Skip to main content

1. Food fight…

World food prices jumped nearly 13% in March. The Food and Agriculture Organization’s (FAO) food price index hit a new record last month, following what was a record print in February. And is now up more than 50% since mid-2020. The war in Ukraine has caused turmoil in markets for staple grains and edible oils. Russia and Ukraine are major exporters of wheat, corn, barley, and sunflower oil. Meanwhile the Biden administration announced temporary plans to allow higher ethanol blends in gasoline to help lower consumers fuel costs. The use of gasoline with 15% ethanol, dubbed ‘E15’, is set to raise demand further for corn and other ‘biomass’ products.

The looming food fight bodes well for the agriculture exposed stocks across the Firetrail funds – including Archer Daniels Midlands in the S3 Global Opportunities Fund, and Nufarm and Incitec Pivot in the Australian funds.

UN Food and Agriculture World Food Price Index – Price change (1 month %)

Source: Bloomberg

2. All in the price

Electric vehicles (EVs) have not escaped the impact of the volatile commodity moves of late. The price differential between internal combustion engines (ICE) and EV raw materials has gone from USD ~$2,000 to now USD ~$6,000, as shown in the chart below. This means Battery EV’s are about to get $4,000 more expensive holding all else equal. The price move makes sense given lithium is in short supply and the market is trying to slow down demand. We wait to see if this impacts EV penetration rates over the coming months.


3. Time to Fly

Delta Airlines reported a March quarter beat this week. Their CEO commented that “for the last month we have seen the highest sales and booking activity on Delta than any time in our history,” despite offering only 90% of its pre-pandemic seats for sale. And we’ve all heard about the chaos happening at Sydney airport right now due to staff shortages and ‘rusty’ passengers! Spending rose again through March in Australia, and we are keeping an eye on the rising overseas travel spend…


Source: ABS, CBA, Google, RBA, Macquarie


This article is prepared by Firetrail Investments Pty Limited (‘Firetrail’) (ABN 98 622 377 913, AFSL 516821) as the investment manager of the Firetrail Australian High Conviction Fund (ARSN 624 136 045), the Firetrail Absolute Return Fund (ARSN 624 135 879), the Firetrail Australian Small Companies Fund (ARSN 638 792 113) and the Firetrail S3 Global Opportunities Fund (ARSN 653 717 625) (‘the Funds’). Pinnacle Fund Services Limited ('PFSL') (ABN 29 082 494 362, AFSL 238371) is the product issuer of the Fund. PFSL is not licensed to provide financial product advice. PFSL is a wholly-owned subsidiary of the Pinnacle Investment Management Group Limited (‘Pinnacle’) (ABN 22 100 325 184). The Product Disclosure Statement (‘PDS’) and Target Market Determination (‘TMD’) of the relevant Fund are available via the links below. Any potential investor should consider the PDS and TMD before deciding whether to acquire, or continue to hold units in, the Fund.

Links to the Product Disclosure Statement: WHT3810AU, WHT5134AU, WHT3093AU, WHT7794AU

Links to the Target Market Determination: WHT3810AU, WHT5134AU, WHT3093AU, WHT7794AU

For historic TMD’s please contact Pinnacle client service Phone 1300 010 311 or Email

This communication is for general information only. It is not intended as a securities recommendation or statement of opinion intended to influence a person or persons in making a decision in relation to investment. It has been prepared without taking account of any person’s objectives, financial situation or needs. Any persons relying on this information should obtain professional advice before doing so. Past performance is for illustrative purposes only and is not indicative of future performance.

Whilst Firetrail, PFSL and Pinnacle believe the information contained in this communication is reliable, no warranty is given as to its accuracy, reliability or completeness and persons relying on this information do so at their own risk. Subject to any liability which cannot be excluded under the relevant laws, Firetrail, PFSL and Pinnacle disclaim all liability to any person relying on the information contained in this communication in respect of any loss or damage (including consequential loss or damage), however caused, which may be suffered or arise directly or indirectly in respect of such information. This disclaimer extends to any entity that may distribute this communication.

Any opinions and forecasts reflect the judgment and assumptions of Firetrail and its representatives on the basis of information available as at the date of publication and may later change without notice. Any projections contained in this presentation are estimates only and may not be realised in the future.

Unauthorised use, copying, distribution, replication, posting, transmitting, publication, display, or reproduction in whole or in part of the information contained in this communication is prohibited without obtaining prior written permission from Firetrail. Pinnacle and its associates may have interests in financial products and may receive fees from companies referred to during this communication.

This may contain the trade names or trademarks of various third parties, and if so, any such use is solely for illustrative purposes only. All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with, endorsement by, or association of any kind between them and Firetrail.