Savills has been instructed to sell close to 1 million acres of land in Argentina. Situated in the San Juan province in the north west of Argentina, Estancia Punta del Agua totals approximately 989,000 acres in a single location to the north west of San Juan city.
The land is being marketed through Savills and joint agents Gateway to South America based in Buenos Aires, on behalf of a multi-national family who have owned the land since the 1980’s and now wish to concentrate on other projects.
Ken Jones, head of international farmland for Savills says “This is probably the largest ring fenced freehold block of land to be offered for sale in the open market ever. Given the current interest in farmland from international investors, we expect the Estancia to appeal to a number of potential purchasers. With soil reports showing vast areas of silt soils, and the potential of tapping into one of the largest aquifers in Argentina, the Estancia needs an investor who understands agriculture and has the capital to invest after the purchase in a scheme of works to bring the land into line with 21st century farming techniques. We feel, once implemented, not only will the owner have one of the largest farms in the world, but also will have added value far beyond the cost of the scheme.”
Joint agent Geoffrey McRae of Gateway to South America adds; “The Estancia was a productive farming estate until the 1950’s when lack of infrastructure meant that the province of San Juan became less competitive in comparison to the more strategically located provinces like Mendoza and La Pampa. In recent years, a strategic alliance between the countries of Chile, Argentina, Uruguay and Brazil has meant significant investment in, amongst others, a road network connecting major ports on the Atlantic and Pacific oceans. Part of this network of road runs the full width of the Estancia meaning produce can be transported from the land with ease. Investment in the 132kv grid network means that the Estancia will also benefit from a modern, reliable electricity supply.”
The Estancia totals approximately 989,000 acres and is available as a whole by Private Treaty.
Source: http://www.landgazette.co.uk/index.php/rural-agency-/935-largest-block
DGC Asset Management Limited provide Investors with the opportunity to engage in strategic mid term and long term asset-backed investments within the Agricultural, Timber and Renewable Energy sectors.
Showing posts with label agricultural investment. Show all posts
Showing posts with label agricultural investment. Show all posts
Friday, 17 June 2011
Chinese agro firm make $1.5b agriculture investment in Argentina
Beidahuang Group, a company based in Northeast China's Heilongjiang province, expressed its intention to invest in an agricultural cooperation project with Argentina’s Rio Negro Province, ce.cn reported Monday, quoting media reports in Argentina.
The Chinese company will invest $1.5 billion over 20 years to grow farm produce, including soybeans and corn, and export those crops back to China. The project will use advanced irrigation facilities to develop 300,000 hectares of arable lands for agriculture use, and construct supporting power generators and port expansions.
This project, expected to start this year, will be the first investment in Argentina’s agriculture by Chinese companies, according to the media.
The Chinese company will invest $1.5 billion over 20 years to grow farm produce, including soybeans and corn, and export those crops back to China. The project will use advanced irrigation facilities to develop 300,000 hectares of arable lands for agriculture use, and construct supporting power generators and port expansions.
This project, expected to start this year, will be the first investment in Argentina’s agriculture by Chinese companies, according to the media.
Sarkozy Demands Regulation of Global Agricultural Futures Markets
Agricultural futures markets need global regulation because price swings are damaging producers and consumers, French President Nicolas Sarkozy said, a week before G-20 ministers meet to discuss global food supply.
France, which heads the Group of 20 nations this year, will propose a market-information system similar to what already exists in oil, Sarkozy told a conference of farm groups in Paris today. The G-20 members account for 70 percent of agricultural land and 80 percent of world food trade, he said. Their farm ministers meet in Paris on June 22.
Global food prices monitored by the United Nations rose to a record in February and the World Bank estimates the increase contributed to 44 million people falling into poverty in the past year. Rising costs are stoking inflation worldwide, spurring central banks from China to the euro region to increase interest rates, potentially curbing economic expansion.
“We have to regulate the financial futures markets for agricultural commodities,” Sarkozy told the conference. “If we wait, we’ll do nothing. And we can’t permit ourselves the luxury of not doing anything.”
The Standard & Poor’s Agriculture Index of eight raw materials rose 60 percent in the past 12 months, led by corn, cotton, wheat and coffee. The compares with a 32 percent advance in the S&P GSCI index of 24 commodities and a 15 percent gain in the MSCI All-Country World Index of equities.
‘Volatility Insupportable’
“This price volatility has become insupportable,” Sarkozy told representatives from about 120 farm groups at today’s meeting. “Name me one other profession where every year, one can lose more than 30 percent of their revenue.”
The last time food prices surged, from 2007 to 2009, more than 60 food riots occurred worldwide, according to the U.S. State Department. Corn gained 75 percent in the past 12 months, wheat 54 percent and rice 28 percent.
“Price volatility is also insupportable for consumers,” the French president said. “The food crisis of 2007-08, the cause of food riots, is the dramatic illustration of the consequences of the fluctuations.”
Farming needs more investment, particularly in research, and global governance is needed because “the world agricultural markets are the least transparent of all,” the president said. Growth in farm output slowed to less than 1.5 percent a year from 3 percent between 1960 and 1990, he said.
Global Population
The world population is forecast to climb to 9.2 billion in 2050 from an estimated 6.9 billion in 2010, requiring a 70 percent jump in agricultural production, according to the Rome- based Food and Agriculture Organization.
“Agronomy has to again become the driving force to ensure the necessary growth of world food production,” Sarkozy said. “Obviously, public aid isn’t sufficient. We have to encourage private investment in agriculture.”
The so-called Green Revolution that started in the 1950s and spread in the 1960s introduced more productive wheat, corn and rice varieties. That raised cereal yields and food production, saving an estimated 1 billion people from famine and jump-starting Asian economies, according to the FAO.
“We want to launch a new system of market information for agriculture, as it was done about 10 years ago for oil,” Sarkozy said. “This new system should allow us to increase international cooperation on the subject of food security.”
‘Damaging Decisions’
The FAO could host the database and there needs to be an international forum to discuss responses to crises, which “will help avoid unilateral and damaging decisions,” Sarkozy said.
Russia, once the world’s second-biggest wheat exporter, banned grain exports last year after its worst drought in a half century and Ukraine imposed quotas on overseas sales.
Financial regulation to improve the working of the futures markets must be extended to agricultural commodities, according to the president.
“What we have done for the oil futures markets, is there one reason, one argument, to refuse to do it for the agricultural commodity futures markets?” Sarkozy asked at the conference.
In Chicago, trading volumes are equal to 46 times annual U.S. wheat production and 24 times the country’s corn harvest, according to the French president.
“And people tell me there is no speculation,” Sarkozy said. “On the commodity markets in Chicago, 85 percent of buy positions are held by purely financial players, whose business has no link with the traded goods.”
“Our world has lost the notion of value, the notion of reality,” Sarkozy said. “This sort of capitalism has nothing to do with our values. The capitalism we want is a capitalism of production, not a purely financial capitalism.”
Source: http://www.bloomberg.com/news/2011-06-16/agriculture-markets-require-global-governance-and-regulation-sarkozy-says.html
France, which heads the Group of 20 nations this year, will propose a market-information system similar to what already exists in oil, Sarkozy told a conference of farm groups in Paris today. The G-20 members account for 70 percent of agricultural land and 80 percent of world food trade, he said. Their farm ministers meet in Paris on June 22.
Global food prices monitored by the United Nations rose to a record in February and the World Bank estimates the increase contributed to 44 million people falling into poverty in the past year. Rising costs are stoking inflation worldwide, spurring central banks from China to the euro region to increase interest rates, potentially curbing economic expansion.
“We have to regulate the financial futures markets for agricultural commodities,” Sarkozy told the conference. “If we wait, we’ll do nothing. And we can’t permit ourselves the luxury of not doing anything.”
The Standard & Poor’s Agriculture Index of eight raw materials rose 60 percent in the past 12 months, led by corn, cotton, wheat and coffee. The compares with a 32 percent advance in the S&P GSCI index of 24 commodities and a 15 percent gain in the MSCI All-Country World Index of equities.
‘Volatility Insupportable’
“This price volatility has become insupportable,” Sarkozy told representatives from about 120 farm groups at today’s meeting. “Name me one other profession where every year, one can lose more than 30 percent of their revenue.”
The last time food prices surged, from 2007 to 2009, more than 60 food riots occurred worldwide, according to the U.S. State Department. Corn gained 75 percent in the past 12 months, wheat 54 percent and rice 28 percent.
“Price volatility is also insupportable for consumers,” the French president said. “The food crisis of 2007-08, the cause of food riots, is the dramatic illustration of the consequences of the fluctuations.”
Farming needs more investment, particularly in research, and global governance is needed because “the world agricultural markets are the least transparent of all,” the president said. Growth in farm output slowed to less than 1.5 percent a year from 3 percent between 1960 and 1990, he said.
Global Population
The world population is forecast to climb to 9.2 billion in 2050 from an estimated 6.9 billion in 2010, requiring a 70 percent jump in agricultural production, according to the Rome- based Food and Agriculture Organization.
“Agronomy has to again become the driving force to ensure the necessary growth of world food production,” Sarkozy said. “Obviously, public aid isn’t sufficient. We have to encourage private investment in agriculture.”
The so-called Green Revolution that started in the 1950s and spread in the 1960s introduced more productive wheat, corn and rice varieties. That raised cereal yields and food production, saving an estimated 1 billion people from famine and jump-starting Asian economies, according to the FAO.
“We want to launch a new system of market information for agriculture, as it was done about 10 years ago for oil,” Sarkozy said. “This new system should allow us to increase international cooperation on the subject of food security.”
‘Damaging Decisions’
The FAO could host the database and there needs to be an international forum to discuss responses to crises, which “will help avoid unilateral and damaging decisions,” Sarkozy said.
Russia, once the world’s second-biggest wheat exporter, banned grain exports last year after its worst drought in a half century and Ukraine imposed quotas on overseas sales.
Financial regulation to improve the working of the futures markets must be extended to agricultural commodities, according to the president.
“What we have done for the oil futures markets, is there one reason, one argument, to refuse to do it for the agricultural commodity futures markets?” Sarkozy asked at the conference.
In Chicago, trading volumes are equal to 46 times annual U.S. wheat production and 24 times the country’s corn harvest, according to the French president.
“And people tell me there is no speculation,” Sarkozy said. “On the commodity markets in Chicago, 85 percent of buy positions are held by purely financial players, whose business has no link with the traded goods.”
“Our world has lost the notion of value, the notion of reality,” Sarkozy said. “This sort of capitalism has nothing to do with our values. The capitalism we want is a capitalism of production, not a purely financial capitalism.”
