Aguytrying wrote:VituVingiSana wrote:Tea prices have crashed. Williamson down to 210 in trades. Potential drop again as tea prices drop to lowest levels in 2 years while KES is stronger at 84-86 vs 84-107 last year. Inflation means costs have risen substantially during the same timeframe.
India's tea production has jumped, Egypt's imports from Kenya have shrunk. Tough times are coming.
Time to buy the fear? when the discount gets too sweet?
Buy when there is blood on the streets. Agriculturals are NOT for the faint-hearted or those with a short-term horizon.
Of major concern is politics for Williamson.
1) The farms are deep in RV. If there is a fallout [see 2008] then what? Some equipment was destroyed in 2008 but it was hushed up. Probably not to become the target of malicious or vindictive politicians.
2) Many tea pickers fled in 2008 & never returned, and many were sent home in 2013 occasioning losses/costs.
3) Land is emotive in Kenya.
4) Population growth. Overpopulation leads to pressure on large well-run farms like those owned by Williamson.
5) Rule (or rather the lack of) of law when dealing with populists, populism & politicians.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett