Australia's top grain growing state may be on for a near-record canola crop despite the oilseed, like barley's, being downgraded in sowing plans by a stampede for wheat.
Growers in Western Australia, which typically provides roughly 40% of the national wheat harvest, have planted a record 5.4m hectares with the grain, a 10% rise year on year, Australia & New Zealand Bank said.
The increase has come largely at the expense of barley and canola, although growers, encouraged by high prices, have also brought marginal land into production, lifting overall sowings by some 300,000 hectares to 8m hectares.
Barley seedings have dropped to a five-year low of 1.1m hectares, with canola area down some 17% at 1.0m hectares.
Weak prospects
Nonetheless, this figure remains higher than historical levels and - assuming a trend yield of 1.0 tonnes per hectare, which the state fell short of last year because of drought - production should reach 1.07m tonnes, ANZ said.
The current record was set in 2008-09, at 1.18m tonnes.
A big crop of the rapeseed variant would be a welcome boost given setbacks to crops elsewhere, with a wet spring holding back output in Canada, the top canola exporter.
Canada's farm ministry overnight cut by 600,000 tonnes, to 12.7m tonnes, its estimate for domestic production.
Meanwhile, hopes for the rapeseed harvest in Germany, the European Union's biggest producer, have been dented by a dearth of rain.
Oil World, the influential oilseeds analysis group, last week cut to 4.65m tonnes its forecast for the harvest, representing a fall of more than 1m tonnes from last year's result, while German co-operatives have estimated the crop at 4.4m tonnes.
The US Department of Agriculture foresees world rapeseed production, including canola, falling behind consumption in 2011-12 for a second successive season.
Into the red
The cut by Australian growers in canola seedings this year is in part down to weather, with a dry start to autumn persuading many farmers to delay sowings.
"Farmers that chose to wait for rain before sowing would have had to wait until mid-May. At that point, it was quite late to be sowing canola, and most farmers would have opted to sow wheat," ANZ said.
However, it also reflects the higher costs, in fertilizer and pesticide terms, of growing canola, which do not look this season like being rewarded with greater profits.
Gross margins were, at about Aus$120 a tonne last season, roughly 50% higher than those for wheat. However, thanks to especially high wheat prices, those figures have now converged at about Aus$300 a tonne.
With farms in some areas of Western Australia losing Aus$500,000 each last season, because of the drought, "managing cash flows and debt levels for the 2011 cropping season has been a priority", ANZ said.
Source: Agrimoney.com
Showing posts with label australian farmland. Show all posts
Showing posts with label australian farmland. Show all posts
Wednesday, 8 June 2011
Foreign farmland investment in Western District Australia sparks support for tighter regulation
Independent Senator Nick Xenophon says the potential purchase of five properties in the Western District of Victoria by a Middle East agricultural company highlights the importance of tightening the laws on foreign investment
It has been reported that Qatar's Hassad Foods is set to purchase 8500 hectares of farmland in a deal worth $35 million.
Currently, the Foreign Investment Review Board only assesses purchases that exceed $230 million.
Senator Xenophon has introduced a Private Member's Bill which will require all purchases of agricultural land more than five hectares to be scrutinised by the FIRB.
"I don't know why we have such an extraordinarily high threshold here in Australia," he says.
Senator Xenophon says foreign countries are investing in Australia because they understand the importance of food security.
"It's going to become the big issue of the 21st century (and) we have been less than smart in our approach to this."
Victorian Farmers Federation President Andrew Broad agrees that tightening the regulation of foreign investment is crucial.
But he says a five hectare threshold would be too onerous to govern.
Mr Broad says investments that exceed $20 million should be investigated.
"It doesn't have to be onerous, I don't think the Foreign Investment Review Board should stop every transaction, it's just a matter of providing some oversight," he says.
"We need to be aware this is what's happening around the world and the Australia Government is going to be 10 years behind the mark and it will be too late."
Mr Broad says Australia is in a good position to increase food production capacity to meet rising global demand.
"But we are selling both the soil and chance to profit off it," he says.
"Id' rather sell them heaps and heaps of milk, heaps and heaps of wool and heaps and heaps of grain, than sell them the farm once and not be able to capitalise into perpetuity."
"There are a lot of people in Federal Government at the moment whose ears are shut to agriculture."
Senator Xenophon says the Bill is due to voted on later this year.
Soucre: http://www.abc.net.au/local/audio/2011/06/08/3238857.htm?site=ballarat
It has been reported that Qatar's Hassad Foods is set to purchase 8500 hectares of farmland in a deal worth $35 million.
Currently, the Foreign Investment Review Board only assesses purchases that exceed $230 million.