Source: http://www.bloomberg.com/news/2011-06-16/agriculture-markets-require-global-governance-and-regulation-sarkozy-says.html
Tony Elumelu Foundation (TEF) to Make $500m Agriculture Investment
The agricultural sector in Nigeria will soon experience a revolution as the Tony Elumelu Foundation (TEF) is set to pump in $500 million to boost activities in the sector.
To this end, the Foundation has entered into partnership with some state governments for the allocation of lands to commence large scale agricultural activities in the country.
Mr. Tony Elumelu, Founder of TEF who disclosed this to journalist in Lagos stated that the world is potentially facing a food security crisis meanwhile Nigeria has land that can feed the continent of Africa as well provide employment to a significant percentage of the teeming unemployed people.
In his words, “The world is facing a potentially food security crisis and I said to my friends and associates ‘team up with me lets create an agricultural revolution. I am not just telling you to come and invest; I am also ready to co-invest with you. Team up with me lets see how we can do this’ and they are responding to it.”
Elumelu stated that the Foundation has appointed a consultant and spoken to six state governments who have promised to give 50 acres of land each, adding “And our consultants are working with the various state ministries to see how we can make it happen.
The Central Bank of Nigeria (CBN) Governor and I spoke, we have a master plan for agriculture revolution in Nigeria so we are trying to see what we want to do, so that together it’s a win-win for agriculture and the country.
Elumelu also stated that he has foreign associates who have indicated interest that they will like to invest in Nigerian agricultural sector, as such the Foundation has been talking to them, telling them that Nigeria has a lot of valuable land, water, the right climate etc and they should come and invest in Nigeria, stating “Our land is huge, come so that we can collectively deal with the issue of food security and also engage our people.”
On what the government should do to make the country an attractive destination for investment, Elumelu stated that the government needs to turn the environment around, stating that it is possible and achievable to do so. “We have to consider all the factors that can make us an attractive destination for investors who have capital to invest; for tourists who wants to visit the country, as well as for workers who want to work and grow a career.
My hope is that in the next four years, the new government would pay strong attention to the issue of competitiveness and ease of doing business so that Nigeria will become a good destination for investment,” he stated.
The TEF founder noted that the country needs to deal with all the factors that will make Nigeria a good destination for investors so that if foreigners have money and are looking for a place to invest, they should come to Nigeria. “Some factors should make a rational investor come to Nigeria.
For instance if you want to import goods into the country for your business, how many days will it take you to clear goods at the ports? Countries have moved to a level where they can clear goods within hours or days.
Can we achieve this in Nigeria? Lets say at the end of this year, we achieve a system whereby people can clear goods at the ports within one week, that will help the investment drive of the country. Similarly other infrastructure that will make us do well as a country, we need to build these things,” he noted.
Source: http://www.vanguardngr.com/2011/06/tef-to-invest-500m-into-agriculture/
To this end, the Foundation has entered into partnership with some state governments for the allocation of lands to commence large scale agricultural activities in the country.
Mr. Tony Elumelu, Founder of TEF who disclosed this to journalist in Lagos stated that the world is potentially facing a food security crisis meanwhile Nigeria has land that can feed the continent of Africa as well provide employment to a significant percentage of the teeming unemployed people.
In his words, “The world is facing a potentially food security crisis and I said to my friends and associates ‘team up with me lets create an agricultural revolution. I am not just telling you to come and invest; I am also ready to co-invest with you. Team up with me lets see how we can do this’ and they are responding to it.”
Elumelu stated that the Foundation has appointed a consultant and spoken to six state governments who have promised to give 50 acres of land each, adding “And our consultants are working with the various state ministries to see how we can make it happen.
The Central Bank of Nigeria (CBN) Governor and I spoke, we have a master plan for agriculture revolution in Nigeria so we are trying to see what we want to do, so that together it’s a win-win for agriculture and the country.
Elumelu also stated that he has foreign associates who have indicated interest that they will like to invest in Nigerian agricultural sector, as such the Foundation has been talking to them, telling them that Nigeria has a lot of valuable land, water, the right climate etc and they should come and invest in Nigeria, stating “Our land is huge, come so that we can collectively deal with the issue of food security and also engage our people.”
On what the government should do to make the country an attractive destination for investment, Elumelu stated that the government needs to turn the environment around, stating that it is possible and achievable to do so. “We have to consider all the factors that can make us an attractive destination for investors who have capital to invest; for tourists who wants to visit the country, as well as for workers who want to work and grow a career.
My hope is that in the next four years, the new government would pay strong attention to the issue of competitiveness and ease of doing business so that Nigeria will become a good destination for investment,” he stated.
The TEF founder noted that the country needs to deal with all the factors that will make Nigeria a good destination for investors so that if foreigners have money and are looking for a place to invest, they should come to Nigeria. “Some factors should make a rational investor come to Nigeria.
For instance if you want to import goods into the country for your business, how many days will it take you to clear goods at the ports? Countries have moved to a level where they can clear goods within hours or days.
Can we achieve this in Nigeria? Lets say at the end of this year, we achieve a system whereby people can clear goods at the ports within one week, that will help the investment drive of the country. Similarly other infrastructure that will make us do well as a country, we need to build these things,” he noted.
Source: http://www.vanguardngr.com/2011/06/tef-to-invest-500m-into-agriculture/
Thursday, 16 June 2011
Saudi to Double Wheat Stocks with Agriculture Investments
RIYADH: Saudi Arabia expects about two million tons of wheat imports this year unchanged from 2010, and aims to double its reserves to one year’s consumption by 2014, the Kingdom’s Minister of Agriculture said.
Saudi Arabia, which has emerged as a major buyer of wheat, wants to build up reserves of basic commodities such as wheat, rice, oils and sugar to protect itself against the impact of a spike in global food prices and to support its rapidly growing population.
The country began importing wheat in 2009 and is looking to rely entirely on wheat imports by 2016 as it seeks to save precious water.
“We set a policy that we should always have six months of supply in reserves at any moment. We decided this year to increase it to one year,” Fahd Balghunaim said.
The Kingdom currently has around 1.4 million tons of wheat reserves — the equivalent of six months — and will look to double that by 2014, Waleed El-Khereiji, Director General of the Grains Silos and Flour Mills Organization (GSFMO), later said.
The Kingdom is planning to phase out production of other water intensive crops including soya beans and animal fodder.
Saudi Arabia continues to invest in farmland abroad as part of its strategy to secure food supplies and is looking at Kazakhstan, Russia and Ukraine as “probable countries of investment” for growing, Balghunaim said.
Gulf states suffered when international food prices spiked to record levels in 2008, forcing up their import bills.
Last year Saudi Arabia set up a company with a capital of $800 million to invest in farmland abroad, focusing on wheat, rice, sugar and soybeans.
Saudi Industrial Development Fund is granting financing facilities to firms exploring agricultural investments abroad ranging from Indonesia to Ethiopia.
The Ministry of Agriculture acts as a “door opener” for private Saudi investors abroad, Balghunaim said.
Balghunaim said the kingdom, which already invests in Africa, would be interested in investing in south Sudan despite heightened tensions around the ill-defined north-south border.
South Sudan is due to become independent on July 9.
Companies such as Saudi-based National Agricultural Development Co (Nadec) and Abu Dhabi private firm Jenaan — have invested in farmland in northern Sudan.
“The intention is still there. For both north and south,” he said.
Source: http://arabnews.com/economy/article454885.ece
Saudi Arabia, which has emerged as a major buyer of wheat, wants to build up reserves of basic commodities such as wheat, rice, oils and sugar to protect itself against the impact of a spike in global food prices and to support its rapidly growing population.
The country began importing wheat in 2009 and is looking to rely entirely on wheat imports by 2016 as it seeks to save precious water.
“We set a policy that we should always have six months of supply in reserves at any moment. We decided this year to increase it to one year,” Fahd Balghunaim said.
The Kingdom currently has around 1.4 million tons of wheat reserves — the equivalent of six months — and will look to double that by 2014, Waleed El-Khereiji, Director General of the Grains Silos and Flour Mills Organization (GSFMO), later said.
The Kingdom is planning to phase out production of other water intensive crops including soya beans and animal fodder.
Saudi Arabia continues to invest in farmland abroad as part of its strategy to secure food supplies and is looking at Kazakhstan, Russia and Ukraine as “probable countries of investment” for growing, Balghunaim said.
Gulf states suffered when international food prices spiked to record levels in 2008, forcing up their import bills.
Last year Saudi Arabia set up a company with a capital of $800 million to invest in farmland abroad, focusing on wheat, rice, sugar and soybeans.
Saudi Industrial Development Fund is granting financing facilities to firms exploring agricultural investments abroad ranging from Indonesia to Ethiopia.
The Ministry of Agriculture acts as a “door opener” for private Saudi investors abroad, Balghunaim said.
Balghunaim said the kingdom, which already invests in Africa, would be interested in investing in south Sudan despite heightened tensions around the ill-defined north-south border.
South Sudan is due to become independent on July 9.
Companies such as Saudi-based National Agricultural Development Co (Nadec) and Abu Dhabi private firm Jenaan — have invested in farmland in northern Sudan.
“The intention is still there. For both north and south,” he said.
Source: http://arabnews.com/economy/article454885.ece
Thursday, 9 June 2011
Spotlight turned on agriculture investment boom
Protestors have been demonstrating in Geneva against the growth in investments in agriculture that they say endangers food security in many developing countries.
The second “jetfin AGRO” conference for investors with an eye on agriculture and water took place in the western Swiss city on Tuesday. Meanwhile, the global land-grab phenomenon continues to expand as states attempt to regulate the issue.
Activists from some 25 Swiss non-governmental organisations and unions demonstrated outside the conference at the five-star Kempinski Hotel in Geneva against investments in agriculture and water in developing nations, which they say threaten people’s right to food and water and encourage speculation.
“We have to react against this new phenomenon where pension funds are investing massively in funds promoted by this conference,” said Margot Brogniart, coordinator for the coalition of protestors.
The fact that this is the third such meeting in Geneva in the space of a year, with others planned next week and in September, points to the growing interest by investors and Geneva’s major role, says Ester Wolf, a development specialist with the Bread for all NGO.
“Geneva is becoming a hub for such investments,” she told swissinfo.ch.
“Bright light”
The jetfin AGRO meeting brought together investors, wealth managers and commodity specialists from around the world to discuss strategies for agriculture, described as “the bright light of today’s investment universe”.
Topics included building an agro-business equity portfolio, hedging contracts for agro-investments, agricultural commodities and specific investment destinations such as India, Latin America and the US, as well as strategies for investing in timber and water.
