Olam is a Singapore-based food trading business, one of the largest in the world, and it was part of a Barron’s story on under-the-radar Ag plays this weekend. You guys know my long-term investment thesis on the Ag bull market (it will last decades) so I thought I’d share this little affirmation directly from the Horse’s Mouth…
Olam figures the global population expands by at least 75 million each year. All those people need to be fed. Meanwhile, per-capita income is rising, and people in emerging countries are eating more protein and less cereal. This collides with a decline in arable land, caused by rising urban populations. “Farms are literally being transformed into parking lots as Chinese car ownership increases,” observes Sunny Verghese, Olam’s chief. “There will be more episodes of droughts and floods over the net 25 years, and we will see a significant supply-demand imbalance.”
As someone who has successfully ridden the farm and food plays all year, I am still fascinated by how much bigger this story can become versus people’s expectations. Once the general public begins understanding the world better, agriculture investing could easily rival or surpass the gold obsession of the last few years. I plan to be paddling ahead of that tidal wave when the time approaches.
On a related note, I’m headed to San Francisco in April to speak at an agriculture-themed investment conference. Details as they become available.