Few trends are more compelling than rising Asian demand for Australian food. As another two billion Asians join the middle class by 2030, diets will be expanded and upgraded. ASX-listed agribusiness companies look well positioned for the so-called ‘dining boom’.
But the micro performance tells a different story. Switzer Report analysis of more than 50 ASX-listed food and beverage stocks shows a mixed performance. Almost half of them have a negative total return (assuming dividend reinvestment) over 12 months.
For every a2 Milk Company (220 % total return over one year), there are many more agribusiness stocks with heavy losses. Taking a top-down view on agribusiness is fraught with danger. This is a sector for stock pickers who know when to get in and out of companies based on soft-commodity cycles and valuations.