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‘The fall in food prices bodes well for the margins at processing companies and medium-term the secular trend is compelling,’ Simm said.
Renzo Casarotto, head of global agribusiness at First State Investments, highlights seed technology as his favoured investment theme, which he says will be crucial to improving the yield from Chinese agriculture.
Although local farmers and officials see seeds as the primary factor driving future productivity gains, Casarotto said the lack of intellectual property rights and the difficulties in gaining distribution due to local firms receiving subsidies remain a challenge. That said, a number of companies have been able to gain traction in the country.
‘Pioneer seems to be one of the few international companies that has been able to penetrate the market and gain acceptance. Monsanto is in catch-up mode and its tie-up with Sinochem may prove to be a smart strategic move,’ he said.
‘Local and international seeds companies have ramped up trials with retailers and local bodies. The government seems very supportive of these initiatives.’
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by James Phillipps on Jul 23, 2014 at 14:34