Senator Xenophon has introduced a Private Member's Bill which will require all purchases of agricultural land more than five hectares to be scrutinised by the FIRB.
"I don't know why we have such an extraordinarily high threshold here in Australia," he says.
Senator Xenophon says foreign countries are investing in Australia because they understand the importance of food security.
"It's going to become the big issue of the 21st century (and) we have been less than smart in our approach to this."
Victorian Farmers Federation President Andrew Broad agrees that tightening the regulation of foreign investment is crucial.
But he says a five hectare threshold would be too onerous to govern.
Mr Broad says investments that exceed $20 million should be investigated.
"It doesn't have to be onerous, I don't think the Foreign Investment Review Board should stop every transaction, it's just a matter of providing some oversight," he says.
"We need to be aware this is what's happening around the world and the Australia Government is going to be 10 years behind the mark and it will be too late."
Mr Broad says Australia is in a good position to increase food production capacity to meet rising global demand.
"But we are selling both the soil and chance to profit off it," he says.
"Id' rather sell them heaps and heaps of milk, heaps and heaps of wool and heaps and heaps of grain, than sell them the farm once and not be able to capitalise into perpetuity."
"There are a lot of people in Federal Government at the moment whose ears are shut to agriculture."
Senator Xenophon says the Bill is due to voted on later this year.
Soucre: http://www.abc.net.au/local/audio/2011/06/08/3238857.htm?site=ballarat
Thursday, 2 June 2011
Farmland Investment - London Investor Snaps up Australian Farmland
Download your FREE Agricultural Investment and Farmland Investment Guide here
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
Tuesday, 26 April 2011
UAE to Invest In Farmland
Download your FREE Agriculture Investment and Farmland Investment Guide here.
The UAE plans to hold further talks with officials from Australia with a view to invest in farmland as part of its plan to tackle food security.
Sultan Bin Saeed Al Mansouri, the UAE's Minister of Economy on Sunday hailed the recent visit of a UAE delegation to Australia as a valuable step forward in economic relations between the two countries.
He said in comments published by state news agency WAM that it would "open new prospects for cooperation in the fields of innovation, research and development, technology, agriculture and livestock production, petrochemicals and others".
Part of the delegation was Khadem Al Darei, managing director and vice chairman of Al Dahra Agriculture, who said: "The visit identified attractive investment prospects in Australia and plenty of opportunities to share experiences and insights, as well as opportunities in the agribusiness where we are keen to import livestock and fresh and frozen meat from Australia, in order to satisfy the local demand.
Download your FREE Agriculture Investment and Farmland Investment Guide here.
"We also discussed possibilities of investing in agriculture lands to produce basic commodities to support the strategic reserve of the UAE."
In the UAE, the government and private companies have looked to lease and buy farmland to help ensure domestic food supplies.
Like other Gulf states, the UAE suffered in 2008 when international food prices spiked to record levels, forcing up import bills.
Al Mansouri said: "We expect even closer cooperation and more mutual investment opportunities as an outcome of this extremely fruitful meeting."
Download your FREE Agriculture Investment and Farmland Investment Guide here.
To ensure continuity of cooperation with the Australian side at the same pace, the Ministry of Economy has adopted an integrated follow up mechanism to oversee the developments in bilateral relations between the two countries on both public and private sector levels.
Mohammed Ahmed Bin Abdul Aziz Al Shihhi, Undersecretary of the Ministry of Economy, added: "We have agreed with the Australian side to adopt a follow up mechanism that insures implementing all the projects and cooperation highlighted during the visit."
Officials agreed to increase the supply of meat from Australia to UAE markets to satisfy the needs of the local market and specifically during the holy month of Ramadan.
Download your FREE Agriculture Investment and Farmland Investment Guide here.
Source: Arabian Business
The UAE plans to hold further talks with officials from Australia with a view to invest in farmland as part of its plan to tackle food security.
Sultan Bin Saeed Al Mansouri, the UAE's Minister of Economy on Sunday hailed the recent visit of a UAE delegation to Australia as a valuable step forward in economic relations between the two countries.
He said in comments published by state news agency WAM that it would "open new prospects for cooperation in the fields of innovation, research and development, technology, agriculture and livestock production, petrochemicals and others".
Part of the delegation was Khadem Al Darei, managing director and vice chairman of Al Dahra Agriculture, who said: "The visit identified attractive investment prospects in Australia and plenty of opportunities to share experiences and insights, as well as opportunities in the agribusiness where we are keen to import livestock and fresh and frozen meat from Australia, in order to satisfy the local demand.
Download your FREE Agriculture Investment and Farmland Investment Guide here.
