Sheng Siong, Japfa among winners from food inflation: analysts

AS COMMODITY prices soared last year, so, too, did the share prices of commodity producers and distributors. This year, as food prices soar, investors could expand their portfolios to include not only palm oil producers but also food manufacturers.

Tighter food supplies will lead to greater bargaining power for food companies, as well as gross margin expansion, said UOB Kay Hian (UOBKH) analyst Kampon Akaravarinchai in a report earlier this month.

RHB analyst Jarick Seet said investors can best take advantage of the food inflation theme by seeking out companies that have demonstrated the ability to pass on costs to consumers without affecting demand.