More on Agri-and Food stocks
Combined exports of tobacco, petroleum products, food and mineral products are by far Thailand's biggest single group of total export revenues.
The kingdom should perhaps be better known for its agriculture and fisheries, than for its much fanfare now recession plagued, service, finance and 'big-ticket' industries. The recent Baht devaluation is clearly the new major positive here. Consider, versus the EC and the US, the local Thai currency is currently some 60% cheaper than 6 months ago. Hardly a marginal amount.
Thailand has a most impressive fishing industry, virtually ranking among the biggest in the world. The annual catch reaches over three million tons of which some 90% are marine fish while remaining are freshwater fish….
While non-food related commodities are often price-depressed especially in today's global low inflation environment….neverthlesess, the country produces over 40 different minerals including limestone, zinc, tin, lignite gypsum and gemstones. Thailand has huge reserves in rock salt. This is claimed to be the world's largest reserve. Located in the Northeast with known reserves reported to be 5 Billion Tons. Rock Salt is used in the production of detergent, toothpaste, seasoning powder, chlorine, plastic batteries, corrugated iron, dyes, freon, soap, even fish sauce.
"Not so long ago, food processing was Thailand's biggest manufacturing industry."
The food processing industry has expanded steadily over the past decade, although not as rapidly as other industries of which many, are now on an economic downturn… Today, food processing remains an ever more important export earner…
Before and after, data shows that agriculture has contributed enormously to the foreign exchange earnings capabilities of Thailand.
Total agricultural employment has remained very high in comparison with the contribution of agriculture to the country's total GDP. This indicates very low labor productivity in the agricultural sector. Even a small improvement will make a big difference in productivity.
| The main point here being that, even after years of rapid industrialization Thailand still has around 60 % of the countries total work force employed in the agricultural sector…A recovery here would be broad based. |
Top down' global investing habits in emerging markets, a decade now in progression, has given rise to immense market mis-pricings! The Thai Agri- and Food procession business, is a very good example of massive valuations discrepancies. Here is one of Thailand's "big-industries", besides a shinning exporter! Global investors have neglected smaller "jewels" to an irrational degree!" Today, this is already changing… and it is just the beginning.
Best Regards,
Paul A. Renaud. www.thaistocks.com