"We also discussed possibilities of investing in agriculture lands to produce basic commodities to support the strategic reserve of the UAE."
In the UAE, the government and private companies have looked to lease and buy farmland to help ensure domestic food supplies.
Like other Gulf states, the UAE suffered in 2008 when international food prices spiked to record levels, forcing up import bills.
Al Mansouri said: "We expect even closer cooperation and more mutual investment opportunities as an outcome of this extremely fruitful meeting."
Download your FREE Agriculture Investment and Farmland Investment Guide here.
To ensure continuity of cooperation with the Australian side at the same pace, the Ministry of Economy has adopted an integrated follow up mechanism to oversee the developments in bilateral relations between the two countries on both public and private sector levels.
Mohammed Ahmed Bin Abdul Aziz Al Shihhi, Undersecretary of the Ministry of Economy, added: "We have agreed with the Australian side to adopt a follow up mechanism that insures implementing all the projects and cooperation highlighted during the visit."
Officials agreed to increase the supply of meat from Australia to UAE markets to satisfy the needs of the local market and specifically during the holy month of Ramadan.
Download your FREE Agriculture Investment and Farmland Investment Guide here.
Source: Arabian Business
Thursday, 21 April 2011
DGC Asset Management: Farmland Investment - Food Security or Profiteering?
Download your FREE Agriculture Investment and Farmland Investment Guide here
Punjab, India’s government is considering buying or leasing millions of acres of land in Central and South America, where Punjabi farmers already cultivate tens of thousands of acres. The purpose: to grow crops that will help feed India’s 1.1 billion people.
North of Buenos Aires, Argentina, a Japanese company is growing corn and soybeans for shipment back to Japan. In Africa, a Japanese aid agency works with partners from Brazil and Mozambique to convert part of Guinea’s vast savannah into corn, soybean and cotton production.
A leading Malaysian palm-oil producer is looking at plans for a 300,000-hectare (720,000-acre) palm-oil plantation in Cameroon.
Bahrain currently produces bananas on 2,400 acres in the Philippines. Kuwait is interested in another 2,400 acres there for rice production. Saudi investors are negotiating for an additional 2,400 acres for aquaculture and are already pumping money into a 12,000-acre project to grow basmati rice, corn, bananas and pineapple.
Download your FREE Agriculture Investment and Farmland Investment Guide here
In Mongolia, South Korea has bought more than 800,000 acres to develop “an overseas food base” to procure more food resources.
In Romania, nearly 2.4 million acres of farmland are now foreign-owned – about 12% of the country’s base farmland.
Demand for good agricultural land has exploded around the globe. Before 2008, global farmland expanded on average by fewer than 10 million acres annually, but expansion plans in 2009 totaled more than 100 million acres, according to the World Bank. More than 70% of the demand has been in Africa, where Ethiopia, Mozambique, Sudan and other countries have transferred millions of acres to investors.
After easing last year, the drumbeat of development resumed in 2011, as evidenced by the press reports above.
Download your FREE Agriculture Investment and Farmland Investment Guide here
Details vary from case to case – for example, some deals are by governments and others by groups of foreign investors – but most examples involve richer countries with large populations and limited agricultural resources attempting to improve their food security by controlling land and agricultural production in poorer, less developed nations.
That’s no surprise to Robert Thompson, former director of rural development at the World Bank.
“Nothing will bring a government down faster than hungry people,” says Thompson. “I think the most important crisis occurred in 2008 when a number of exporting countries went to either taxing or banning exports, and food importers like China began to get nervous about food availability.”
He notes that when India halted rice exports in 2008, the Philippines panicked, paying exorbitant prices to lock up any available supplies of rice in the free market. “They decided they would pay any price rather than face shortages.
“If a country can’t supply its food domestically, it wants assurances that supplies will be there through thick and thin and that exporting countries will allow trade to flow,” he says.
Download your FREE Agriculture Investment and Farmland Investment Guide here
Spiking food prices in 2007-2008 and again this year “has generated more concern to get (world) agricultural development higher on the agenda. In the 1960s and 1970s it used to be a priority. In the 1980s 25% of U.S. foreign aid/year was for development. That was down to just 1% a year ago,” Thompson notes.
Not surprisingly, there’s also a good deal of opposition to the sales boom, often characterized by opponents as a “land grab.”
In Romania, the Agricultural Producers Associations League has lobbied against land sales to state-owned foreign investment funds.
Download your FREE Agriculture Investment and Farmland Investment Guide here
Brazil is preparing rules to block foreign governments, state-owned companies and speculators from buying agricultural land, although it intends to allow sales to “genuine” private investors.
