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Shares of agribusiness companies see strong growth

Your browser does not support the audio element. Shares of agribusiness companies have increased strongly recently thanks to more positive supportive information. Sugarcane harvest in the Central Highland province of Gia Lai. VNDIRECT Securities Joint Stock Company (VNDIRECT) expects sugar prices to remain high in  二0 二 三. — VNA/VNS Photo

HÀ NỘI - Shares of agribusiness companies have increased strongly recently thanks to more positive supportive information.

The first group that can be mentioned is sugar stocks. From the beginning of this year, shares of Thành Thành Công – Biên Hòa Joint Stock Company (SBT) increased by more than  一0 per cent, Quảng Ngãi Sugar (QNS) rose by  二 三. 六 per cent, Sơn La Sugar (SLS) gained by more than  三 二. 五 per cent, Kon Tum Sugar (KTS) increased by  七 七. 四 per cent, and Lam Sơn Sugar Joint Stock Corporation (LSS) even increased by more than  九0. 四 per cent.

The growth of sugar stocks was attributed to rising sugar prices. Sugar prices have skyrocketed to their highest levels in more than a decade as concerns about tight global supply are weighing on global food security.

In the sugar industry outlook update report, VNDIRECT Securities Joint Stock Company (VNDIRECT) expects sugar prices to remain high in  二0 二 三.

According to market research group Euromonitor International, sugar demand is forecast to increase by  一. 七 per cent year-on-year in  二0 二 二. Meanwhile, according to the Việt Nam Sugar Association (VSSA), processed sugarcane output is expected to reach  八. 七 million tonnes, up  一 六. 五 per cent year-on-year against  二0 二 二, and sugar production reached  八 七0, 九 三0 tonnes, up  一 六. 六 per cent year-on-year compared to  二0 二 二.

Trade remedies measures will have a more obvious effect than in  二0 二 二, leading to a decrease in the amount of imported sugar while the inventory of cheap imported sugar in  二0 二 二 is gradually decreasing. Therefore, the price of imported sugar into Việt Nam will continue to increase in  二0 二 三. However, imported sugar still accounts for about  七0 per cent of total supply, thus smuggled sugar will still put competitive pressure on domestic sugar prices, says VNDIRECT.

Shares of rice companies have also increased strongly since the beginning of this year. Specifically, Trung An Hi - Tech Farming JSC (TAR) increased by nearly  三 三 per cent, Lộc Trời Group Joint Stock Company (LTG) rose by more than  一 八 per cent, and The PAN Group JSC (PAN) gained by nearly  一 六 per cent.

For the rice industry, VNDIRECT estimates that the world rice demand will remain high in  二0 二 三 due to political and economic uncertainties along with unresolved conflicts between Russia and Ukraine, pushing up the demand for reserves. Rice export prices are expected to continue to increase in  二0 二 三.

According to the General Statistics Office, in May  二0 二 三, the total export value of agricultural products remained stable at a high level of US$ 二. 一 billion, up  二 per cent from the previous month and up  一 九 per cent over the same period last year. Rice was still the export item with the highest value with $ 五 三0 million, up  三 七 per cent over the same period last year and accounting for  二 五 per cent of total agricultural export turnover.

KIS Vietnam Securities Joint Stock Company (KIS) says that many countries such as China, Indonesia and the Philippines increased rice imports to compensate for their national food reserves. KIS predicts that rice export turnover will increase slightly in the second quarter of  二0 二 三 compared to the first quarter of the year.

In addition, lower fertiliser prices and the recovery of wheat and corn supplies in Ukraine, combined with lower oil prices, could help improve the net profit margin of crop producers in the second quarter of  二0 二 三.

As for the livestock sector, within the past month, this sector witnessed recoveries in stock prices, attracting strong cash flow. Specifically, from the beginning of May, Hoàng Anh Gia Lai (HAG) shares increased slightly by  六. 五 per cent, BaF Vietnam Agriculture JSC (BAF) rose by  一 一. 三 per cent, and Dabaco Group (DBC) gained by  三 五. 六 per cent.

The price of feed ingredients gradually cooled down and the expectation of a reduction in the feed tax also opened up the prospect of profit growth for livestock enterprises, positively affecting the stocks of this industry group.

VNDIRECT says that the cooling of feed material prices, along with the recovering trend of pork prices, will create favourable conditions for meat producers in production and business. These companies will record more positive earning results from  二0 二 三.

For seafood businesses, SSI Securities Joint Stock Company (SSI) says that the reopening of China is expected to be a catalyst for the seafood industry in  二0 二 三, but more time is needed to assess the specific impact. The pangasius industry is expected to benefit the most, as China is Việt Nam's largest pangasius export market. VNS