Agribusiness

GENERAL ASPECTS OF FOOD CONSUMPTION AND AGRIBUSINESS

Nowadays we can identify three major global consumptions trends that will remain solid within the following years: food, energy and construction. 

We shall focus, in what it concerns to food concerns: general consumption worldwide and the competitive advantages that Brazil has in this global market. Globally, the human species consumes 130% of what it produces, and as long as that places a significant pressure on markets it also represents a business opportunity bound to stay accurate for the next generations. 

While we see new emerging economies heading towards new food consumption patterns, we still have countries where most of the population lies below poverty lines, therefore experiencing less per capita food intake. 

We have a total world population on the verge of reaching 7 billion, with more than 200.000 people of daily growth, and that places a high pressure on world food consumption. 

AGRIBUSINESS IN BRAZIL

Attending major consumption trends worldwide: food, energy, hardwood. 

Agribusiness fulfills the major consumption trends worldwide: food, energy and hardwood. Brazil is the country that detains the most competitive combined position when analyzed through the scope of key economic variables: markets, resources, technology, logistics and capital. Using modern technologies, Brazilian professional farmers develop highly productive Low Carbon Agriculture, integrating agriculture, cattle and forest. 

Agribusiness in Brazil is a world in itself: 388 million hectares of agricultural soil, 16 times the size of the United Kingdom, placing it as the strongest performer worldwide in food production potential: a true food basket for the world. If we just take into account the region known as MAPITOBA, there are 414.381 square kilometers (16% bigger than entire Germany) gathering the best agricultural soils from the new agribusiness frontiers in Northeast Brazilian states Maranhão, Píaui, Tocantins and Bahia.

Brazil leads the world market in seven of the main agribusiness commodities: soy, chicken, beef, cellulose, orange concentrate, sugar and coffee. It holds the biggest beef cattle herd in the world. The development level of agribusiness in Brazil represents the highest standards worldwide, holding the best productivity in Latin America and Caribbean with an average annual growth of 3.6%.

Brazil has the biggest water reserve in the world, representing 12% of the total fresh water available on earth. This scenario has been attracting foreign investors into Brazil’s agribusiness. It is estimated, that in the last decade, Direct Foreign Investment stood for 27% of the total infrastructure/equipment in the farm sector. It is common knowledge that foreign entrepreneurs/investors have their eyes on Brazil: 

  • Developed countries seek a safe market for their investments and want to be present in one of the most attractive and friendly of the emerging markets 
  • Other emerging economies, like China, find in countries like Brazil, food and energy production possibilities, they cannot find in their own countries. 

This might the only country in the world where foreigners can arrive with a simple tourist visa and have unrestricted access to a nation the size of a continent. It is also rare that such a vast region has not experienced civil war or independent quest: more than 200 million people live under one unique shared sense of patriotic nation. In this sense, Brazil remains an oasis for investors. If one does its homework and understands Brazil, overcoming challenges, and taking full use of the competitive advantages, there are few places elsewhere where you have 70 million hectares of land waiting to be sustainably planted and harvested.

Birchwood Stanhope

In addition to investment opportunities we also design tailor-made investment solutions in the form of individual mandates or specific investment strategies and their implementation.

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