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5 Food Stocks to Whet Investor Appetite

NEW YORK ( TheStreet) -- Food prices have spiked to their highest levels since 1990, driven by shifts in the dollar index and rising oil prices. The United Nation's Food and Agriculture Organization's (FAO) World Food Price Index averaged 232 points in April 2011, 36% above the April 2010 reading, and rose marginally above 231points recorded in March 2011.

The FAO Meat Price Index, although at a record level, remained stable at 173 points in April 2011 as compared to a revised estimate of 172 points in March 2011. The April FAO Cereal Price Index averaged 265 points, up 5.5% from March and 71% from the year-ago month.

Dr. Jacques Diouf, Director General of FAO, commented that the weak trend in world food prices has started to reverse and prices are set to revive on the concern of winter crops in China and the U.S. He further added that with demand escalating, the likelihood of prices returning to normal levels largely depends on production increases in 2011 and replenishment of grain reserves in the new season. The FAO estimates that by 2050, grain output has to rise 50% and meat output has to double to meet growing demand.

In this scenario, the following food stocks seem attractive with buy ratings ranging from 12% to 32% with a mean upside of 19%, according to analysts polled by Bloomberg.

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