Shaken by two food-price spikes in four years, countries from the Middle East, China, South Korea and elsewhere, concerned about feeding their own people, continue to invest heavily in farmland in places like Africa.
The recent financial crisis has pushed a second wave of private investors to diversify into agriculture.
“It’s a fashionable topic right now,” said Geneva wealth manager Philippe Szokolóczy-Syllaba, founder of My Global Advisor, who was present at the conference.
But investments in agriculture or specific projects remain very complex, he explained, as there is a race to find good quality land that is not too expensive and large financial outlays are needed.
Banks and funds
In Switzerland a number of banks, investment funds and firms are busy in this field, and many others are thought to be active behind the scenes.
In 2009 Credit Suisse and UBS participated in a share issue for Golden Agri-Resources, the world's second-largest palm oil plantation company based in Indonesia.
Private banks Sarasin and Pictet propose agro-related investments, and investment funds have been created in Switzerland, such as GlobalAgriCap in Zurich, GAIA World Agri Fund in Geneva and Man Investments in Pfäffikon.
Myret Zaki, deputy editor of the Swiss financial magazine Bilan, who attended the conference, said there was currently a huge demand to diversify investment portfolios.
“The yield potential from agro investments is not enormous – maybe ten to 20 per cent – and they can be volatile,” she told swissinfo.ch. “But people know that in the long term they can only but appreciate.”
Institutional investors like pension funds have been “disorientated” by recent events and are very open to new types of investments, says Zaki.
“What was formerly seen as exotic is now the norm,” she noted.
Swiss firms
Certain Swiss-based firms are also publicly active in major agriculture projects, such as Glencore, the world’s biggest commodities trader, which is said to own almost 300,000 hectares of farm land around the world.
In 2008 the Geneva-based firm Addax Bioenergy launched a high-profile sugarcane ethanol project on 10,000 hectares of land leased in Sierra Leone. It hopes to create more than 2,000 jobs when the project is fully operational in 2013.
“We need to have a much better idea who the Swiss firms are that are investing in agriculture abroad,” said Maya Graf, a Green Party MP.
She recently filed a series of parliamentary questions on the land-grab phenomenon, including one about how to best ensure investments comply with human rights in the countries concerned.
“Switzerland is actively committed so that the renewed public and private interest for investments in agriculture lead to a win-win solution for all sides,” said Swiss foreign ministry spokeswoman Carole Wälti.
It has also been supporting efforts to improve global regulatory mechanisms governing investment in land and natural resources, such as the “Voluntary Guidelines on the Responsible Governance of Tenure of Land and Other Natural Resources”.
Experts hope the text will be adopted during the next Committee on World Food Security in October 2011.
Source: http://www.swissinfo.ch/eng/politics/Spotlight_turned_on_agro_investment_boom_.html?cid=30421416
The second “jetfin AGRO” conference for investors with an eye on agriculture and water took place in the western Swiss city on Tuesday. Meanwhile, the global land-grab phenomenon continues to expand as states attempt to regulate the issue.
Activists from some 25 Swiss non-governmental organisations and unions demonstrated outside the conference at the five-star Kempinski Hotel in Geneva against investments in agriculture and water in developing nations, which they say threaten people’s right to food and water and encourage speculation.
“We have to react against this new phenomenon where pension funds are investing massively in funds promoted by this conference,” said Margot Brogniart, coordinator for the coalition of protestors.
The fact that this is the third such meeting in Geneva in the space of a year, with others planned next week and in September, points to the growing interest by investors and Geneva’s major role, says Ester Wolf, a development specialist with the Bread for all NGO.
“Geneva is becoming a hub for such investments,” she told swissinfo.ch.
“Bright light”
The jetfin AGRO meeting brought together investors, wealth managers and commodity specialists from around the world to discuss strategies for agriculture, described as “the bright light of today’s investment universe”.
Topics included building an agro-business equity portfolio, hedging contracts for agro-investments, agricultural commodities and specific investment destinations such as India, Latin America and the US, as well as strategies for investing in timber and water.
Shaken by two food-price spikes in four years, countries from the Middle East, China, South Korea and elsewhere, concerned about feeding their own people, continue to invest heavily in farmland in places like Africa.
The recent financial crisis has pushed a second wave of private investors to diversify into agriculture.
“It’s a fashionable topic right now,” said Geneva wealth manager Philippe Szokolóczy-Syllaba, founder of My Global Advisor, who was present at the conference.
But investments in agriculture or specific projects remain very complex, he explained, as there is a race to find good quality land that is not too expensive and large financial outlays are needed.
Banks and funds
In Switzerland a number of banks, investment funds and firms are busy in this field, and many others are thought to be active behind the scenes.
In 2009 Credit Suisse and UBS participated in a share issue for Golden Agri-Resources, the world's second-largest palm oil plantation company based in Indonesia.
Private banks Sarasin and Pictet propose agro-related investments, and investment funds have been created in Switzerland, such as GlobalAgriCap in Zurich, GAIA World Agri Fund in Geneva and Man Investments in Pfäffikon.
Myret Zaki, deputy editor of the Swiss financial magazine Bilan, who attended the conference, said there was currently a huge demand to diversify investment portfolios.
“The yield potential from agro investments is not enormous – maybe ten to 20 per cent – and they can be volatile,” she told swissinfo.ch. “But people know that in the long term they can only but appreciate.”
Institutional investors like pension funds have been “disorientated” by recent events and are very open to new types of investments, says Zaki.
“What was formerly seen as exotic is now the norm,” she noted.
Swiss firms
Certain Swiss-based firms are also publicly active in major agriculture projects, such as Glencore, the world’s biggest commodities trader, which is said to own almost 300,000 hectares of farm land around the world.
In 2008 the Geneva-based firm Addax Bioenergy launched a high-profile sugarcane ethanol project on 10,000 hectares of land leased in Sierra Leone. It hopes to create more than 2,000 jobs when the project is fully operational in 2013.
“We need to have a much better idea who the Swiss firms are that are investing in agriculture abroad,” said Maya Graf, a Green Party MP.
She recently filed a series of parliamentary questions on the land-grab phenomenon, including one about how to best ensure investments comply with human rights in the countries concerned.
“Switzerland is actively committed so that the renewed public and private interest for investments in agriculture lead to a win-win solution for all sides,” said Swiss foreign ministry spokeswoman Carole Wälti.
It has also been supporting efforts to improve global regulatory mechanisms governing investment in land and natural resources, such as the “Voluntary Guidelines on the Responsible Governance of Tenure of Land and Other Natural Resources”.
Experts hope the text will be adopted during the next Committee on World Food Security in October 2011.
Source: http://www.swissinfo.ch/eng/politics/Spotlight_turned_on_agro_investment_boom_.html?cid=30421416
Farm ministers to rein in commodity speculation
Plans to limit speculation in commodity markets could be approved by 20 of the world's leading agriculture ministers later this month.
French minister Bruno le Maire will lead his counterparts from G20 member countries on 23 June in seeking measures to reduce price volatility and improve food security.
Agricultural markets needed investment, transparency and international co-ordination, not speculation, said Mr le Maire at the International Grains Council's conference this week.
"We need investors not speculators - we do not need people who come and make excessive profits in a few days in agricultural markets," said Mr le Maire, commenting that in Chicago, more than 80% of positions were held by purely financial players who had no link with production agriculture.
"We don't want to control prices. What we want to fight is not higher prices but excessive volatility." Strategic emergency food reserves would also be part of the plan.
Addressing the challenges of world food security and price volatility, this year's French presidency of the G20 has developed a five-point action plan for agricultural markets (see panel).
However, grain traders at the conference were generally opposed to limits on speculation. "The best markets are unregulated and allowed to perform in a free manner," said Frontier's trading director Jon Duffy.
"Speculation will never make a market, the fundamentals will always make a market.
"The markets are where they are today because of pure supply and demand," he told Farmers Weekly.
"Speculation may make it get there quicker but I would be fairly wary of anything that's going to limit the free market; I don't believe it's good news for anybody. Controlling speculation won't alter food security."
Moves to limit speculation were roundly rejected by other speakers at the International Grains Council conference.
"The greatest risk for trade from government is not that they will do too little but that they will do too much," said US Wheat Associates president Alan Tracy.
"The markets are not perfect but at the end of the day signals given out by the market are better than those given out by governments," said Rod Gravelet-Blondin, senior general manager of commodity derivatives at the Johannesburg Stock Exchange.
In a similar bid to that of the G20, an EU review of financial regulation is also considering market intervention by limiting the size of positions which can be taken on commodity futures markets.
Source: http://www.fwi.co.uk/Articles/2011/06/09/127236/Farm-ministers-to-rein-in-commodity-speculation.htm
French minister Bruno le Maire will lead his counterparts from G20 member countries on 23 June in seeking measures to reduce price volatility and improve food security.
Agricultural markets needed investment, transparency and international co-ordination, not speculation, said Mr le Maire at the International Grains Council's conference this week.
"We need investors not speculators - we do not need people who come and make excessive profits in a few days in agricultural markets," said Mr le Maire, commenting that in Chicago, more than 80% of positions were held by purely financial players who had no link with production agriculture.
"We don't want to control prices. What we want to fight is not higher prices but excessive volatility." Strategic emergency food reserves would also be part of the plan.
Addressing the challenges of world food security and price volatility, this year's French presidency of the G20 has developed a five-point action plan for agricultural markets (see panel).
However, grain traders at the conference were generally opposed to limits on speculation. "The best markets are unregulated and allowed to perform in a free manner," said Frontier's trading director Jon Duffy.
"Speculation will never make a market, the fundamentals will always make a market.
"The markets are where they are today because of pure supply and demand," he told Farmers Weekly.
"Speculation may make it get there quicker but I would be fairly wary of anything that's going to limit the free market; I don't believe it's good news for anybody. Controlling speculation won't alter food security."
Moves to limit speculation were roundly rejected by other speakers at the International Grains Council conference.
"The greatest risk for trade from government is not that they will do too little but that they will do too much," said US Wheat Associates president Alan Tracy.
"The markets are not perfect but at the end of the day signals given out by the market are better than those given out by governments," said Rod Gravelet-Blondin, senior general manager of commodity derivatives at the Johannesburg Stock Exchange.
In a similar bid to that of the G20, an EU review of financial regulation is also considering market intervention by limiting the size of positions which can be taken on commodity futures markets.
Source: http://www.fwi.co.uk/Articles/2011/06/09/127236/Farm-ministers-to-rein-in-commodity-speculation.htm
Wednesday, 8 June 2011
OECD’s Gurria Says Food Production Needs ‘Big’ Investment Boost
OECD Secretary General Jose Angel Gurria said boosting food stockpiles in emerging and developing nations will require increased government and private spending.
