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Nutty new entrant for London

Olam Food Ingredients should add some spice to London’s main board, after a strong year for soft commodities
Nutty new entrant for London

Olam International (SI:O32) wouldn’t mind you calling their strategy ‘nuts’. That’s because it is. The Singapore-based farming and trading company is about to give London investors the big sell on its food ingredients business, which farms and sells cocoa, coffee, spices, dairy and nuts. It will spin off and list this division in London by the end of the year. 

‘Soft’ commodities, ranging from bulk crops like wheat, soy and corn, to coffee and cacao and cotton, have seen major price gains alongside their harder counterparts in the industrial space in the past year. This was driven by both pandemic demand and the effects of drought and other difficult conditions on supply. 

Brazil is a key producer of many crops and has struggled with drought this year. Arabica coffee prices surged to over $2 a pound (lb) last month, a seven-year high. Sugar supply was also hit by the dry weather, and futures contracts are trading two-thirds higher than a year ago. 

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