The Global Financial Meltdown Will Lead To A Severe Food Crisis? Look for opportunity here – Refer “10in3” report from HBJ Capital.

The global financial crisis will cause wealthy governments to reduce food and agriculture aid to developing countries and introduce protectionist measures to keep out their agricultural products. If aid is reduced, there could be another food crisis next year, despite the record 2008 cereal harvest which is now expected.

• The financial crisis, following hard on the heels of the soaring food price crisis, which threw 75 million people into hunger and poverty last year alone, may well deepen the plight of the poor in developing countries sending food prices soaring and pushing an extra 119 million people into hunger
• Slowing commodity prices because of a slowing world economy could mean a cutback in planting followed by reduced harvests in major exporting countries. Given continuing low grains stocks, this scenario could lead to another turn of record food prices next year - a catastrophe for millions who by then would be left with little money and no credit
• The great uncertainty now enveloping international markets and the threat of global recession may tempt countries towards protectionism and towards reassessing their commitments to international development aid
• World cereal production in 2008 is forecast to increase 4.9% to a record 2 232 million tonnes but despite an improvement in the outlook for global cereal supplies in 2008/09, 36 countries around the world are in need of external assistance as a result of crop failures, conflict or insecurity, natural disasters, and high domestic food prices
• The credit crunch is preventing accelerated flow of capital to long-term investments in sectors such as agriculture, undermining production growth toward a more resilient global food system the livelihoods and food security of millions of poor people, as well as the economic, ecological, and political situation in many developing countries at risk
• Western governments embroiled in the financial crisis could cut aid to agriculture in developing countries and introduce protectionist trade measures

So, tell me HBJ Team, how we are going to make money out of this food crisis?

You have two option.......

1. Invest in a agro food producing company which is backward & forward integrated, with good network of distribution, which is sourcing from low cost destination etc…….to know the name of the company go for HBJ Capital’s “10in3” Stocks.
2. Invest in bio fertilizer producing company which has better yield and comes with lower price compare to NPK fertilizers. To know a multibagger gem company in this sector you can again refer one of the “10in3” report already sent to you.
   

-JK, Equity Research Analyst
HBJ Capital, India