“Most of the potential to increase production is outside the OECD countries,” Gurria, head of the Paris-based Organization for Economic Cooperation and Development, said today at a conference in Montreal. “That is where there is land available and where the gap between the current and the potential yields is enormous. But a big increase in investment is needed there.”
The cost of food is projected to remain elevated into 2012. Global wheat production will lag behind demand, helping to keep food prices high and volatile at least through next year, the United Nations Food and Agriculture Organization said today on its website.
Gurria offered two possible solutions to prevent future surges in food costs. “Governments could roll back the measures which mandate and subsidize biofuel consumption and production, which have created conflicts between fuel and food,” he said. “Governments could also refrain from beggar-thy-neighbor policies such as import and export restrictions.”
Prices for staple foods including corn will more than double in two decades unless action is taken, Oxfam International said last week. World grain stocks will fall for a second year by the end of June 2012, the International Grains Council said May 26.
The increase in food prices is “not exclusively an agricultural issue,” Gurria said. “Macroeconomic factors, energy policy, the financial and economic crises, the weather, they have all contributed.”
When asked at a news conference today if the U.S. Federal Reserve’s $600 billion Treasury-purchase program, scheduled to expire at the end of the month, contributed to the recent rise in commodity prices, Gurria said, “Frankly, I don’t see a very direct link.”
The OECD, comprised mostly of developed nations in Europe and North America, has 34 member states.
Source: http://www.bloomberg.com/news/2011-06-07/oecd-s-gurria-says-food-production-needs-big-investment-boost.html
“Most of the potential to increase production is outside the OECD countries,” Gurria, head of the Paris-based Organization for Economic Cooperation and Development, said today at a conference in Montreal. “That is where there is land available and where the gap between the current and the potential yields is enormous. But a big increase in investment is needed there.”
The cost of food is projected to remain elevated into 2012. Global wheat production will lag behind demand, helping to keep food prices high and volatile at least through next year, the United Nations Food and Agriculture Organization said today on its website.
Gurria offered two possible solutions to prevent future surges in food costs. “Governments could roll back the measures which mandate and subsidize biofuel consumption and production, which have created conflicts between fuel and food,” he said. “Governments could also refrain from beggar-thy-neighbor policies such as import and export restrictions.”
Prices for staple foods including corn will more than double in two decades unless action is taken, Oxfam International said last week. World grain stocks will fall for a second year by the end of June 2012, the International Grains Council said May 26.
The increase in food prices is “not exclusively an agricultural issue,” Gurria said. “Macroeconomic factors, energy policy, the financial and economic crises, the weather, they have all contributed.”
When asked at a news conference today if the U.S. Federal Reserve’s $600 billion Treasury-purchase program, scheduled to expire at the end of the month, contributed to the recent rise in commodity prices, Gurria said, “Frankly, I don’t see a very direct link.”
The OECD, comprised mostly of developed nations in Europe and North America, has 34 member states.
Source: http://www.bloomberg.com/news/2011-06-07/oecd-s-gurria-says-food-production-needs-big-investment-boost.html
Thursday, 2 June 2011
Agricultural investment - Gaining exposure to flying food prices
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Exchange-traded funds (ETFs) commodity markets experienced a sharp pull-back during the early part of May, in what was the most feverish bout of profit-taking for well over a year. Although the direction of silver and oil prices hogged the headlines, there was also evidence of a sell-off in agricultural investment vehicles when markets became convinced that prices for a range of staples had topped during March.
The scramble to gain exposure to agricultural markets prior to March can be gauged by inflows into US agricultural ETFs, which reached $984m (£600m) during February - a fivefold increase over the last months of 2010.
Now, with Northern Europe experiencing its worst drought conditions since 1976, the CRB Grains & Oilseed index is again challenging its March highs, and is only 9 per cent down on the index high of 2008. Although Russian produce has re-entered global grains markets, much will depend on US summer yields, and the extent to which China's predicted shortfall swallows up surplus production.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: investorschronicle.co.uk
Exchange-traded funds (ETFs) commodity markets experienced a sharp pull-back during the early part of May, in what was the most feverish bout of profit-taking for well over a year. Although the direction of silver and oil prices hogged the headlines, there was also evidence of a sell-off in agricultural investment vehicles when markets became convinced that prices for a range of staples had topped during March.
The scramble to gain exposure to agricultural markets prior to March can be gauged by inflows into US agricultural ETFs, which reached $984m (£600m) during February - a fivefold increase over the last months of 2010.
Now, with Northern Europe experiencing its worst drought conditions since 1976, the CRB Grains & Oilseed index is again challenging its March highs, and is only 9 per cent down on the index high of 2008. Although Russian produce has re-entered global grains markets, much will depend on US summer yields, and the extent to which China's predicted shortfall swallows up surplus production.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: investorschronicle.co.uk
Farmland Investment - London Investor Snaps up Australian Farmland
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A NEWLY-diversified agricultural force is taking shape in eastern Australia following the latest round of property acquisitions by London-based investor, MH Premium Farms (MHPF).
Funded by the family pension fund of expatriate Australian, Michael Hintze, MHPF is the investment vehicle now driving one of Australia’s fastest-growing farm portfolios.
Since making its debut in 2007, MHPF has amassed 11 properties in NSW and two in north Queensland, all managed by Growth Farms Australia.
Until now the portfolio has been heavily weighted towards southern NSW mixed farming – wool, prime lambs, cattle and winter cropping – but the latest purchases widen MHPF’s scope.
The group has just confirmed its purchase of three farming properties in the Walgett district (where it already owns “Marshmead”) and two cane farms in North Queensland.
At Walgett, contracts have been exchanged for the purchases of “Mourabie”, “West Mourabie” and “Bynia”, a combined area of 7981 hectares including 1880ha developed for cotton irrigation.
The sale was negotiated by Moree Real Estate, which advertised the properties for sale in conjunction with Kelly’s Property Sales of Walgett earlier this year by expressions of interest.
Situated 50 kilometres west of Walgett, fronting the Barwon River, the properties have in total 4875ha of established cultivation and will provide geographic and enterprise diversity.
Included in the sale package, thought to be worth between $11 million and $13m excluding crop, are 4781 megalitres of water entitlements, 17,000ML of off-river storage and extensive infrastructure.
Also this week, MHPF confirmed the purchase – through Ferry Property at Townsville – of two cane farms in the Burdekin region of north Queensland.
The two farms, near Ayr, have a combined production capability of 40,000 tonnes of cane off 315ha, and were bought walk-in, walk-out (including crop) for a reported $6.8 million.
The latest purchases bring the total holdings of the group to more than 45,500ha, worth nearly $120m (including water), and covering all mainstream agricultural enterprises.
Further acquisitions are in the pipeline and expected to be unveiled as the year progresses.
Mr Hintze is the founder and senior investment officer of CQS Management, a London-based hedge fund with assets of $US10.5 billion.
His Australian holding company has three local directors who oversee the acquisitions and operational aspects of the investment, and a team of legal and financial advisers.
The group’s recent growth has been driven by the directors’ view that rural land in Australia just now represents good value, in light of the strong global demand for “soft commodities”.
They believe land has the potential to increase sharply in value in the next few years, yielding attractive returns on the investments now being made.
A key strategy of the group has been to aggregate parcels of land where possible to achieve efficiencies of scale and cross-property synergies.
All proposed acquisitions are first inspected and assessed by Growth Farms Australia, which draws up a comprehensive farm plan for each new purchase, identifying capital spending needs and – for grazing farms – suggested stocking strategies.
Richard Taylor, a director of Growth Farms Australia, said while efficiencies of scale, synergies and diversity were all desirable objectives, they were not the core criteria.
“Having highly-productive and well-managed farms is even more important, and this is the focus for ongoing management of the portfolio,” he said.
Prior to the latest purchases, MHPF’s most recent shopping spree saw it pick up the 1733ha “Rippling Waters” grazing property, near Tumbarumba, late last year from the failed Willmott Forests timber investment group.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: theland.com.au
A NEWLY-diversified agricultural force is taking shape in eastern Australia following the latest round of property acquisitions by London-based investor, MH Premium Farms (MHPF).
Funded by the family pension fund of expatriate Australian, Michael Hintze, MHPF is the investment vehicle now driving one of Australia’s fastest-growing farm portfolios.
Since making its debut in 2007, MHPF has amassed 11 properties in NSW and two in north Queensland, all managed by Growth Farms Australia.
Until now the portfolio has been heavily weighted towards southern NSW mixed farming – wool, prime lambs, cattle and winter cropping – but the latest purchases widen MHPF’s scope.
The group has just confirmed its purchase of three farming properties in the Walgett district (where it already owns “Marshmead”) and two cane farms in North Queensland.
At Walgett, contracts have been exchanged for the purchases of “Mourabie”, “West Mourabie” and “Bynia”, a combined area of 7981 hectares including 1880ha developed for cotton irrigation.
The sale was negotiated by Moree Real Estate, which advertised the properties for sale in conjunction with Kelly’s Property Sales of Walgett earlier this year by expressions of interest.
Situated 50 kilometres west of Walgett, fronting the Barwon River, the properties have in total 4875ha of established cultivation and will provide geographic and enterprise diversity.
Included in the sale package, thought to be worth between $11 million and $13m excluding crop, are 4781 megalitres of water entitlements, 17,000ML of off-river storage and extensive infrastructure.
Also this week, MHPF confirmed the purchase – through Ferry Property at Townsville – of two cane farms in the Burdekin region of north Queensland.
The two farms, near Ayr, have a combined production capability of 40,000 tonnes of cane off 315ha, and were bought walk-in, walk-out (including crop) for a reported $6.8 million.
The latest purchases bring the total holdings of the group to more than 45,500ha, worth nearly $120m (including water), and covering all mainstream agricultural enterprises.
Further acquisitions are in the pipeline and expected to be unveiled as the year progresses.
Mr Hintze is the founder and senior investment officer of CQS Management, a London-based hedge fund with assets of $US10.5 billion.
His Australian holding company has three local directors who oversee the acquisitions and operational aspects of the investment, and a team of legal and financial advisers.
The group’s recent growth has been driven by the directors’ view that rural land in Australia just now represents good value, in light of the strong global demand for “soft commodities”.
They believe land has the potential to increase sharply in value in the next few years, yielding attractive returns on the investments now being made.
A key strategy of the group has been to aggregate parcels of land where possible to achieve efficiencies of scale and cross-property synergies.
