Rabobank report: China's increasing investments in South American agribusiness
Rabobank press release | 28.07.2011

Rabobank report: China's increasing investments in South American agribusiness
NEW YORK, July 28, 2011 /PRNewswire/ -- A new report by Rabobank's Food & Agribusiness Research and Advisory (FAR) department examines the exponential rise of Chinese investments in South America, particularly in Brazilian and Argentine agribusiness.

Highlights of the report, released today, include:
Furthermore, the Rabobank report details:

China's increasing investment in South American agriculture reflects a combination of factors

The volume of investment projects by Chinese companies in South America has been expanding exponentially since 2007. Brazil in particular provides an enormous potential market for Chinese exports, and has historically been a key partner for China in the energy, manufacturing, and other sectors.

China's investment rationale: agricultural production and logistical infrastructure

China is aiming to secure the supply of agricultural products, especially grains and oilseeds, as it cannot meet its own demand for them.  Several agriculture-related deals in South America – including its large concentration of soybean production and vast quantity of available land and water resources – address China's food industry needs.

China's entry strategy: from direct land access to a 'leasing' scheme

Banned from buying land outright, Chinese investors have changed their model to one in which deals are structured as infrastructure investments in exchange for crop offtake, rather than direct investment into farmland.

Flow of deals in South America, particularly in Brazil, expected to continue

China has an ongoing need to secure soybean and corn supplies that matches well with South America's productive strengths. With grain stocks at historically low levels, the world will continue to look to South America for incremental production. Brazil has more resources that could be put into crop production than any other country in the world.
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