Thompson notes that South Korean efforts to buy land in Madagascar were blocked when public pressure forced Madagascar’s government to cancel the deal.
There’s even a website, http://farmlandgrab.org, chronicling press reports on the issue.
In practice, sale results are mixed. Many announced deals have never been implemented, or plans have been scaled back due to everything from changing prices to inadequate infrastructure, technology and institutions. The World Bank determined that as of last September, actual farming had started on only 21% of the announced deals.
In other instances, development efforts have dislocated local farming communities, leading to instability and fueling concerns that the purchases are another form of colonialism.
Download your FREE Agriculture Investment and Farmland Investment Guide here
Source: Corn and Soybean Digest
Punjab, India’s government is considering buying or leasing millions of acres of land in Central and South America, where Punjabi farmers already cultivate tens of thousands of acres. The purpose: to grow crops that will help feed India’s 1.1 billion people.
North of Buenos Aires, Argentina, a Japanese company is growing corn and soybeans for shipment back to Japan. In Africa, a Japanese aid agency works with partners from Brazil and Mozambique to convert part of Guinea’s vast savannah into corn, soybean and cotton production.
A leading Malaysian palm-oil producer is looking at plans for a 300,000-hectare (720,000-acre) palm-oil plantation in Cameroon.
Bahrain currently produces bananas on 2,400 acres in the Philippines. Kuwait is interested in another 2,400 acres there for rice production. Saudi investors are negotiating for an additional 2,400 acres for aquaculture and are already pumping money into a 12,000-acre project to grow basmati rice, corn, bananas and pineapple.
Download your FREE Agriculture Investment and Farmland Investment Guide here
In Mongolia, South Korea has bought more than 800,000 acres to develop “an overseas food base” to procure more food resources.
In Romania, nearly 2.4 million acres of farmland are now foreign-owned – about 12% of the country’s base farmland.
Demand for good agricultural land has exploded around the globe. Before 2008, global farmland expanded on average by fewer than 10 million acres annually, but expansion plans in 2009 totaled more than 100 million acres, according to the World Bank. More than 70% of the demand has been in Africa, where Ethiopia, Mozambique, Sudan and other countries have transferred millions of acres to investors.
After easing last year, the drumbeat of development resumed in 2011, as evidenced by the press reports above.
Download your FREE Agriculture Investment and Farmland Investment Guide here
Details vary from case to case – for example, some deals are by governments and others by groups of foreign investors – but most examples involve richer countries with large populations and limited agricultural resources attempting to improve their food security by controlling land and agricultural production in poorer, less developed nations.
That’s no surprise to Robert Thompson, former director of rural development at the World Bank.
“Nothing will bring a government down faster than hungry people,” says Thompson. “I think the most important crisis occurred in 2008 when a number of exporting countries went to either taxing or banning exports, and food importers like China began to get nervous about food availability.”
He notes that when India halted rice exports in 2008, the Philippines panicked, paying exorbitant prices to lock up any available supplies of rice in the free market. “They decided they would pay any price rather than face shortages.
“If a country can’t supply its food domestically, it wants assurances that supplies will be there through thick and thin and that exporting countries will allow trade to flow,” he says.
Download your FREE Agriculture Investment and Farmland Investment Guide here
Spiking food prices in 2007-2008 and again this year “has generated more concern to get (world) agricultural development higher on the agenda. In the 1960s and 1970s it used to be a priority. In the 1980s 25% of U.S. foreign aid/year was for development. That was down to just 1% a year ago,” Thompson notes.
Not surprisingly, there’s also a good deal of opposition to the sales boom, often characterized by opponents as a “land grab.”
In Romania, the Agricultural Producers Associations League has lobbied against land sales to state-owned foreign investment funds.
Download your FREE Agriculture Investment and Farmland Investment Guide here
Brazil is preparing rules to block foreign governments, state-owned companies and speculators from buying agricultural land, although it intends to allow sales to “genuine” private investors.
Thompson notes that South Korean efforts to buy land in Madagascar were blocked when public pressure forced Madagascar’s government to cancel the deal.
There’s even a website, http://farmlandgrab.org, chronicling press reports on the issue.
In practice, sale results are mixed. Many announced deals have never been implemented, or plans have been scaled back due to everything from changing prices to inadequate infrastructure, technology and institutions. The World Bank determined that as of last September, actual farming had started on only 21% of the announced deals.
In other instances, development efforts have dislocated local farming communities, leading to instability and fueling concerns that the purchases are another form of colonialism.
Download your FREE Agriculture Investment and Farmland Investment Guide here
Source: Corn and Soybean Digest
Tuesday, 12 April 2011
FT.Com: Multi Billion Dollar asset Manager to Float in IPO
Download your FREE Agricultural Investment Guide here.