All proposed acquisitions are first inspected and assessed by Growth Farms Australia, which draws up a comprehensive farm plan for each new purchase, identifying capital spending needs and – for grazing farms – suggested stocking strategies.
Richard Taylor, a director of Growth Farms Australia, said while efficiencies of scale, synergies and diversity were all desirable objectives, they were not the core criteria.
“Having highly-productive and well-managed farms is even more important, and this is the focus for ongoing management of the portfolio,” he said.
Prior to the latest purchases, MHPF’s most recent shopping spree saw it pick up the 1733ha “Rippling Waters” grazing property, near Tumbarumba, late last year from the failed Willmott Forests timber investment group.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: theland.com.au
Agricultural Investment - China Struggles to Cultivate Enough Soy
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China's soybean harvest will decline twice as far has had been thought this year thanks to the better returns to be had from other crops, which will cut area devoted to the oilseed to the lowest of the century.
China's soybean harvest will decline twice as far has had been thought this year thanks to the better returns to be had from other crops, which will cut area devoted to the oilseed to the lowest of the century.
China's soybean harvest will fall by roughly 800,000 tonnes to 14.4m tonnes, US Department of Agriculture attaches in Beijing said.
The deeper cut than acknowledged in an official USDA estimate of a 14.8m-tonne harvest reflects the greater profits achieved in corn in 2010-11, at an average of $700 per hectare, than from soybeans, which earned farmers $500 a hectare.
"The difference has negative impacted some soybean planting decisions for 2011-12," the attaches said in a report.
In the important producing province of Heilongjiang sowings are expected to tumble by 10-20%, particularly in central areas "where weather and growing conditions provide farmers more choices for grain crops", the briefing said, quoting information from "industry sources".
In other provinces, soybeans are expected to lose out to cotton, for which national sowings are expected to increase by 6.6% to 5.4m hectares, the China Cotton Association said on Thursday. The estimated rise in cotton area is, nonetheless, smaller than a 9.8% rise forecast in January.
China's overall soybean area, on a harvested basis, was pegged at 8.5m hectares, 200,000 hectares lower than the current USDA estimate and the lowest since 1999.
The extent of the decline will exacerbate a production deficit in China, the world's top soybean consumer and importer.
Indeed, the attaches stuck by an estimate of 72.5m tonnes for soybean use in 2011-12, "due to increased use of oilseed byproducts in animal production, and higher vegetable oil consumption" as wealthier consumers eat more and better.
Consumption of all protein meals is expected to rise by 6% to 65.6m tonnes, fuelled by rising hog production, which has hit a three-year high.
However, the attaches declined to raise their forecast for China's soybean imports in 2011-12, standing by an estimate of 58.0m tonnes, of which 25.0m tonnes are expected to come from the US, and viewing the extra shortall being made up from inventories.
China's soybean imports are a matter of market sensitivity, given their scope, accounting for nearly 60% of total world buy-ins.
The country imported 5.4m tonnes of soybeans in May, sufficient to keep the country on track to meet a USDA forecast for 2010-11 lowered to 54.5m tonnes.
US shipments export sales and shipments in the latest week were, at 412,000 tonnes and 163,000 tonnes respectively, above the pace needed to meet USDA forecasts.
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Source'; Agrimoney.com
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source'; Agrimoney.com
Wednesday, 1 June 2011
Commodity Prices: To Infinity and Beyond
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Have we seen the end of cheap commodities? Are we in for global inflation -- even hyperinflation? The debate is raging from Wall Street to Main Street, from the White House to houses just like yours.
The accepted wisdom states that as incomes rise in emerging markets like China and India, consumers in those countries will want more and more of the stuff Americans take for granted. But the stuff we take for granted is in limited supply. China and India are each home to more than 1 billion people -- more than three times the U.S. population.
Currently, about 49% of Chinese citizens live in cities, up from 36% in 2000. Yet China's urbanization has a long way to go. Research group McKinsey Global Institute estimates that 66% of the country, or nearly 1 billion Chinese, will live in cities by 2025.
This means they'll need more oil to fuel billions of new cars; billions of tons of iron ore and copper to build new apartment buildings, commercial buildings, and subways; and much, much more food, produced on less land and with less water. Where will it all come from? And will it come in time?
When Malthus met Grantham
Thomas Malthus famously wrote back in the late 1700s that population is limited by how much food we can produce. He also lived at a time when the world population was around 1 billion. Since then, the world has seen a net 6 billion new mouths arrive. At the same time, arable land has declined as cities gobble up real estate and water supplies get diverted, depleted, and polluted.
Renowned value investor Jeremy Grantham argues in his first-quarter letter to investors that the only reason Malthus has been wrong to date is because he didn't foresee the dramatic impact that cheap fossil fuels would have on our ability to grow more food per given measure of space.
However, Grantham continues, the age of cheap oil is coming to an end. With it, so will the world of deflationary commodity prices we've become accustomed to over the past century or so.
How to get in on this
If this is the case, a world of $100 oil will seem like paradise, and investors should be loading their portfolio with energy-related stocks. I'm not just talking about Big Oil names like ExxonMobil, Chevron, and BP, but also the service companies that support them. And the smart money will be looking at the so-called unconventional players: oil sands, deep sea drilling, liquid natural gas (LNG), and shale gas.
This means companies like CGG Veritas (NYSE: CGV ) , one of the leaders in deep-sea seismic mapping; Chicago Bridge & Iron (NYSE: CBI ) , an engineering/construction firm with experience building LNG plants; and SeaDrill (NYSE: SDRL ) , owner of a 60-strong fleet of offshore drilling vessels.
You could also play this trend by noting where China will get its resources from: places like Canada, Australia, Brazil, and Africa. The big, obvious names here are Rio Tinto, BHP Billiton, and Vale. A less obvious play is Brookfield Infrastructure Partners (NYSE: BIP ) , which owns one of the world's largest coal ports in northwest Australia -- a convenient location for supplying Chinese markets -- and high-quality timberland in Canada and the U.S.
You could also play the agriculture angle along with famous trader George Soros. Adecoagro (NYSE: AGRO ) , of which Soros' investment vehicle owns about 25%, owns sugar plantations and farmland in Brazil, Argentina, and Uruguay.
Hold on, not so fast
While Grantham is bullish on commodities (or pessimistic on inflation) going forward, his value instincts tell him that now, when commodity prices are bubbling, is not the time to jump in. He's waiting for a pullback before he goes all in. And he thinks that pullback will come from a slowdown in China.
He agrees with the logic that demand from the massive emerging economies of China and India is pushing us to the limits of our resource supply. Therefore, he says, if markets feel China's economy, which has grown an average of 10% per year since 1978, is going to slow down, we'll see a serious sell-off in commodities. That will be the time to pounce!
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: Motley Fool
Have we seen the end of cheap commodities? Are we in for global inflation -- even hyperinflation? The debate is raging from Wall Street to Main Street, from the White House to houses just like yours.
The accepted wisdom states that as incomes rise in emerging markets like China and India, consumers in those countries will want more and more of the stuff Americans take for granted. But the stuff we take for granted is in limited supply. China and India are each home to more than 1 billion people -- more than three times the U.S. population.
Currently, about 49% of Chinese citizens live in cities, up from 36% in 2000. Yet China's urbanization has a long way to go. Research group McKinsey Global Institute estimates that 66% of the country, or nearly 1 billion Chinese, will live in cities by 2025.
This means they'll need more oil to fuel billions of new cars; billions of tons of iron ore and copper to build new apartment buildings, commercial buildings, and subways; and much, much more food, produced on less land and with less water. Where will it all come from? And will it come in time?
When Malthus met Grantham
Thomas Malthus famously wrote back in the late 1700s that population is limited by how much food we can produce. He also lived at a time when the world population was around 1 billion. Since then, the world has seen a net 6 billion new mouths arrive. At the same time, arable land has declined as cities gobble up real estate and water supplies get diverted, depleted, and polluted.
Renowned value investor Jeremy Grantham argues in his first-quarter letter to investors that the only reason Malthus has been wrong to date is because he didn't foresee the dramatic impact that cheap fossil fuels would have on our ability to grow more food per given measure of space.
However, Grantham continues, the age of cheap oil is coming to an end. With it, so will the world of deflationary commodity prices we've become accustomed to over the past century or so.
How to get in on this
If this is the case, a world of $100 oil will seem like paradise, and investors should be loading their portfolio with energy-related stocks. I'm not just talking about Big Oil names like ExxonMobil, Chevron, and BP, but also the service companies that support them. And the smart money will be looking at the so-called unconventional players: oil sands, deep sea drilling, liquid natural gas (LNG), and shale gas.
This means companies like CGG Veritas (NYSE: CGV ) , one of the leaders in deep-sea seismic mapping; Chicago Bridge & Iron (NYSE: CBI ) , an engineering/construction firm with experience building LNG plants; and SeaDrill (NYSE: SDRL ) , owner of a 60-strong fleet of offshore drilling vessels.
You could also play this trend by noting where China will get its resources from: places like Canada, Australia, Brazil, and Africa. The big, obvious names here are Rio Tinto, BHP Billiton, and Vale. A less obvious play is Brookfield Infrastructure Partners (NYSE: BIP ) , which owns one of the world's largest coal ports in northwest Australia -- a convenient location for supplying Chinese markets -- and high-quality timberland in Canada and the U.S.
You could also play the agriculture angle along with famous trader George Soros. Adecoagro (NYSE: AGRO ) , of which Soros' investment vehicle owns about 25%, owns sugar plantations and farmland in Brazil, Argentina, and Uruguay.
Hold on, not so fast
While Grantham is bullish on commodities (or pessimistic on inflation) going forward, his value instincts tell him that now, when commodity prices are bubbling, is not the time to jump in. He's waiting for a pullback before he goes all in. And he thinks that pullback will come from a slowdown in China.
He agrees with the logic that demand from the massive emerging economies of China and India is pushing us to the limits of our resource supply. Therefore, he says, if markets feel China's economy, which has grown an average of 10% per year since 1978, is going to slow down, we'll see a serious sell-off in commodities. That will be the time to pounce!
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: Motley Fool
Thursday, 26 May 2011
Wheat prices soar as IGC forecasts harvest deficit
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The world will not, after all, balance its books in wheat next season, despite weaker prospects for consumption by biofuels plants highlighted by the mothballing of Europe's biggest bioethanol plant.
The International Grains Council cut its forecast for world wheat consumption in 2011-12 by 3m tonnes, to 669m tonnes, reflecting in part lower expectations for use by biofuels users such as the UK's Ensus site, which is being mothballed because of high grain prices.
