Rising potential in agriculture
by Foo Rong. Posted on February 12, 2012, Sunday
In retrospect to some disasters in 2011, we have seen the economies receiving damage in some important territories. For instance, Japan was badly hit in March last year by the tsunami that pulled down the country’s growth until now.
Multi-businesses have been influenced by the devastated infrastructures that cost billions of dollars over years.
While Japan’s national disaster was brought upon by the wrath of tsunami, it would not be too far to digress that the overwhelming floods that washed into Australia and Thailand last year could be form the same disastrous source.
Australia is one of the world’s top exporters of sugar and coal. Since the seventh century, sugar became a staple condiment in cooking and desserts and this cannot be distanced from our daily diets in today’s modern society. On the other hand, coal is one of the most essential cheap sources of energies much needed by many countries during the winter seasons.
After Australia was affected by floods last January, transport of coal became a difficult task and prices escalated rapidly. Following this disaster, sugar commodity and coal triggered rises in many other commodities.
Thailand is currently the top exporter of rice with estimated 9.03 million tonnes of rice shipped overseas in 2010. Since 1962, Thailand has been the world’s leading rice exporter after Myanmar adopted a socialist system and lost its former primacy in the trade.
Other cereals for tropical and temperate regions include wheat, barley, oats and maize that serve as supplementary food but any disruption of rice production will unimaginably puncture the economy of Thailand and also the eating habits in Asians.
In addition, it has also been regarded as top exporter of rubber, canned pineapple, frozen fish and prawns. Thus, the impact of floods that handicapped Thailand’s economy for about two months had brought disastrous damages to national incomes as well as economic status of its citizens.
Comparing the ongoing disasters that would hit the earth in future years relatively to the growing population around the world, it would be a threat to human’s survival if food commodities become less over next few decades. After World War II ended, the global human population was estimated about 2.5 billion in 1950’s and it has grown to 6.9 billion in 21st century.
Since then, the annual growth rate was above one per cent and even peaked about 2.2 per cent in 1963.
By statistics, the total annual birth rate was highest in the late 1980s at about 138 million per annum but moving constantly now at 134 million annually. Motility rate is charted at 56 million averagely per year. According to United Nation, human population has already exceeded seven billion and still continues to grow. At current rate of growth, it is projected that we shall expect 10.5 billion people in 2050.
In our opinion, the imbalance of supply and demand in food commodities would eventually drive huge global inflation and cause food shortages throughout the world. Therefore, agriculture businesses would regain its important economic status by the end of this decade as food production shrinks. Holding an investment in agricultural commodity would become a necessity for potential rise in your wealth.
Foo Rong has been trading in financial markets under tutelage of Dar Wong for three years. The expressions are solely his own. He can be reached at fr@pwforex.com.