The inspiration for Ivan Glasenberg’s entry into the commodities business was distinctly humble: candle wax.
As a young accountancy student at Witwatersrand University in Johannesburg he took a course that changed his life. “I observed a man sourcing candle wax from South America and selling it to Japan. I thought, ‘that’s unbelievable’. Talking on the phone in his office, that man made money moving candle wax from one country to another’. It really interested me,” he says.
Download your FREE Agricultural Investment Guide here.
Three decades on the career launched by that youthful fascination is set to be crowned this week with the announcement of the initial public offering of Glencore, the group Mr Glasenberg now heads.
While Glencore, based in the unassuming Swiss town of Baar, near Zurich, and its chief executive may prefer a shy, retiring style, the company itself and its IPO lend themselves to superlatives.
From Baar Glencore’s senior executives marshal huge quantities of commodities such as oil, copper, coal and wheat that are vital to the global economy, and controls multibillion dollar investments in mines, oil fields and farmland.
The IPO in London and Hong Kong is set to be the largest in history for the UK market and the third largest in Europe – only the privatisations of Deutsche Telekon and Enel of Italy in the late 1990s were bigger. In the process it will transform a highly publicity shy company into a publicly listed $60bn giant, with all the attendant glare. Unsurprisingly bankers – whether involved in the deal or not – consider it the event of the year whose importance reaches beyond the capital markets.
Download your FREE Agricultural Investment Guide here.
At a time of rising commodities prices on the back of the industrialisation of high growth markets such as China and India, the listing will give Glencore’s army of 2,700 traders the financial fire-power to pursue acquisitions that until now were beyond their reach. In short, the flotation is set to trigger a new round of consolidation in the natural resources sector.
“The company has reached a stage where if it wishes to grow by acquiring more assets, the capital structure, as a private company, does not work any longer,” says Mr Glasenberg, 54, in his first interview since becoming chief executive in January 2002. “We want to set a structure that, when opportunities to buy new assets present themselves, we don’t have to walk away from them because we are not in a position to buy them.”
Download your FREE Agricultural Investment Guide here.
Source: FT.com
The inspiration for Ivan Glasenberg’s entry into the commodities business was distinctly humble: candle wax.
As a young accountancy student at Witwatersrand University in Johannesburg he took a course that changed his life. “I observed a man sourcing candle wax from South America and selling it to Japan. I thought, ‘that’s unbelievable’. Talking on the phone in his office, that man made money moving candle wax from one country to another’. It really interested me,” he says.
Download your FREE Agricultural Investment Guide here.
Three decades on the career launched by that youthful fascination is set to be crowned this week with the announcement of the initial public offering of Glencore, the group Mr Glasenberg now heads.
While Glencore, based in the unassuming Swiss town of Baar, near Zurich, and its chief executive may prefer a shy, retiring style, the company itself and its IPO lend themselves to superlatives.
From Baar Glencore’s senior executives marshal huge quantities of commodities such as oil, copper, coal and wheat that are vital to the global economy, and controls multibillion dollar investments in mines, oil fields and farmland.
The IPO in London and Hong Kong is set to be the largest in history for the UK market and the third largest in Europe – only the privatisations of Deutsche Telekon and Enel of Italy in the late 1990s were bigger. In the process it will transform a highly publicity shy company into a publicly listed $60bn giant, with all the attendant glare. Unsurprisingly bankers – whether involved in the deal or not – consider it the event of the year whose importance reaches beyond the capital markets.
Download your FREE Agricultural Investment Guide here.
At a time of rising commodities prices on the back of the industrialisation of high growth markets such as China and India, the listing will give Glencore’s army of 2,700 traders the financial fire-power to pursue acquisitions that until now were beyond their reach. In short, the flotation is set to trigger a new round of consolidation in the natural resources sector.
“The company has reached a stage where if it wishes to grow by acquiring more assets, the capital structure, as a private company, does not work any longer,” says Mr Glasenberg, 54, in his first interview since becoming chief executive in January 2002. “We want to set a structure that, when opportunities to buy new assets present themselves, we don’t have to walk away from them because we are not in a position to buy them.”
Download your FREE Agricultural Investment Guide here.
Source: FT.com
Monday, 11 April 2011
DGC Asset Management: Asset Manager Acquires Farmland Assets in Australia
Download your FREE Agricultural Investment Guide here.
SINGAPORE-based Duxton Asset Management has emerged as the $16.25 million buyer of listed Valad Property Group's seven dairy farms in Victoria.
