There are many agribusiness products that one can look into as an alternative investment. Diversifying your investments creates less risk when you’re investing your money, but it all depends on your financial goals. We have compiled a list of our top picks of agribusiness products that could interest you in your next investment scheme.
Agarwood
Agarwood is derived from the Aquilaria tree and is often considered to be “liquid gold” because of its high market value. It is locally grown in India, Thailand, Malaysia and other eastern countries. Agarwood, however, is formed by external factors, like when insects infect the Aquilaria tree or there is a rotting occurring. When the tree is “attacked,” it reacts by creating a fragrant discoloured fungus located at the heart of the tree (hence the name – heartwood). This highly sought after product is then used in fragrances, medicines and various cultural ceremonies.
Agarwood products can be in the form of oil, wood chips or powder. These by-products are used for incense and ceremonial purposes. It’s even used in luxury perfumes. There are agarwood investment schemes where research has found a way to successfully infect each Aquilaria tree, which has its advantages. This method is sustainable and protects against illegal deforestation. Market Research Future estimates the global agarwood essential oil market will reach up to USD 201.03 Million by 2025 and is estimated to register a CAGR of 5.92% during the forecast period (2018-2025).
Bamboo
Bamboo is a versatile product when it comes to its end-use. It can be applied to construction, manufactured to fabrics or even eaten as food. It is self-regenerating, so it replenishes itself when growing. Harvesting bamboo doesn’t require removing the entire plant since new shoots on the shaft replace the old ones. This is a great advantage also because there is regular bamboo production from one plant, which increases yield and a grower’s cash flow. It is also beneficial that bamboo is a healthy food that contains amino acids while being low in carbs.
There is international demand for bamboo as a food and in the timber market, since it is used in construction across the world or even in flooring. It is also a very popular ingredient in Asian cuisines. In addition to its versatile demand, bamboo pellets are also being used as a substitute for energy sources like oil and gas. This increase in demand in the renewable industry sector is appealing today since the climate crisis is on everyone’s mind. Asia produces the most amount of bamboo products, while China is the largest exporter. According to research conducted by Grand View Research, Inc., the bamboo global market can reach up to USD 98.3 Billion by 2025 with a CAGR of 5.0% (2019 to 2025).
Coconuts
Coconut products are mostly food-related, such as coconut chips, milk, sugar and oil. Coconut oil is highly sought out and it’s an edible oil extracted from the kernel of mature coconuts. Its high content levels of lauric acid, antioxidants, and vitamin E make it appealing to consumers concerned with health and wellness. Some studies show the benefits of virgin coconut oil, including the breakdown of fatty acids, elimination of harmful bacteria, and reducing the rate of seizures in children. There are two types of coconut oils: virgin coconut oil and refined coconut oil.
Coconuts are often grown in Malaysia, India and the Philipines. According to predictions by Market Research Future, the coconut industry could reach USD 8.4 Billion by 2025 at 6.37% CAGR (forecast period 2018-2025). Coconut oil is widely used in fragrances and other industries, and due to its ample health benefits, it’s market growth is highly likely to keep rising.
Durian
This thorny fruit has hold a high price tag. Especially in the Malaysian market. A typical tree takes around five to seven years to mature, so it can be seen as a long-term investment. It has a peculiar taste mixed with a strong odour, and it’s even illegal in some locations to have it in public places. This delicacy is very popular in Asia and due to its high price, it can be viewed as a “luxury” fruit.
In May 2019, it was announced that Malaysian companies will be allowed to export frozen whole durians to China, in what is seen as a significant boost to the industry. Malaysia’s durian exports to China have soared since the turn of this decade. According to the United Nations data, shipments of durians from Malaysia into China have reached up to 368 tonnes worth USD 4.34 Million in 2016.
Hemp
This industry can be divided into three groups: growers, medical companies, and service providers. Hemp has gotten a lot of press recently, especially because of the vast increase of using it to extract from it and create CBD oil that can then be used in food or different wellness products. Hemp has a strong history before it got in legal trouble due to its notorious cousin THC, but it’s making a comeback. It is a fast-growing plant that is easier and more sustainable than cotton. Find out our Five Reasons to Invest in Industrial Hemp if you want to learn more about this product.
The global industrial hemp market is expected to reach USD 14.67 Billion By 2026, so many are eyeing this appealing industry to make their next investment. With so many products that can be derived from hemp, the investment companies on the market are growing quickly.
These are just a few agribusiness products that may spark your interest when planning to make your next or future investment. As usual, be sure to consult with a financial advisor and do your research before picking your next scheme. Need help in choosing a financial advisor? Read our feature on How to Choose a Financial Advisor to get you started.
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