Shares in agribusiness and bookmaking companies have been hit hard by the growing food and mouth disease crisis.
Since news of foot and mouth broke on February 21, shares in food stocks have dropped by up to 20%. Glanbia has fallen from 58 cents per share jut over a week ago, to 43 cents today. Kerry is down from 13.70 to 13.10, despite positive full years results; and Golden Vale is down from 1 euro to 80 cents per share.
The cancelling of sporting events, and fears for the Cheltenham racing festival have also hit recently floated Power Leisure, which is down from 3.50 euros last Tuesday, to 3.10 euros today.
Liam Igoe, food analyst at Goodbodys Stockbrokers, says the food sector slump means the market has largely priced a worst case scenario into stocks. He says implications for the pig sector have hit Glanbia, which has a large pig meat operation in Britain.
The crisis also has an indirect impact on supply prices for added value food products like pizzas. Increased prices for toppings may hit profit margins if consumers will not pay more for goods.
Igoe says that export licences outside the EU will be affected. Renegotiation of these licences will prevent the export of dairy products to the US and milk powder to places like South America.
Exports of Irish beef are worth £1.1 billion, sheepmeat worth £145 million, and pigmeat exports worth £220 million.
Whilst Igoe says bookmaking shares have been hit, he does not believe the cancellation of the Cheltenham festival will impact on Power Leisure. He says the festival gives the company just as much chance to lose £1 million as to gain it.
Fears, however, remain that if the food and mouth outbreak does spread across the border into the Republic, then a ban on trade within the EU of meat and dairy products will quickly follow.
