Index description: Shares for companies of medium and large capitalisation form the ETF for the Market Vectors Global Agribusiness Index (the global index for agricultural companies). The agro-industrial sector for this index split by share for various countries is as follows: US – 56.73%, Switzerland – 7.44%, Canada – 7.33%, Japan – 6.64%, Norway – 4.24%, Australia – 3.44%, Malaysia – 2.63%, Singapore – 2.45%, Germany – 1.77%, Thailand – 1.52%. The largest investors in this ETF are: Bank of America (4.43%), Morgan Stanley (1.27%) and UBS Group AG (1.14%).
There is growing demand for grain cultures from the EU, Indonesia and the US. Global demand for grain has been constantly on the rise for the past 10 years and is rising at an average of 2.3% per year due to the rising global population. Demand in 2014 was 2.504 billion tonnes (including: wheat – 710.9 million tonnes, feed – 1.301 billion tonnes, rice - 491.6 million tonnes), in 2015 it was 2.524 billion tonnes (including: wheat – 720.3 million tonnes, feed – 1.307 billion tonnes, rice - 496 million tonnes), and in 2016 it is expected to rise to 2.556 billion tonnes (including: wheat – 726.3 million tonnes, feed – 1.326 billion tonnes, rice – 503.2 million tonnes).
There has been a fall in the level of production of grain cultures in Brazil and Turkey due to drought, and in China due to a reduction in state subsidies for agriculture. If global production of grain cultures in 2014 was 2.563 billion tonnes (including: wheat – 750.5 million tonnes, feed – 1.338 billion tonnes, rice - 494.6 million tonnes), then in 2015 it dropped to 2.528 billion tonnes (including: wheat – 734.1 million tonnes, feed – 1.304 billion tonnes, rice – 490.6 million tonnes), and in 2016 it is not expected to exceed 2.543 billion tonnes (including: wheat – 732.1million tonnes, feed – 1.316 billion tonnes, rice – 465.3 million tonnes).
Continued global population growth will stimulate further demand for grain and companies in the agro-industrial sector will gain from this.
There is expected to be a deficit from 2016 due to demand for grain outstripping supply (in 2016, demand for grain is expected to be higher than supply by 11.8 million tonnes).
Investment period ends: 19/05/2017
Expected yield is calculated according to 97% capital protection and the price of the base asset at expiry, equal to 63 USD.
The price for ETFs for the global share index for companies of the agro-industrial sector has broken upwards through the 50, 100 and 200-daily moving averages and left the Ichimoku cloud upwards. A long-term upward trend is starting to form.