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3 stocks to buy for the Japanese Free Trade Agreement

Today’s address by the Japanese Prime Minister Mr Shinzo Abe to the Australian Parliament follows the signing of an historic Free Trade Agreement (FTA) between Australia and Japan back in April this year. The FTA paves the way for liberalising exports between our two countries with the Australian agricultural industry a key beneficiary.

Australian primary producers of beef, dairy and wine look set to be major winners. Here are three companies set to benefit from the FTA deal.

Bega Cheese Ltd (ASX: BGA) is already riding high after the takeover battle for peer Warrnambool highlighted the value international acquirers are willing to place on strategic dairy assets. The opening up of exports to Japan will be a major opportunity for Bega which specialises in cheese, milk powder and proteins manufacturing. All of which have long shelf lives and higher value/weight ratios making them ideal products for export markets.

Australian Agricultural Company Ltd (ASX: AAC) owns Australia’s largest beef herd and importantly also Australia’s largest Wagyu beef herd. Also, the soon to be completed Darwin-based abattoir is ideally situated to cater for any increased export demand resulting from the FTA.

Treasury Wine Estates Ltd (ASX: TWE) owns many of Australia’s pre-eminent wine brands. The company’s wines continue to be popular in China and the further opening up of access to the Japanese market would help the company diversify its sales base and expand its supply chain.

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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

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