Food is the New Gold. This is how You can Profit from it in the Market

Forest fires raged. Traffic signals melted.

Roads turned sticky and caved in. Windowpanes developed cracks.

Bridges and cars had to be wrapped in tinfoil to prevent damage.

The images from London last week, as temperatures crossed 40 degree Celsius, were bizarre and scary!

But probably these were just the trailer to what is yet to come. Climate change is here. In future, its repercussions could be felt on where we live, how we live and most importantly, what we eat.

Food security has become a matter of global concern in recent times.

China and India, together house 37% of the world's population. They also produce the bulk of the food crops globally, like wheat and rice. So naturally, the world expects India to store its produce optimally.

Even as the world grapples with food shortages and rising inflation, India's warehouses are brimming over with grain. Every year there is a good monsoon, we have record harvest.But that does not necessarily mean exportable surplus.

Out of India's total farm yield, 15-20% gets wasted due to poor warehouse infrastructure. Other countries have wastage in the range of 5-10%.

Building food parks with adequate warehouse infrastructure is therefore imminent. Both for India's own food security and to have exportable surplus.

And mind you... food security is a REAL problem.

The Indian government's efforts to build food parks tries to address a real problem, which has worsened since the Russia-Ukraine war.

Unlike Saudi Arabia's trillion-dollar construction projects and China's abandoned electric car graveyards, Indian food parks could offer food security across the globe.

So, the proposed US$ 2 bn investment by UAE and the technical collaboration with Israel for developing integrated food parks comes at an opportune time.

Now, India's recent agriculture reform bills have encountered several controversies. But there are underlying tailwinds that offer ample scope for use of technology in the sector.

India's agritech sector has come a long way.

There were 43 agritech startups in 2013. By 2022, there are more than 1,000 of them.

These are driven by rise in rural internet penetration, rise in post-harvest and supply chain losses, and lack of finance and high-quality inputs for farmers.

India's agritech start-ups have been growing at 25% YoY. The market is estimated to reach US$ 35 bn by 2025. That's precisely the reason I call it the 'new gold'.

Startups operating in the Farming-as-a-Service (FaaS) segment address supply chain issues farm mechanisation, crop advisory, and access to markets.

Bluechips seeking an exposure to agritech startups could look for ones exploring solutions around robotics, big data, smart equipment, IoT sensors, and farm management software.

So even as investors flock to stocks of pricey and well known food companies like Nestle, Britannia, ITC and Marico, the agritech companies could be the real heroes of India's food and farming revolution.

One of India's leading agri stocks is investing big in such agritech startups. While the stock has corrected by about 20% from peak, investors hoping to profit from the 'food gold' could benefit from its benign valuations too.

More on this later. Stay tuned...

Warm regards,


Tanushree Banerjee
Editor, StockSelect
Equitymaster Agora Research Private Limited (Research Analyst)

PS: Just like in agritech, some niche companies in India's space tech sector also offer very promising upsides over the long term.

Watch my video on India's space tech opportunity to know why I believe that the upside in this could be bigger than that in electric vehicles.