"We are looking at growing our dairy investments around the world," said Duxton's chief investment officer Desmond Sheehy.
"We see Australia as an opportunity to invest in everything but the strength of the Australian dollar is making it a bit difficult at the moment."
Duxton, which is partly owned by Deutsche Asia Pacific, manages about 90,000 hectares of global farmland.
The group bought the dairies, from a Valad managed trust, before the latest milk price war.
Download your FREE Agricultural Investment Guide here.
Mr Sheehy told The Australian Financial Review that the purchase had proven to be a worthwhile investment despite recent price volatility.
"We purchased them at what was a good price and they have since shown to be good value investments," he said. "We think dairy is very attractive in the long term and owning the means of production is an important pillar in our strategy to increase our direct exposure to agriculture globally."
Corporate interest in dairy has been strong in recent years though the retail milk war has raised profitability concerns. Mr Bayard said Victoria was more protected from milk price fluctuations because the bulk of its product was exported.
Download your FREE Agricultural Investment Guide here.
SINGAPORE-based Duxton Asset Management has emerged as the $16.25 million buyer of listed Valad Property Group's seven dairy farms in Victoria.
"We are looking at growing our dairy investments around the world," said Duxton's chief investment officer Desmond Sheehy.
"We see Australia as an opportunity to invest in everything but the strength of the Australian dollar is making it a bit difficult at the moment."
Duxton, which is partly owned by Deutsche Asia Pacific, manages about 90,000 hectares of global farmland.
The group bought the dairies, from a Valad managed trust, before the latest milk price war.
Download your FREE Agricultural Investment Guide here.
Mr Sheehy told The Australian Financial Review that the purchase had proven to be a worthwhile investment despite recent price volatility.
"We purchased them at what was a good price and they have since shown to be good value investments," he said. "We think dairy is very attractive in the long term and owning the means of production is an important pillar in our strategy to increase our direct exposure to agriculture globally."
Corporate interest in dairy has been strong in recent years though the retail milk war has raised profitability concerns. Mr Bayard said Victoria was more protected from milk price fluctuations because the bulk of its product was exported.
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DGC Asset Managment: Corporations Grab farmland in Papua New Guinea
ABC Radio | 8 April 2011
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There is a massive land grab happening in Papua New Guinea, according to a leading Australian academic.
In a paper to be delivered at a conference in London Australian National University Associate Professor, Colin Filer, says 5 million hectares of customary land has passed into the hands of national and foreign corporations in PNG using a legal mechanism called the 'lease-lease-back scheme'.
That land amounts to 11 per cent of PNG total surface area and is twice as much has has been lost to corporate interests in 5 African countries where land aquisition is regarded as a major problem.
Presenter:Geraldine Coutts
Speaker:Associate Professor Colin Filer, Australian National University
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FILER: It's a rather complicated piece of legislation, but basically it allows the customary owners to lease land to the state and agree for the state to lease it back to a body which they approve of which could be a private company. And what we're seeing is that 5.1 million hectares, about 11 per cent of the total land area has been leased back to private companies in this way since 2003, so that's how it works. Why is it a problem? There are two aspects to the problem. One is have the customary owners really consented to this arrangement and what is actually going to be done with land? The question of what is being done with the land is basically coming down to the likelihood that most of it is going to be logged on the understanding that it will then be converted to some kind of agricultural development, but the prospect of the agricultural development seems a little bit shaky, which comes back to the question of whether the landowners knew that it would be shaky when they agreed to lease their land to the state in the first place.
COUTTS: It seems that the land is going to corporate entities, will the landowners get adequate share of the profits?
FILER: Well, possibly not, if the deal is the logging activity will fund the agricultural development, then it's quite likely that the landowners would have been persuaded if they were agreeable that they would forego the benefits they would have got from the logging in order for those benefits to be invested in the agricultural development, but if the agricultural development doesn't happen, then they might just make a loss on the whole venture.
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COUTTS: Well, under these lease backed schemes, how long are they, the leases actually fall. will the landowners lose the say in the right over their own land for how long?
FILER: In most cases, 99 years which is the maximum period allowed under the legislation as in most other countries where these kind of leasing arrangements apply. So yeah, in most cases they would have given up their rights for 99 years, but whether anybody else could actually make use of the land for 99 years through some trading arrangement in the leases, well that's a very open question. The customary owners are still sitting there in occupation of their land.
COUTTS: So what is actually driving the land grab?
FILER: Well, I think in most cases, it's simply the interest of the logging industry in getting access to additional forest resources through this mechanism when in fact their ability to access resources through the forestry act and legislation is far more constrained and there is a real pressure on them to try and get that access quickly because of the prospective decline in the market for the sort of logs that Papua New Guinea export, which are things from many sources, because it's likely to happen within the next two, three, four, five years or so.
