Major agribusinesses are experiencing surging profits based on the huge world food demand, which is driving millions of people towards starvation. Speculation is helping to drive the prices of basic foodstuffs out of the reach of the hungry. For instance, the prices of wheat, corn and rice have soared over the past year, leading some of the world''s poor into hunger.

According to the World Bank, more than 100 million people are confronting severe hunger while some of the world''s biggest food companies are recording huge profits. For example, Monsanto last month reported that its net income for the three months up to the end of February this year had more than doubled over the same period in 2007.

In addition, the Mosaic Company, one of the world''s largest fertilizer companies, saw its latest net income increase more than 12-fold due primarily to a shortage of fertilizer. The prices of some kinds of fertilizer have more than tripled over the past year as demand has outstripped supply. As a result, plans to increase harvests in developing nations have been adversely impacted.

Based on a recent Food and Agriculture Organization study over 35 developing countries are in dire need of food and food riots are breaking out across the globe from Bangladesh to Burkina Faso, from China to Cameroon, and from Uzbekistan to the United Arab Emirates.

The increased prices of food and fertilizers primarily come from increased demand. This has partly been caused by the explosion in biofuels, which require vast amounts of grain, but even more by increasing appetites for meat, especially in India and China. Global food stocks are at record lows, export bans and a drought in Australia have contributed to the crisis, but experts are also pointing to food speculation. For instance, index-fund investment in grain and meat has increased almost 500 percent over the past year.

Look for many of these multinational food companies to draw even more scrutiny especially as world leaders begin to meet next month at a special summit on the food crisis, and it will be high on the agenda of the G8 summit of the world''s wealthiest countries in Hokkaido, Japan. The meeting is scheduled to begin for July 8^th.

Happy Trading.


Jeff Neal 
Senior Writer, Options Strategist & Profit Strategies Radio Show Market Correspondent
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