"Use [of wheat] for ethanol is growing less quickly than expected, including in the European Union, while greater use of alternative feeds, including barley, is expected to cut the feeding of wheat in Russia," the influential group said.
However, it lowered its estimate for production even more, by 5m tonnes, to 667m tonnes, reflecting "overly dry conditions in the southern US, much of Europe, and parts of the former Soviet Union".
"The outlook for wheat crops has been affected by unfavourable weather in a number of countries."
'Panic buying'
The warning places the intergovernmental group among the growing band of forecasters to ditch expectations of a rise, or even stasis, in global wheat stocks in 2011-12, although inventories are set to remain at an ample level.
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The grain's stocks-to-use ratio, a metric of the availability of a crop, and therefore of its price potential, will come in at 27.7% on IGC estimates, well above the 21.3% level in 2007-08 which helped fuel the last spike in prices.
And it came as, thanks to weather scares, wheat futures posted a second day of strong gains, notably in Minneapolis, which trades spring wheat, which US and Canadian farmers are struggling to plant amidst overly damp conditions.
Minneapolis wheat for July soared to $10.78 a bushel at one point, the highest for a spot contract since July 2008.
"Some panic buying is finally surfacing because of the continued delays in the Northern Plains," Darrell Holaday at US broker Country Futures said.
In Europe, grain institute Arvalis raised its estimate of drought damage to France's soft wheat crop, the region's biggest, to "more than 10%" from "far more than 5%".
Total grains
The IGC edged is forecast for consumption of corn by US bioethanol plants in 2011-12 lower too meaning that, while the estimate for production of overall grains was cut by 5m tonnes, inventories were seen higher than before, at 338m tonnes.
Stocks are expected to end this season at 348m tonnes.
Total grain stocks held by major exporters – a metric which exclude those held by countries such as China which are rarely traded, and so have less of an impact on prices – were pegged at 111m tonnes, an eight-year low but 3m tonnes above the previous forecast.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: Agrimoney.com
The world will not, after all, balance its books in wheat next season, despite weaker prospects for consumption by biofuels plants highlighted by the mothballing of Europe's biggest bioethanol plant.
The International Grains Council cut its forecast for world wheat consumption in 2011-12 by 3m tonnes, to 669m tonnes, reflecting in part lower expectations for use by biofuels users such as the UK's Ensus site, which is being mothballed because of high grain prices.
"Use [of wheat] for ethanol is growing less quickly than expected, including in the European Union, while greater use of alternative feeds, including barley, is expected to cut the feeding of wheat in Russia," the influential group said.
However, it lowered its estimate for production even more, by 5m tonnes, to 667m tonnes, reflecting "overly dry conditions in the southern US, much of Europe, and parts of the former Soviet Union".
"The outlook for wheat crops has been affected by unfavourable weather in a number of countries."
'Panic buying'
The warning places the intergovernmental group among the growing band of forecasters to ditch expectations of a rise, or even stasis, in global wheat stocks in 2011-12, although inventories are set to remain at an ample level.
Download your FREE Agricultural Investment and Farmland Investment Guide here
The grain's stocks-to-use ratio, a metric of the availability of a crop, and therefore of its price potential, will come in at 27.7% on IGC estimates, well above the 21.3% level in 2007-08 which helped fuel the last spike in prices.
And it came as, thanks to weather scares, wheat futures posted a second day of strong gains, notably in Minneapolis, which trades spring wheat, which US and Canadian farmers are struggling to plant amidst overly damp conditions.
Minneapolis wheat for July soared to $10.78 a bushel at one point, the highest for a spot contract since July 2008.
"Some panic buying is finally surfacing because of the continued delays in the Northern Plains," Darrell Holaday at US broker Country Futures said.
In Europe, grain institute Arvalis raised its estimate of drought damage to France's soft wheat crop, the region's biggest, to "more than 10%" from "far more than 5%".
Total grains
The IGC edged is forecast for consumption of corn by US bioethanol plants in 2011-12 lower too meaning that, while the estimate for production of overall grains was cut by 5m tonnes, inventories were seen higher than before, at 338m tonnes.
Stocks are expected to end this season at 348m tonnes.
Total grain stocks held by major exporters – a metric which exclude those held by countries such as China which are rarely traded, and so have less of an impact on prices – were pegged at 111m tonnes, an eight-year low but 3m tonnes above the previous forecast.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: Agrimoney.com
UK wheat supplies cut to 'tightest in modern era'
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UK officials have bowed to the bumper pace of exports and forecast that the country's wheat supplies will end next month at their tightest "in the modern era" – although some believe even this revision may not be the last.
The Home Grown Cereals Authority cut by 91,000 tonnes, to 1.51m tonnes, its estimate for wheat stocks in the European Union's third largest grower of the grain at the close of the 2010-11 crop year.
"This creates the lowest stocks-to-usage ratio since 1997-98," the HGCA said, with the data implying inventories finishing 2010-11 at the equivalent of 10.9% of domestic consumption, or less than six weeks of use.
Michael Archer, the HGCA's senior cereals and oilseeds analyst, told Agrimoney.com that given the different structure of the UK wheat market now and that 13 years ago – which had yet to see changes such as the reform of the EU's common agricultural policy and the widespread use of futures – the figure could be seen as the "lowest we have had in the modern era".
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Ensus effect
The stocks revision reflected lower expectations for imports, which were downgraded by 33,000 tonnes to 1.05m tonnes, and a higher figure for exports, hiked by 335,900 tonnes to 2.44m tonnes - a rise of one-third year on year.
UK wheat has found fresh demand, including its first shipments to Turkey, as buyers denied supplies by Russian and Ukrainian export curbs sought replacement sources, and as France bought in feed grain to replace its own wheat which, even of lower quality, has been finding export orders for food use.
This more than offset the impact of a 108,000-tonne cut to food and industrial consumption of wheat, reflecting the mothballing of the Ensus wheat bioethanol plant in northern England, which is due to shut down over the next few days because of the margin squeeze caused by high grain costs.
However, even the revised stocks estimate may not be low enough, some observers believe, given that exports have reached 2.34m tonnes with three months of the crop year left to go.
"I can see them tailing off, but not that quickly," one trader told Agrimoney.com.
"I can see stocks ending tighter yet."
Download your FREE Agricultural Investment and Farmland Investment Guide here
Stacking up the data
Mr Archer said that the export estimate indeed reflected an assessment that shipments would tail off sharply.
"If they are stronger, it makes the figures difficult to add up," he said.
"It implies higher imports, which we do not expect, or weaker domestic use, which we do not expect, or even lower stocks, which it is difficult to see realistically occurring."
London's old crop July wheat contract stood 1.0% higher at £194.00 a tonne in late deals on an upbeat day for world grains, with Chicago wheat gaining more than 2%, and Minneapolis spring wheat jumping 3%.
London's beter-traded November contract stood 1.1% higher at £193.50 a tonne.
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Source: Agrimoney.com
UK officials have bowed to the bumper pace of exports and forecast that the country's wheat supplies will end next month at their tightest "in the modern era" – although some believe even this revision may not be the last.
The Home Grown Cereals Authority cut by 91,000 tonnes, to 1.51m tonnes, its estimate for wheat stocks in the European Union's third largest grower of the grain at the close of the 2010-11 crop year.
"This creates the lowest stocks-to-usage ratio since 1997-98," the HGCA said, with the data implying inventories finishing 2010-11 at the equivalent of 10.9% of domestic consumption, or less than six weeks of use.
Michael Archer, the HGCA's senior cereals and oilseeds analyst, told Agrimoney.com that given the different structure of the UK wheat market now and that 13 years ago – which had yet to see changes such as the reform of the EU's common agricultural policy and the widespread use of futures – the figure could be seen as the "lowest we have had in the modern era".
Download your FREE Agricultural Investment and Farmland Investment Guide here
Ensus effect
The stocks revision reflected lower expectations for imports, which were downgraded by 33,000 tonnes to 1.05m tonnes, and a higher figure for exports, hiked by 335,900 tonnes to 2.44m tonnes - a rise of one-third year on year.
UK wheat has found fresh demand, including its first shipments to Turkey, as buyers denied supplies by Russian and Ukrainian export curbs sought replacement sources, and as France bought in feed grain to replace its own wheat which, even of lower quality, has been finding export orders for food use.
This more than offset the impact of a 108,000-tonne cut to food and industrial consumption of wheat, reflecting the mothballing of the Ensus wheat bioethanol plant in northern England, which is due to shut down over the next few days because of the margin squeeze caused by high grain costs.
However, even the revised stocks estimate may not be low enough, some observers believe, given that exports have reached 2.34m tonnes with three months of the crop year left to go.
"I can see them tailing off, but not that quickly," one trader told Agrimoney.com.
"I can see stocks ending tighter yet."
Download your FREE Agricultural Investment and Farmland Investment Guide here
Stacking up the data
Mr Archer said that the export estimate indeed reflected an assessment that shipments would tail off sharply.
"If they are stronger, it makes the figures difficult to add up," he said.
"It implies higher imports, which we do not expect, or weaker domestic use, which we do not expect, or even lower stocks, which it is difficult to see realistically occurring."
London's old crop July wheat contract stood 1.0% higher at £194.00 a tonne in late deals on an upbeat day for world grains, with Chicago wheat gaining more than 2%, and Minneapolis spring wheat jumping 3%.
London's beter-traded November contract stood 1.1% higher at £193.50 a tonne.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: Agrimoney.com
Australian Grain Handler Earnings up 66%
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GrainCorp shares jumped nearly 8% after the Australian crop handler unveiled a 66% jump in earnings, raised its profits outlook and flagged upbeat prospects heading even into 2013.
The Sydney-based group reported profits of Aus$88m for the October-to-March half, up from Aus$53m a year before, boosted by the record harvest in its eastern Australian fiefdom.
The company's grain receivals doubled to 14.4m tonnes.
"It's a big year for a volume-based business like ours. Our grains businesses are having an unprecedented year," Alison Watkins, the GrainCorp chief executive said.
The grain marketing division reported earnings before interest, tax, depreciation and amortisation (ebitda) more than doubled, to Aus$35m, with the ports unit seeing ebitda jump 160% to Aus$55m.
Exports jump
And GrainCorp forecast good times ahead, raising its outlook for earnings for the full year to the end of September to Aus$145m-165m, from Aus$115m-135m.
Analysts have factored in full-year earnings of Aus$132m.
"Second-half earnings from grain handling will be supported by the significant carry forward of grain in our country elevators. This means earnings from storage will be higher than the previous half year," Ms Watkins said.
The group also edged higher to 7m-8m tonnes, from 6.5m-7.5m tonnes, its forecast for export volumes, which doubled to 3.2m tonnes in the first half.