COUTTS: How can this happen when Papua New Guinea has constitutional guarantees for customary land?
FILER: That's a very interesting question, because here I am at the conference in Europe, where everybody is saying kind of the land grab that's happening in Africa or Latin America because the state ultimately owns the land and customary rights are not protected. So Papua New Guinea is an unusual case where there is this legal protection of customary rights and yet these customary rights are being abrogated. So is it simply the total corruption of the system or is it a degree of consent from the customary owners? This is a really interesting question.
Download your FREE Agriculture Investment Guide here.
COUTTS: Well, we've talked about some of the problems of the 99 year lease and the question mark over whether there'll be other access given during that 99 years or whether the customary landowners lose it altogether. Is that the extent of the potential dangers of the lease backed scheme?
FILER: Well, look you can't, I mean there is no serious prospects of customary owners being evicted from their land under these arrangements. They are simply not going to take it. They will resist if necessary with violence, so they will continue to occupy their customary land. The real question is will the arrangements produce any benefits for them. If they don't, then they will simply ignore the arrangement and who is going to enforce the rights. I don't think that the state and its police forces are going to be capable of doing that.
COUTTS: Well, if the demand is decreasing as you suggest and the logging supplies are also running out. What's going to happen?
ASSOCIATE PROFESSOR FILER: Well, it's not that the logs are running out, it's mainly because the Chinese market for the logs which currently consumes 90 per cent of the logs that come from Papua New Guinea is by all accounts going to dry out because the Chinese themselves are investigating other ways of securing their raw materials and producing their furniture and so forth. So it's a bit like what happened with the Japanese already. So word is that the Chinese market will dry up in which case the loggers have to get their logs to the Chinese market sooner rather than later, otherwise they're won't be a market.
COUTTS: So hence, the motivation for the land grab at the moment?
FILER: Yes, I think that's the main driver of it.
Download your FREE Agriculture Investment Guide here.
COUTTS: What action should the PNG government and the landowners be taking to tackle the issue on their own behalf?
FILER: I don't see any alliance there right now. I think interesting political consolation is that the sort of key players in the current national government are allied with various logging companies and so-called development partners to push these things through and there is sort of a growing opposition which involve not only environmental NGOs, but elements of the private sector, including the existing oil palm industry in Papua New Guinea, which has interests of its own to stop this happening and also significant elements of the public service, although they are to a degree silenced by the desires of their own political masters.
Download your FREE Agriculture Investment Guide here.
Source: ABC Radio
Download your FREE Agriculture Investment Guide here.
There is a massive land grab happening in Papua New Guinea, according to a leading Australian academic.
In a paper to be delivered at a conference in London Australian National University Associate Professor, Colin Filer, says 5 million hectares of customary land has passed into the hands of national and foreign corporations in PNG using a legal mechanism called the 'lease-lease-back scheme'.
That land amounts to 11 per cent of PNG total surface area and is twice as much has has been lost to corporate interests in 5 African countries where land aquisition is regarded as a major problem.
Presenter:Geraldine Coutts
Speaker:Associate Professor Colin Filer, Australian National University
Download your FREE Agriculture Investment Guide here.
FILER: It's a rather complicated piece of legislation, but basically it allows the customary owners to lease land to the state and agree for the state to lease it back to a body which they approve of which could be a private company. And what we're seeing is that 5.1 million hectares, about 11 per cent of the total land area has been leased back to private companies in this way since 2003, so that's how it works. Why is it a problem? There are two aspects to the problem. One is have the customary owners really consented to this arrangement and what is actually going to be done with land? The question of what is being done with the land is basically coming down to the likelihood that most of it is going to be logged on the understanding that it will then be converted to some kind of agricultural development, but the prospect of the agricultural development seems a little bit shaky, which comes back to the question of whether the landowners knew that it would be shaky when they agreed to lease their land to the state in the first place.
COUTTS: It seems that the land is going to corporate entities, will the landowners get adequate share of the profits?
FILER: Well, possibly not, if the deal is the logging activity will fund the agricultural development, then it's quite likely that the landowners would have been persuaded if they were agreeable that they would forego the benefits they would have got from the logging in order for those benefits to be invested in the agricultural development, but if the agricultural development doesn't happen, then they might just make a loss on the whole venture.
Download your FREE Agriculture Investment Guide here.
COUTTS: Well, under these lease backed schemes, how long are they, the leases actually fall. will the landowners lose the say in the right over their own land for how long?
