As the local sharemarket continues to suffer from a global credit crunch the agribusiness sector remains resilient.
The Commonwealth Bank Agribusiness Index (CBAI) delivered a 19.1 per cent return in the past six months to 12 March 2008, while the S&P/ASX 200 index fell by 13.7 per cent in the same period.
The CBAI is made of 15 locally listed agribusiness stocks ranging from food distribution to fertilisers and forest products.
The sector has performed strongly as recent rains have broken the drought in many parts of eastern Australia, Commonwealth Bank of Australia (CBA) executive general manager of agribusiness Jon Sutton said.
Another factor that helped strong returns is the record price of wheat due to a higher use of biofuels in the United States, Sutton said.
"This shift has contributed to global wheat stocks reaching 30 year lows and prices rising to over $400 a tonne," he said.
Analysts are forecasting that the sector will remain strong and return around 40 per cent in the next 12 months, a CBA research note said.
"Agribusiness once again remains the best risk-adjusted sector play for the coming year followed by energy, consumer discretionary and health care," it said.