Another strong harvest?
Prospects looked better for 2011-12 financial year too, given that GrainCorp expects to begin it with carryover stocks of an "above average" 6m tonnes of grain, compared with the 2.6m tonnes with which it started the current financial year.
The group forecast "busy storage, and logistics and export programmes" for 2011-12, boosted also by the prospect of "positive crop volume" from Australia's next harvest too.
GrainCorp quoted Australian Crop Forecasters data forecasting an eastern Australian barley and canola crop of 19.0m tonnes, compared with some 22m tonnes from the last harvest, but nonetheless a historically strong result.
The forecast assumes sowings rising 8% to 9.5m hectares, but yields dropping 20% to 2.0 tonnes per hectare from last time, when plentiful rains boosted crops.
GrainCorp said that the crop volumes it was left with as of the beginning of its 2012-13 financial year were "likely" to prove "above long-term average" levels.
Malt decline
The data did reveal a 3.4% decline to Aus$ 57m in ebitda at the malt business, blamed on an "unfavourable" exchange rate, following the appreciation in the dollar to its highest for nearly 30 years against the US dollar.
"Consolidation in the global brewing industry is giving brewers additional bargaining power with suppliers," Ms Watkins added.
The first half results were also swollen by a $40.4m gain from marking derivatives to market prices, a windfall the group expects to realise in the second half of its financial year.
Nonetheless, GrainCorp shares closed up Aus$0.62 at Aus$8.38.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: Agrimoney.com
GrainCorp shares jumped nearly 8% after the Australian crop handler unveiled a 66% jump in earnings, raised its profits outlook and flagged upbeat prospects heading even into 2013.
The Sydney-based group reported profits of Aus$88m for the October-to-March half, up from Aus$53m a year before, boosted by the record harvest in its eastern Australian fiefdom.
The company's grain receivals doubled to 14.4m tonnes.
"It's a big year for a volume-based business like ours. Our grains businesses are having an unprecedented year," Alison Watkins, the GrainCorp chief executive said.
The grain marketing division reported earnings before interest, tax, depreciation and amortisation (ebitda) more than doubled, to Aus$35m, with the ports unit seeing ebitda jump 160% to Aus$55m.
Exports jump
And GrainCorp forecast good times ahead, raising its outlook for earnings for the full year to the end of September to Aus$145m-165m, from Aus$115m-135m.
Analysts have factored in full-year earnings of Aus$132m.
"Second-half earnings from grain handling will be supported by the significant carry forward of grain in our country elevators. This means earnings from storage will be higher than the previous half year," Ms Watkins said.
The group also edged higher to 7m-8m tonnes, from 6.5m-7.5m tonnes, its forecast for export volumes, which doubled to 3.2m tonnes in the first half.
Another strong harvest?
Prospects looked better for 2011-12 financial year too, given that GrainCorp expects to begin it with carryover stocks of an "above average" 6m tonnes of grain, compared with the 2.6m tonnes with which it started the current financial year.
The group forecast "busy storage, and logistics and export programmes" for 2011-12, boosted also by the prospect of "positive crop volume" from Australia's next harvest too.
GrainCorp quoted Australian Crop Forecasters data forecasting an eastern Australian barley and canola crop of 19.0m tonnes, compared with some 22m tonnes from the last harvest, but nonetheless a historically strong result.
The forecast assumes sowings rising 8% to 9.5m hectares, but yields dropping 20% to 2.0 tonnes per hectare from last time, when plentiful rains boosted crops.
GrainCorp said that the crop volumes it was left with as of the beginning of its 2012-13 financial year were "likely" to prove "above long-term average" levels.
Malt decline
The data did reveal a 3.4% decline to Aus$ 57m in ebitda at the malt business, blamed on an "unfavourable" exchange rate, following the appreciation in the dollar to its highest for nearly 30 years against the US dollar.
"Consolidation in the global brewing industry is giving brewers additional bargaining power with suppliers," Ms Watkins added.
The first half results were also swollen by a $40.4m gain from marking derivatives to market prices, a windfall the group expects to realise in the second half of its financial year.
Nonetheless, GrainCorp shares closed up Aus$0.62 at Aus$8.38.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: Agrimoney.com
Romania’s wheat harvest may rise 23 percent this year
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Romania’s wheat harvest may rise 23 percent this year, helped by favorable weather and higher investment in fertilizers, Agriculture Minister Valeriu Tabara said. The eastern European country may harvest as much as 7 million metric tons of the grain, up from 5.7 million tons last year, he said in an interview in Bucharest. The government wants to increase exports of all cereals so farmers can capitalize on higher international prices, Tabara said reports Bloomberg.
Source: Balkans News
Romania’s wheat harvest may rise 23 percent this year, helped by favorable weather and higher investment in fertilizers, Agriculture Minister Valeriu Tabara said. The eastern European country may harvest as much as 7 million metric tons of the grain, up from 5.7 million tons last year, he said in an interview in Bucharest. The government wants to increase exports of all cereals so farmers can capitalize on higher international prices, Tabara said reports Bloomberg.
Source: Balkans News
OECD Present at Leading World Agriculture Investment Conference
Over 80 institutional investors and fund managers are set to hear exclusive OECD updates on the determinants of agro-investment and initiatives for promoting investment in agriculture.
Emergent Asset management, Macquarie, Duxton Asset Management, InvestAg Savills and many more are also onboard to contribute to the broader discussion around strategies and risks for participating in agriculture.
This exclusive meeting provides a once-only chance in June (29-30) to network with key investors and Ag managers, and to effortlessly catch-up on where allocations are being made and how best to develop the ideal Ag portfolio.
The World Agriculture Investment Conference Asia is the third event in our global series: please contact George Kiley to learn more about our Europe (as covered by BBC, Thomson Reuters and Wall Street Journal) and USA events.
Read more: http://www.digitaljournal.com/pr/318802#ixzz1NSW08Pya
Emergent Asset management, Macquarie, Duxton Asset Management, InvestAg Savills and many more are also onboard to contribute to the broader discussion around strategies and risks for participating in agriculture.
This exclusive meeting provides a once-only chance in June (29-30) to network with key investors and Ag managers, and to effortlessly catch-up on where allocations are being made and how best to develop the ideal Ag portfolio.
The World Agriculture Investment Conference Asia is the third event in our global series: please contact George Kiley to learn more about our Europe (as covered by BBC, Thomson Reuters and Wall Street Journal) and USA events.
Read more: http://www.digitaljournal.com/pr/318802#ixzz1NSW08Pya
G8 Warned of Pending Food Crisis
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G8 leaders are being called on to make stronger ties with Africa a top priority at their meeting in Deauville, France, especially regarding food security and poverty reduction. The International Food Policy Research Institute [IFPRI] warned of another food crisis unless action is taken.
“For the last decade or so, the partnership between Africa and the development agencies or the development partners, has been strengthened significantly. But I think there’s still room to improve. In particular, the G8 countries should really, really think seriously to meet the commitments they have made before,” said Shenggen Fan, IFPRI director general.
Download your FREE Agricultural Investment and Farmland Investment Guide here
It could happen again
At the L’Aquila summit in Italy in 2009, G8 leaders pledged to take action to deal with the food crisis, which saw prices rise and supplies fall. The conditions triggered riots in a number of countries in 2007 and 2008.
Fan said, “When the G8 met in Italy, they committed $22 billion to support smallholder agriculture in developing countries, particularly Africa. Today, that commitment is still there [but] they have not met much of the commitment yet.”
Download your FREE Agricultural Investment and Farmland Investment Guide here
He warned the world is poised to have another food crisis, unless the pledge is paid in full.
“I think it’s already coming. In the last 10 months, the wheat price has increased by a hundred percent. Maize price has also increased by 100%. In addition, prices for meat, dairy products have also increased,” he said.
Feeling the effects
When food prices increase many poor, not only just the consumers, but also even producers, suffer,” he said, and added, “If it happens again, we will probably lose the progress we have made in the last decade or so.”
Download your FREE Agricultural Investment and Farmland Investment Guide here
He warned women and children are the most vulnerable to volatile prices and markets. Hunger and malnutrition, he said, can permanently damage a child’s brain development. “We need to fix this problem.”
He rejected the idea of spending cutbacks on agriculture because of the global recession.
“Agriculture is so critical in terms of hunger reduction, poverty reduction and also in terms of future growth. If we do not invest in agriculture…more people will suffer from hunger and poverty,” he said.
MDGs
Download your FREE Agricultural Investment and Farmland Investment Guide here
The U.N. Millennium Development Goals are due to be achieved in 2015. The goals cover a wide range of issues, including poverty, hunger and health. Fan said the $22 billion in promised agricultural investment would help in reaching those goals.
“I think $22 billion is a good start, but it’s definitely not sufficient. More resources are required. And more importantly, these resources have to be spent more efficiently to achieve certain development goals by improving policies, governance, management and institutions,” he said.
Download your FREE Agricultural Investment and Farmland Investment Guide here
IFPRI reported African countries have taken the initiative to improve their agricultural sector.
“They have made progress in the last decade or so. Many countries have increased their spending in agriculture. We have seen some successes in many parts of Africa. Agriculture growth is accelerating, but we need to continue to do that,” said Fan.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: VOA News
G8 leaders are being called on to make stronger ties with Africa a top priority at their meeting in Deauville, France, especially regarding food security and poverty reduction. The International Food Policy Research Institute [IFPRI] warned of another food crisis unless action is taken.
“For the last decade or so, the partnership between Africa and the development agencies or the development partners, has been strengthened significantly. But I think there’s still room to improve. In particular, the G8 countries should really, really think seriously to meet the commitments they have made before,” said Shenggen Fan, IFPRI director general.
Download your FREE Agricultural Investment and Farmland Investment Guide here
It could happen again
At the L’Aquila summit in Italy in 2009, G8 leaders pledged to take action to deal with the food crisis, which saw prices rise and supplies fall. The conditions triggered riots in a number of countries in 2007 and 2008.
Fan said, “When the G8 met in Italy, they committed $22 billion to support smallholder agriculture in developing countries, particularly Africa. Today, that commitment is still there [but] they have not met much of the commitment yet.”
Download your FREE Agricultural Investment and Farmland Investment Guide here
He warned the world is poised to have another food crisis, unless the pledge is paid in full.
“I think it’s already coming. In the last 10 months, the wheat price has increased by a hundred percent. Maize price has also increased by 100%. In addition, prices for meat, dairy products have also increased,” he said.
Feeling the effects
When food prices increase many poor, not only just the consumers, but also even producers, suffer,” he said, and added, “If it happens again, we will probably lose the progress we have made in the last decade or so.”