FILER: In most cases, 99 years which is the maximum period allowed under the legislation as in most other countries where these kind of leasing arrangements apply. So yeah, in most cases they would have given up their rights for 99 years, but whether anybody else could actually make use of the land for 99 years through some trading arrangement in the leases, well that's a very open question. The customary owners are still sitting there in occupation of their land.
COUTTS: So what is actually driving the land grab?
FILER: Well, I think in most cases, it's simply the interest of the logging industry in getting access to additional forest resources through this mechanism when in fact their ability to access resources through the forestry act and legislation is far more constrained and there is a real pressure on them to try and get that access quickly because of the prospective decline in the market for the sort of logs that Papua New Guinea export, which are things from many sources, because it's likely to happen within the next two, three, four, five years or so.
COUTTS: How can this happen when Papua New Guinea has constitutional guarantees for customary land?
FILER: That's a very interesting question, because here I am at the conference in Europe, where everybody is saying kind of the land grab that's happening in Africa or Latin America because the state ultimately owns the land and customary rights are not protected. So Papua New Guinea is an unusual case where there is this legal protection of customary rights and yet these customary rights are being abrogated. So is it simply the total corruption of the system or is it a degree of consent from the customary owners? This is a really interesting question.
Download your FREE Agriculture Investment Guide here.
COUTTS: Well, we've talked about some of the problems of the 99 year lease and the question mark over whether there'll be other access given during that 99 years or whether the customary landowners lose it altogether. Is that the extent of the potential dangers of the lease backed scheme?
FILER: Well, look you can't, I mean there is no serious prospects of customary owners being evicted from their land under these arrangements. They are simply not going to take it. They will resist if necessary with violence, so they will continue to occupy their customary land. The real question is will the arrangements produce any benefits for them. If they don't, then they will simply ignore the arrangement and who is going to enforce the rights. I don't think that the state and its police forces are going to be capable of doing that.
COUTTS: Well, if the demand is decreasing as you suggest and the logging supplies are also running out. What's going to happen?
ASSOCIATE PROFESSOR FILER: Well, it's not that the logs are running out, it's mainly because the Chinese market for the logs which currently consumes 90 per cent of the logs that come from Papua New Guinea is by all accounts going to dry out because the Chinese themselves are investigating other ways of securing their raw materials and producing their furniture and so forth. So it's a bit like what happened with the Japanese already. So word is that the Chinese market will dry up in which case the loggers have to get their logs to the Chinese market sooner rather than later, otherwise they're won't be a market.
COUTTS: So hence, the motivation for the land grab at the moment?
FILER: Yes, I think that's the main driver of it.
Download your FREE Agriculture Investment Guide here.
COUTTS: What action should the PNG government and the landowners be taking to tackle the issue on their own behalf?
FILER: I don't see any alliance there right now. I think interesting political consolation is that the sort of key players in the current national government are allied with various logging companies and so-called development partners to push these things through and there is sort of a growing opposition which involve not only environmental NGOs, but elements of the private sector, including the existing oil palm industry in Papua New Guinea, which has interests of its own to stop this happening and also significant elements of the public service, although they are to a degree silenced by the desires of their own political masters.
Download your FREE Agriculture Investment Guide here.
Source: ABC Radio
Friday, 8 April 2011
Farmland in Australia is Fundamentally Undervalued
Farmland in Australia is fundamentally undervalued according to local professionals.
Non-irrigated agricultural land rose in value by 2 per cent during the year compared with 10 per cent annually in the years before, according to the report. Price growth was hampered by the higher Australian dollar and rising interest rates.
Such farmland is now priced at an average of $US1600 to $1700 a hectare, The Australian Financial Review reports.
This compared with gains of 13 per cent for farmland in England, 6 per cent to 24 per cent growth in areas of Brazil and 10 per cent in parts of Argentina.
Knight Frank head of rural property research Andrew Shirley said buying farmland to address food security concerns was a key issue for countries experiencing rapid population growth, including countries such as China, India and South Korea as well as wealthy Gulf states.
Source: Farmonline
Non-irrigated agricultural land rose in value by 2 per cent during the year compared with 10 per cent annually in the years before, according to the report. Price growth was hampered by the higher Australian dollar and rising interest rates.
Such farmland is now priced at an average of $US1600 to $1700 a hectare, The Australian Financial Review reports.
This compared with gains of 13 per cent for farmland in England, 6 per cent to 24 per cent growth in areas of Brazil and 10 per cent in parts of Argentina.
Knight Frank head of rural property research Andrew Shirley said buying farmland to address food security concerns was a key issue for countries experiencing rapid population growth, including countries such as China, India and South Korea as well as wealthy Gulf states.
Source: Farmonline
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