just recently distributed. There are more counters that will distribute dividends in May.

Just ate Nandos a few days ago...yummy hehe !

I think a lot of chickens from NTUC/Cold Storage is from Elite KSB as well. Their halal products should be pretty popular locally. There is a comprehensive research report from S&P released in 2010. It is available in SGX Research site.

Good company with pretty decent track record but will be affected by bird flu or major currency movement.

(Vested in a food-related company but not Elite KSB)

[Musicwhiz]

Jan 14, 2011
Economists fear repeat of 2008 food crisis
Corn, soya bean prices hit 21/2-year highs; prices of livestock also climbing
By Yasmine Yahya

GLOBAL economists are warning that the world might see a repeat of the 2008 food crisis after corn and soya bean prices hit 21/2-year highs this week.

On Wednesday, corn and soya bean jumped 4 per cent to US$5.93 and US$13.86 a bushel respectively following a United States Agriculture Department announcement that corn production was on course to drop 5 per cent this year and soya bean output was likely to fall 1 per cent.

And late yesterday, the price of both crops hiked again, with corn trading at US$6.38 and soya at US$14.18 a bushel.

Supplies of the two commodities have been depleted by demand for corn-based ethanol and a sharp fall in 2010 production of both corn and soya bean.

Corn and soya are used extensively as feed for livestock and experts predict the tightening supply and rising cost of the crops will force up meat and dairy prices.

Livestock prices have already begun climbing, with cattle futures setting a record on Wednesday night and hogs reaching an eight-month high.

Economists from the World Bank are alarmed about the rapid rises and fear the impact of escalating food inflation on the developing world.

'Although real food prices in most developing countries have not increased as much as those measured in US dollars, they have risen sharply in some poor countries,' the World Bank noted in its latest Global Economic Prospects report.

Economist Chua Hak Bin from Bank of America Merrill Lynch expects many South-east Asian countries to be hard-hit by the rocketing prices, as a disproportionately large amount of consumer spending in the region goes on food.

'In the Philippines, it's 49 per cent of their consumer price index basket, in Indonesia it is 38 per cent, Thailand 35 per cent, Malaysia 34 per cent,' he said at a media briefing yesterday.

Dr Chua pointed out that the situation was not currently as serious as the 2008 food crisis.

The prices of major staples, such as rice and oil, had not increased as much as other commodities. Over the past six months, rice has risen 30 per cent and crude oil 19 per cent. In contrast, corn has surged 84 per cent and soya bean is now 39 per cent higher.

Citigroup economist Kit Wei Zheng added that Singapore was not likely to be significantly affected by the runaway food prices. He noted that during the 2008 food crisis, food prices in Singapore increased at a much slower rate than the United Nations' Food Price Index.

'Between June 2007 and August 2008, on year-on-year terms, the UN index rose 41 per cent. But in Singapore, prices of raw food rose only 7.5 per cent, and that of prepared food rose 4.8 per cent.' The World Bank report added that China's rapid growth will slow to 8.5 per cent this year from 10 per cent last year, but the world's second-largest economy will remain the focus of Asia's expansion.

In its latest estimates, the bank expects global growth of 3.3 per cent this year after a 3.9 per cent rate last year.

For 2012, growth in the global economy is estimated at 3.6 per cent.

Threats that could derail the recovery include the euro zone debt crisis and volatile capital flows as well as commodity prices, the World Bank added.

yasminey@sph.com.sg

[Nick]

Yamada, Sino Grandness and China Minzhong share price have appreciated massively over the past 2 months ! All 3 are in the food-related industry.

[arthur]

There exist a difference between being a solid counter that is getting a great industry sentiment boost vs. a half pass six counter that just happens to be in the industry that's getting all the investors and traders excited at the same time.

Thus, lies the difference between real investment vs. trading momentum on the assumption that the counter possesses solid fundamentals.

Don't get overly excited gents.