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4 ways to position your portfolio for the global food boom

Accurately picking a trend is one way to help position your portfolio to outperform the broader share market.

For example, in the past decade, investors who jumped aboard the resource boom did very well – so long as they got out before the bust!

Currently, many investors are benefiting from a tailwind in the telecommunications sector which is enjoying gains as more consumers spend time and money online and demand more data at faster speeds.

Another theme which is set to provide long-term growth is increasing demand from Asia for high protein food. This theme is set to benefit numerous ASX-listed companies with exposure to the agricultural industry.

Here are four worth monitoring –

Bega Cheese Ltd (ASX: BGA) – the attraction of dairy companies has been highlighted recently thanks to the takeover earlier in the year of Bega’s peer Warrnambool Cheese & Butter Factory Co. (ASX: WCB). China’s rising middle class is demanding increased volumes of dairy product and Bega is positioned to benefit.

Just as dairy is in higher demand in Asia, so too is beef. Boasting one of the world’s largest beef herds and as a major vertically integrated exporter thanks to a new abattoir based in Darwin, Australian Agricultural Company Ltd (ASX: AAC) is positioned to benefit from growing Asian consumption of beef.

There is another angle for investors to gain exposure to food consumption which doesn’t actually require owning food producers or manufacturers.

Service providers such as Ruralco Holdings Ltd (ASX: RHL), which offer merchandise, sales and marketing also stand to benefit. One of the important inputs which Ruralco sells is fertiliser – which is obviously a key ingredient in the farming process. Furthermore, higher volumes are expected to be demanded as Australia’s status as ‘Asia’s food bowl’ rises.

One company, perhaps above all others that could stand to benefit the most from increased global demand for fertiliser is Rum Jungle Resources Ltd (ASX: RUM), which is developing the Ammaroo Phosphate Project.

While the company has a market capitalisation of just $29 million, it is sitting on what is described as a ‘world-class’ phosphate resource with an estimated size of over 1.1 billion tonnes. Notably, phosphate is a key ingredient from which fertiliser is derived.

How to profit from this $160 billion tech revolution

Accurately picking an investment theme that can provide a tailwind to your portfolio can be a clever move. The agricultural sector and Asia's growing demand for protein could be one such trend, but there is another theme which investors really ought to be aware of! Attention investors: The Motley Fool has just released a special video report on our analysts’ #1 ASX tech pick -– all about the one Australian company poised to win big from the ‘cloud computing’ trend. (Hint: The shares are already up over 100%!) Click here to claim your FREE copy.

Motley Fool contributor Tim McArthur owns shares in Rum Jungle Resources Ltd.

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