SURVEY SHOWS TRUMP ADMINSTRATION'S TRADE POLICY OF TOP CONCERN AMONG AG INVESTORS
Mar. 13, 2017
Trade worries, in a world gripped by the unfolding U.S. presidency of Donald Trump, and the implications of Brexit, represents the biggest concern for world agribusiness investors, results of an Agrimoney.com survey show.
More than one-quarter of respondents to an Agrimoney.com survey, in listing the most important factors facing agribusinesses, flagged trade issues, including the threat of the unwinding of cross-border deals, and the rebuilding of import tariffs.
Many readers linked their concerns to Mr Trump, who has threatened tariffs on imports from China and Mexico, two of the biggest U.S. trade partners in agriculture, besides pledging a shake-up of North America's NAFTA treaty, and withdrawing the U.S. from the Trans-Pacific Partnership with countries such as Australia and Japan.
Indeed, Mr Trump himself was flagged by nearly 20% of respondents as among key factors for agribusiness - either named in isolation or linked to policies on the likes of trade or biofuels.
The survey was undertaken ahead of the rumours last week of reforms by Mr Trump to U.S. biofuel policy, talk which boosted prices of commodities such as corn, used to make ethanol, and soyoil, a major feedstock for biodiesel plants.
Brexit was named as a major concern by 15% of respondents, with a concentration among those in European readers.
The elephant in every room
"Mr Trump is the elephant in every room, including agriculture," one investor told Agrimoney.com
"People want to know which way he is going to jump. It could be crucial for a lot of decision making."
Monica Ganley, principal at advisory group Quarterra, said: "The U.S. has benefited greatly from agricultural trade.
"What will happen to that?" if Mr Trump's policies fuel battles with major trade partners.
At U.K.-based Green Square Agro Consulting, Mike Lee, highlighting also Brexit, said: "This is the most bizarre times we are living through in terms of politics and agricultural policy."
He added that he "would be worried" if he were a U.K. farmer.
Currency, climate, Cargill...
Other frequent areas of concern raised by the survey included weather and climate factors, including global warming, mentioned by one-quarter of respondents.
Currency swings and foreign exchange uncertainty were cited by 18% of respondents, and Chinese issues, including its future economic growth and agricultural consumption, by 10%.
Urbanisation, agrichemical regulations, speculators, oil prices, and the hold of the big four agribusiness groups, Archer Daniels Midland, Bunge, Cargill and Louis Dreyfus, over ag trading were also among topics raised.