Global Agribusiness Is A Good Diversification

Food shortages and high food inflation have emerged not just as India-specific problems; they are global problems that will only intensify in the years to come. And shortages, as we know, spell investment opportunities. DWS Investments has recently launched a fund-of-funds called DWS Global Agribusiness Offshore Fund. Its underlying fund, DWS Invest Global Agribusiness, invests in a wide range of agribusinesses - the entire food chain and in almost every business allied to agriculture. During a recent trip to India, William Barbour, Director and Investment Specialist at DWS Investments, made a strong pitch for the fund. His key arguments: agribusinesses offer a great opportunity currently, and they will allow Indian investors to diversify their portfolios, given the paucity of investment options belonging to this theme within India. Excerpts from an interview with Sanjay Kumar Singh: What are the key drivers of agri-business globally? There are five main factors driving global agribusiness. The main ones apply very much to India as well. The first is rising population growth: we are growing at the rate of 80 million people a year. We will grow from 6.8 billion currently to 8 billion people over the next 10 years. We are also urbanising rapidly and living longer, all of which are creating more demand for food. The second and most exciting development from Indians' perspective is rising wealth in the developing world. When people earn around $1,000 per capita annually, they spend most of it on food and shelter. India's per capita income has now reached a tipping point. After this people here will spend more money on more food and better-quality food. In much of the developing world there is also shift to a higher-protein diet from a predominantly cereal-based diet. In India the government also has schemes going to help the poor. It is offering guaranteed employment schemes that have helped low-paid workers move from one meal a day to two meals a day. All