By Andrew Mickey I’d have to say Neyla Khatokhov, a nurse in the tiny southwestern Russian town of Nalchik, is your average Russian. She fits right in. Neyla, a single, manages to support her two sons on about $120 a month. That’s an average salary in small Russian towns that haven’t experienced the economic booms of St. Petersburg and Moscow.
But what makes Neyla famous is her other source of income. Neyla has turned her youngest son, Dzhambulat Khatokhov, into one of the highest paid people in town.
You see, Dzhambulat is not your average kid and his fame is steadily growing worldwide. Reporters travel from thousands of miles away just to meet him. Regrettably, he’s not the next Russian chess guru or anything like that. Dzhambulat is the fattest kid in the world.
At 6 years old, Dzhambulat is only 4 ft. 7 in. tall, yet weighs 209 lbs. He’s a local celebrity and his mother charges as much as $500 for a reporter to meet him.
With his celebrity status Dzhambulat serves as a symbol of the growing wealth of people that live in emerging economies.
The world population is getting richer, and the first thing everyone is buying isn’t a new Mercedes or Rolex watch; they’re buying food. According to Chinadaily.com, more than 200 million Chinese, or 23% of the population, are officially overweight. Nearly 60 million of those are officially classified as obese.
Worldwide food demand is growing, and continued economic growth around the world is only going to spur more and more food demand. Once you add the growth in the world population to the mix, you’ve got one heck of an investment opportunity cropping up (pardon the pun) in the agricultural industry.
Right now the world population is about 6.6 million. By 2030, there’s going to be 8.2 billion people. I realize that’s only about 24% growth, nothing we’d normally pay attention to.
However, they’re eating more and more. Currently, the average amount of food eaten per person is 2,600 calories per day. However, those living in developed parts of the Western world, like the U.S. and Europe, consume about 3,200 calories per day. In the east, the Japanese eat about as much.
Thanks to improving and developing economies, the average intake is going to about 3,000 calories per day by 2030. Again, 2,600 to 3,000 calories per day is only a 15% increase. And that’s over 23 years yet.
With numbers like these, it’s no wonder the world hasn’t caught onto how big growth in the agricultural industry will be. But that’s not all.
The world is moving into cities more and more and demand for food will only continue to increase. According the United Nations, 2007 marks the first year in history where cities have more people than rural communities. Now, more than 50% of the world lives in townhouses, apartments and other urban housing structures.
And this is just part of the trend. Only 13% of the world’s population lived in cities in 1900. That surged to 29% in 1950. In 2005, 49% of the world’s population lived in urban centers.
It won’t be long until 55%, then 60%, then 65% of the world’s population lives in cities. Urbanizing populations have a staggering effect on the world, but its impact is greatest in the agriculture industry.
A lot goes on in cities like manufacturing, shipping, research, education and technological development. But one thing that doesn’t is farming. There’s just not enough land. As a result, an urbanizing population demands more and more food without the wherewithal to produce it.
RFor instance, more than 60% of Beijingers are overweight and the percentage of the population in this category is growing by the day. But that growth is pushing the global food supply-demand situation, which is already very tight, further into imbalance.
The world is getting richer, moving into cities, eating more, and Russia and China are just two examples. The global agriculture boom is still in the very early stages. The Market Vectors Agribusiness ETF (MOO:NYSE) is already up 30% in the past three months, and there’s more to come.
In the most recent issue of my premium investment advisory, BreakAway Investor, we took an in-depth look at the consequences of an urbanizing world that’s eating more and more and the best way to play it. The two stocks we took a look at aren’t found in an ETF that owns such mega-cap stocks as Potash Corporation of Sasketchewan (POT:NYSE) and Deere (DE:NYSE).
Frankly, those two companies are just too big and the upside is quite limited. We look for the smaller undiscovered opportunities in such massive trends like these.