Download your FREE Agricultural Investment and Farmland Investment Guide here
He warned women and children are the most vulnerable to volatile prices and markets. Hunger and malnutrition, he said, can permanently damage a child’s brain development. “We need to fix this problem.”
He rejected the idea of spending cutbacks on agriculture because of the global recession.
“Agriculture is so critical in terms of hunger reduction, poverty reduction and also in terms of future growth. If we do not invest in agriculture…more people will suffer from hunger and poverty,” he said.
MDGs
Download your FREE Agricultural Investment and Farmland Investment Guide here
The U.N. Millennium Development Goals are due to be achieved in 2015. The goals cover a wide range of issues, including poverty, hunger and health. Fan said the $22 billion in promised agricultural investment would help in reaching those goals.
“I think $22 billion is a good start, but it’s definitely not sufficient. More resources are required. And more importantly, these resources have to be spent more efficiently to achieve certain development goals by improving policies, governance, management and institutions,” he said.
Download your FREE Agricultural Investment and Farmland Investment Guide here
IFPRI reported African countries have taken the initiative to improve their agricultural sector.
“They have made progress in the last decade or so. Many countries have increased their spending in agriculture. We have seen some successes in many parts of Africa. Agriculture growth is accelerating, but we need to continue to do that,” said Fan.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: VOA News
Hedge fund managers pour assets into farmland as doomsday food scenario approaches
Download your FREE Agricultural Investment and Farmland Investment Guide here
Going back to the land has always been thought of as a thing for hippies, eco-nuts, and doomsday survivalist, but now hedge fund managers are jumping on the bandwagon too.
The New York Observer recently spoke to such a hedge fund manager working on a fund that ranks as approximately the 15th largest farmer in America.
The media first picked up on the land investment pattern in 2008 in the February Times of London piece, "The Hedge Fund Manager Who Bought a Farm," which detailed a British hedge fund manager's attempt to play off the rising prices of grains in order to get a hold of local farmland. It was followed shortly by coverage by the Financial Times that said hedge funds and investment banks were "swapping their Gucci for gumboots".
Download your FREE Agricultural Investment and Farmland Investment Guide here
Today, the increase in the purchase of farmland both in America and abroad is so drastic that in February, Thomas Hoenig, the president of the Federal Reserve Bank of Kansas City, warned against the possibilities of a farmland bubble.
A January study commissioned by the Organization for Economic Cooperation and Development estimated the amount of private capital currently committed to farmland and agricultural infrastructure at $14 billion. It also estimated that future investments will "dwarf" what's currently being thrown into land by two to three times and projected the amount of capital potentially entering the sector over the next decade to go beyond $150 billion.
The recent spike in investments of farmland is being driven by fear. The hedge fund manager and others see a doomsday scenario brought on by a dollar crisis, out of control inflation and an uncertain political climate both domestically and globally.
Download your FREE Agricultural Investment and Farmland Investment Guide here
"The CPI supposedly today is something like 1.5 percent. We think the actual rate of inflation is something closer to 6 or 7 percent on an annual basis," said the hedge fund manager. "It's also not about what it's been over the last 10 years; it's about what it's going to be over the next 10 years."
Does he think this is an end of the world situation?
"It really is. I tell my fiancee this from time to time, and I've stopped telling her this, because it's not the most pleasant thought," he said. "We just can't keep living the way we're living. It'll end within our lifetime. We're just going to run out of certain things. We'll just have to learn how to adjust."
With recent news that the World Food Program is running out of food (http://www.upi.com/Top_News/World-N...) and the U.S. may not be far behind (http://www.dailyfinance.com/2010/01...), things are not looking good.
Download your FREE Agricultural Investment and Farmland Investment Guide here
"Sometime in the next few years, we're going to have very serious shortages of food everywhere in the world," said investor Jim Rogers on CNBC. "And prices are going to go through the roof."
The new information is just another reason this may not be a bad time for regular people to start growing their own food and even investing in farmland.
Sources for this article include:
http://www.naturalnews.com/032509_farmland_doomsday.html
http://www.observer.com/hedge-funds ...
http://www.upi.com/Top_News/World-N ...
http://www.dailyfinance.com/2010/0 1 ...
Download your FREE Agricultural Investment and Farmland Investment Guide here
Learn more: http://www.naturalnews.com/032509_farmland_doomsday.html#ixzz1NSNbZOBH
Going back to the land has always been thought of as a thing for hippies, eco-nuts, and doomsday survivalist, but now hedge fund managers are jumping on the bandwagon too.
The New York Observer recently spoke to such a hedge fund manager working on a fund that ranks as approximately the 15th largest farmer in America.
The media first picked up on the land investment pattern in 2008 in the February Times of London piece, "The Hedge Fund Manager Who Bought a Farm," which detailed a British hedge fund manager's attempt to play off the rising prices of grains in order to get a hold of local farmland. It was followed shortly by coverage by the Financial Times that said hedge funds and investment banks were "swapping their Gucci for gumboots".
Download your FREE Agricultural Investment and Farmland Investment Guide here
Today, the increase in the purchase of farmland both in America and abroad is so drastic that in February, Thomas Hoenig, the president of the Federal Reserve Bank of Kansas City, warned against the possibilities of a farmland bubble.
A January study commissioned by the Organization for Economic Cooperation and Development estimated the amount of private capital currently committed to farmland and agricultural infrastructure at $14 billion. It also estimated that future investments will "dwarf" what's currently being thrown into land by two to three times and projected the amount of capital potentially entering the sector over the next decade to go beyond $150 billion.
The recent spike in investments of farmland is being driven by fear. The hedge fund manager and others see a doomsday scenario brought on by a dollar crisis, out of control inflation and an uncertain political climate both domestically and globally.
Download your FREE Agricultural Investment and Farmland Investment Guide here
"The CPI supposedly today is something like 1.5 percent. We think the actual rate of inflation is something closer to 6 or 7 percent on an annual basis," said the hedge fund manager. "It's also not about what it's been over the last 10 years; it's about what it's going to be over the next 10 years."
Does he think this is an end of the world situation?
"It really is. I tell my fiancee this from time to time, and I've stopped telling her this, because it's not the most pleasant thought," he said. "We just can't keep living the way we're living. It'll end within our lifetime. We're just going to run out of certain things. We'll just have to learn how to adjust."
With recent news that the World Food Program is running out of food (http://www.upi.com/Top_News/World-N...) and the U.S. may not be far behind (http://www.dailyfinance.com/2010/01...), things are not looking good.
Download your FREE Agricultural Investment and Farmland Investment Guide here
"Sometime in the next few years, we're going to have very serious shortages of food everywhere in the world," said investor Jim Rogers on CNBC. "And prices are going to go through the roof."
The new information is just another reason this may not be a bad time for regular people to start growing their own food and even investing in farmland.
Sources for this article include:
http://www.naturalnews.com/032509_farmland_doomsday.html
http://www.observer.com/hedge-funds ...
http://www.upi.com/Top_News/World-N ...
http://www.dailyfinance.com/2010/0 1 ...
Download your FREE Agricultural Investment and Farmland Investment Guide here
Learn more: http://www.naturalnews.com/032509_farmland_doomsday.html#ixzz1NSNbZOBH
Monday, 23 May 2011
Rise in Midwest farmland prices hits 32-year high
Download your FREE Agricultural Investment and Farmland Investment Guide here
The rate of increase in Midwest farm values has hit a 32-year high, despite a rise in land for sale – and the rally does not look over yet.
Farmland prices in major agricultural states such as Illinois and Iowa soared 16%, year on year, in the first quarter of 2011, the Federal Reserve said.
The increase in the growth rate to a figure matched only once since 1979, in 2007, came despite a rise in the plots offered for sale, with the extra supplies mopped up in particular by farmers clamouring for extra land to cash in on elevated crop prices.
"The latest gains were spurred by higher commodity prices, which prompted farmers to buy additional land," the Federal Reserve's Chicago bank said.
Indeed, farmers "tended to outbid" investors in the land rush.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Market boom
The market conditions, with rising prices and volumes, would appear ideal for agents assisting in land sales, and relying on commissions for deals.
"The number of farms sold, the acreage sold, and the amount of farmland for sale grew," the Chicago Fed said.
And more than half bankers the Fed spoke to for its report forecast further gains ahead for land prices, with only 2% expecting a decline.
Download your FREE Agricultural Investment and Farmland Investment Guide here
"The rapid increase in agricultural land values may not be over," the Fed said, adding that the increases had been reflected in rental prices, which had risen nearly in line, with 14%.
Paybacks
The rise in land prices was supported by an increase in funds for lending to farmers although, at just under 70%, the loan-to-deposit ratio – a key measure of the levels to which borrowers are extending themselves – fell to a 14-year low and well below levels ringing alarm bells in banks.
Indeed, farmers paid of a stack of borrowings taken out for purchases other than land, with demand for new ones falling to a 24-year low.
"Farmers had less need to seek bank loans," the Fed said.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: Agrimoney
The rate of increase in Midwest farm values has hit a 32-year high, despite a rise in land for sale – and the rally does not look over yet.
Farmland prices in major agricultural states such as Illinois and Iowa soared 16%, year on year, in the first quarter of 2011, the Federal Reserve said.
The increase in the growth rate to a figure matched only once since 1979, in 2007, came despite a rise in the plots offered for sale, with the extra supplies mopped up in particular by farmers clamouring for extra land to cash in on elevated crop prices.
"The latest gains were spurred by higher commodity prices, which prompted farmers to buy additional land," the Federal Reserve's Chicago bank said.
Indeed, farmers "tended to outbid" investors in the land rush.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Market boom
The market conditions, with rising prices and volumes, would appear ideal for agents assisting in land sales, and relying on commissions for deals.
"The number of farms sold, the acreage sold, and the amount of farmland for sale grew," the Chicago Fed said.
And more than half bankers the Fed spoke to for its report forecast further gains ahead for land prices, with only 2% expecting a decline.
Download your FREE Agricultural Investment and Farmland Investment Guide here
"The rapid increase in agricultural land values may not be over," the Fed said, adding that the increases had been reflected in rental prices, which had risen nearly in line, with 14%.
Paybacks
The rise in land prices was supported by an increase in funds for lending to farmers although, at just under 70%, the loan-to-deposit ratio – a key measure of the levels to which borrowers are extending themselves – fell to a 14-year low and well below levels ringing alarm bells in banks.
Indeed, farmers paid of a stack of borrowings taken out for purchases other than land, with demand for new ones falling to a 24-year low.
"Farmers had less need to seek bank loans," the Fed said.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: Agrimoney
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