Emerging market demand for superfoods has caused a surge in blueberry prices, and investors are finding new ways of accessing the market. Annabelle Williams reports.
Global agriculture over the past 30 years has been shaped by one overriding force: that of Western demand driving supply from poorer, producing countries.
But growing affluence in Asia and Latin America is causing a surge of interest in foods not normally found in traditional diets, and Western farmers are responding.
Take pecans, for example.
Traditionally, Asian countries have responded to demand from the West. Now the tables may be beginning to turn.
The Chinese believe eating these nuts can help improve memory, and demand has soared in recent years. However, pecans can only be grown in a small belt of land across the sunny southern states of the US. Farmers there have begun to access this market growth by switching production over to pecans.
Traditionally, Asian countries have responded to demand from the West, switching production over to crops and goods popular in Europe and the US. But farmers in the US planting pecans in response to Asian demand is a sign the tables may be turning.
The same trend is under way with blueberries, another crop well known to US consumers, but little known in Asia and Latin America.
Blueberries have rocketed in price over the past year, as their status as a ‘superfood’ has stimulated demand among increasingly affluent and health conscious consumers.
Exports of blueberries to Argentina, for example, have been increasing 17% year-on-year.
This fruit is also fast becoming a staple ingredient in ‘natural’ beauty products. In China, companies are marketing blueberries as a medicinal ingredient in teas and pills.
These factors mean global production of blueberries has increased 50% since 2008 and is expected to double again before 2018, according to the US Highbush Blueberry Council.
As the world’s largest producer of blueberries, the US is making a sizeable contribution to this, and an extra 37,000 acres of farmland has been given over to the fruit in the last few years.
The agriculture sector has a very low correlation with equity markets, and returns are generally locked in for a period of at least ten years while the asset is productive. This aspect of agriculture is particularly pertinent for investors, since many have noticed an attitude of short-termism creeping in to markets, explained David Garner, partner at real estate investment house DGC Asset Management.
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