Sat, Jan 20, 2018
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

New record prices bring truffle investments into the spot light

Tuesday, November 14, 2017
Opalesque Industry Update - There has never been a better time to invest in truffles according to experts, as prices soar to record levels. The truffle growing regions of France, Italy and Spain have suffered a series of dry summers, limiting supply and sending global truffle prices on an upward curve. This year was the driest October for 60 years, inflating the price of some varieties by more than 100% compared to last season.

According to the long standing "Borsa Tartufo" - stock exchange of Italy truffle capital Acqualagna - the Summer Burgundy Truffle (Tuber Aestivum), a commercial variety historically abundant across much of Europe, has doubled in price from an all-seasonal 460 euros per kilo for the last two years, to a record high of 900 euros per kilogram this year. The famous white truffle (Tuber Magnatum), which grows wild in the Alba and Acqualagna areas of Italy, has suffered a 90% reduction in harvest this year, hiking prices up to a staggering 5,000 per kilo on the Borsa, a rise from highs of 3,600 and 3,800 euros per kilo wholesale in 2015 and 2016. The Black Winter Truffle (Tuber Melanosporum), another investment variety, has recently been valued at 1,850 euros per kilogram.

While the supply of truffles continues to fall - 95% of truffle production has been lost since 1903, largely as a result of changing agricultural and environmental conditions - demand for luxury foods has never been greater. The US truffle market alone grew from $4m to $30m between 2004 and 2015 and the 'new rich' from BRIC and MINT countries are following suit. The resulting rise in prices will mean a bright future for the best commercial truffle farmers, as the truffle becomes one of the most lucrative alternative investment options available.

There are already a number of commercial truffle farms across Europe making the most of rising prices. These include French Truffle Tree, based in Charente, France; The English Truffle Company in Dorset; Black Truffle Investments in Ireland and Truffle Farms Europe, based in the Occitanie region of southern France.

Martin Waddell, founder of Truffle Farms Europe (TFE), is cultivating 26,500 young oak trees in the vast propagation nursery at the Institute Research and Technologia for Agronomia near Barcelona. 20,000 new trees have also been ordered, making this one of the largest truffle production farms in Europe. Sales closed in September on a share of the first 5,000 five year old trees which were released for private investors. The company plans to harvest and sell the truffle crops to global wholesale markets on behalf of their clients.

Investors can buy a share of the next batch of trees being released and can acquire from 25 trees up to 500, which costs from £10,226 to £124,947. In return they receive the price equivalent of 80% of the truffle crop during the life of the 15-year lease period and 50% of the tree sale price. The investment opportunity comes with automatic HMRC approved tax-free benefits. TFE grows the expensive black Perigord truffle (Tuber Melanosporum) and forecasts average annual returns on a wholesale return price of 500 euros, of between 18% and 24% over the 15-year period. With the help of world renowned truffle expert Dr Marcos Morcillo, Mr Waddell has been perfecting the science of truffle production for over ten years and says his investors will soon reap the rewards.

Mr Waddell said: "When I moved to France in 2007, it was clear to me that the investment world has long been blighted by investor management greed and doomed to the boom/bust cycle that persists. As the devastation of 2008 hit home, I just felt there had to be a better, more patient way to build for the future, a way that would be ethical, ecological and sustainable. Truffle farming is one way to achieve that. The impact of two decades of dry summers on truffle productivity and prices, combined with the developing science, opened the door to an exciting, ethical investment opportunity that ticks all the boxes. I am fortunate to have clients that have believed in what we offer and they are about to be rewarded for their foresight."

Stephane Schuster, one of TFE's investors said: "I wanted to get a better return than the bank or the stock market and the idea of putting my money into something that gives a good return but also has some ethical benefits, really appealed. I work as an engineer in the oil industry, so I wanted to find something where I could give back and the ethical side of truffle production really appealed to me. And to be able to take the children truffle hunting on holiday is a great bonus!"

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. U.S. economy, inflation and alternative investments to dominate 2018 markets, says family office Wilmington Trust[more]

    Komfie Manalo, Opalesque Asia: The emergence of a late-cycle economy in the U.S., the mystery of inflation and growth from a domestic and global perspective, and the potential for alternative investments to prosper against a backdrop of rich valuations, low yields, and higher volatility are the t

  2. Performance - Some hedge funds deliver double-digit gains for 2017, Brevan Howard's hedge fund suffers biggest annual loss in 2017, Crispin Odey's flagship hedge fund plummeted about 20% in 2017, Profits fall 90% at ex-Morgan Stanley banker's hedge fund, Fannie-Freddie overhaul might mint hedge fund riches, losses[more]

    Some hedge funds deliver double-digit gains for 2017 From Reuters/ A handful of hedge funds ended 2017 with double digit returns, their investors said, at a time the $3 trillion industry took in fresh money and posted its best returns in years, industry data show. Act

  3. Investing - Hedge funds start 2018 with record $19 billion bet on the euro, Hedge fund Kora Management invests in Satin Creditcare[more]

    Hedge funds start 2018 with record $19 billion bet on the euro From Hedge funds have kicked off 2018 with their biggest bet ever on the euro rising, a clear vote of confidence in the single currency but, with positioning so stretched, one which could backfire in the near ter

  4. News Briefs - Mobius to retire from Franklin Templeton, Authorities decrypt smart phone of Princeton grad charged with killing Manhattan hedge fund dad, Investigators seize (more) antiques from hedge-fund billionaire Michael Steinhardt's collection[more]

    Mobius to retire from Franklin Templeton Emerging markets pioneer Mark Mobius will be stepping down as executive chairman of the Templeton Emerging Markets Group (TEMG) and formally retire from Franklin Templeton on 31 January. He will also be relinquishing his post as portfolio manager

  5. Comment - Seeding arrangements: Structure, approach, and the current market[more]

    From international law firm K&L Gates: Private fund growth has exploded over the last several years. While some areas are hotter than others, overall the industry has seen substantial growth. Existing managers have been able to launch larger funds and new managers have been able to successfully ente