Agribusiness index up almost 20 per cent year on year

An index tracking the performance of Australian agribusiness companies is up almost 20 per cent in the past year, a sign of good health for the industry.

Australian agribusinesses’ performance is up almost 20 per cent in one year, according to the major index for the sector.

The S&P/ASX Agribusiness Index, designed to track the performance of ASX-listed companies involved in agriculture-related activities, has seen an 18 per cent rise since this time last year, from the lowest point in the index’s history on October 30 2023, at $1084.

It’s now sitting close to $1300. However, the rise mostly occurred between November to

April where it reached a top of $1375 and has since kept relatively stable.

Rabobank senior analyst Michael Harvey.

Senior analyst at Rabobank Michael Harvey said a few key themes could be behind the performance.

“When you’ve got a fairly decent winter wheat crop, it’s generally quite favourable for those input companies. Things are also starting to improve in China, the recovery is there,” he said.

“You throw in global market conditions, that’s clearly been beneficial. We’ve had record high olive oil prices, because of the impact of drought in the Mediterranean and Spain.

“Clearly equity markets have been pretty strong anyway, it’s not just this index.”

Belinda Moore, senior research analyst in agriculture at Morgans, said the uptick in seasonal conditions, after El Nino and La Nina headlines plagued the industry, could also be attributed to the rise.

“All the agribusiness share prices got absolutely belted about a year ago with the uncertainty over the season, and cattle prices and a number of other things falling off a cliff. This year we’ve seen some better seasonal conditions, it’s obviously mixed across the country, but generally pretty good in the eastern states,” she said.

While Standard and Poors declined to provide a list of constituents of the index, nor their weightings, the index does feature the biggest agribusiness companies across a range of sectors, included below.

Bega Cheese Limited, Australia’s seventh biggest agribusiness, had an 81 per cent increase on share price in the past year, with significant growth in southeast and northern Asia, while Treasury Wine Estates re-established its China market following the removal of tariffs in March.

Other companies in the index, such as Elders and GrainCorp, are preparing to release their annual financial year reports later this month.