InvestIdeas

China considers buying land overseas to secure food supply - report

BEIJING (XFN-ASIA) - The Chinese government may encourage domestic companies to buy farmland abroad, particularly in Africa and South America, to help guarantee food security, the Financial Times reported.

Beijing has similar policies to boost offshore investment by state-owned banks, manufacturers and oil companies, but agricultural investment has been limited to a few small projects, the newspaper noted.

Citing an official close to the deliberations, the newspaper said the proposal was likely to be adopted. If approved, however, it could face intense international opposition because of surging global food prices and deforestation fears, the newspaper added.

"There should be no problem for this policy to be approved. The problem might come from foreign governments who are unwilling to give up large areas of land," the newspaper quoted the official as saying.

China has about 40 pct of the world's farmers but just nine pct of the world's arable land, according to the newspaper.

Soybean, bananas, vegetables and edible oil crops would be the focus of policy support for Chinese companies buying land overseas, the newspaper added.

Source: XFN-Asia

Meanwhile, in the offices of hedge funds, pension funds and investment firms, a feverish search for the next big thing is already underway. Conservative investments -- concrete things that cannot go up in smoke as easily as a futures contract on the Chicago and New York exchanges -- are suddenly back in vogue.

In keeping with the new trend, hedge funds and investment banks have started buying up farms worldwide. Morgan Stanley, for example, already owns several thousands of hectares of agricultural land in Ukraine. An agriculture fund operated by Blackrock, a New York investment group, acquired more than 1,100 hectares (2,717 acres) in Britain's Norfolk County. Others are combing the world, from Russia to South America, for investment opportunities. In Argentina, prices for the most productive fields have increased by 80 percent in recent years.

The British hedge fund Emergent Asset Management is currently collecting €1 billion ($1.55 billion) to buy up African farmland south of the Sahara Desert.

"Hedge fund managers may not be good farmers," says Paul Christie, Emergent's marketing chief, "but with the right partners they can be good farm managers."

Juz TOL, will Cambodia (large land mass with only 5 million compared to Vietnam with 72 million) be in Wilmar's radar soon?? Temasek's radar?? Problem is maybe the uncleared landmines in the Northern part of the country.

What abt downunder NZ??

LenaHuat wrote:

Juz TOL, will Cambodia (large land mass with only 5 million compared to Vietnam with 72 million) be in Wilmar's radar soon?? Temasek's radar?? Problem is maybe the uncleared landmines in the Northern part of the country.

That's perhaps one good thing - finally there'll be motivation to put more money and effort into clearing those mines faster. Not sure if the locals benefit in the end though, like, yeah the land's safe, but not owned by them....

Another interesting article from The Independent :

Russian land boom could avert global famine
Last Updated: 9:18am BST 20/06/2008

Across a great arc of the Eurasian steppe from Ukraine through Russia to Kazakhstan lies enough arable land to feed the world for years to come, with spare for biofuels to help plug the energy gap.

In the days of Nikita Khrushchev - a great enthusiast for the vast Sovkhoz collectives - the Soviet Union farmed 240m hectares, badly. The same territory now farms 207m hectares. These reserves of idle soil are alone enough to meet the entire global need of 30m extra hectares over the next decade, as estimated by the UN's Food and Agriculture Organization (FAO).

The Moscow investment bank Troika Dialog says that just 43pc of the arable land in Russia is cultivated. Crop yields in the trio of leading ex-Soviet states remain at pre-modern levels. Yields can be doubled in Russia, and tripled in the Ukraine using modern kit and know-how. "The potential is tremendous," said Kingsmill Bond, Troika's chief strategist.

The great leap forward may at last be underway as the clutter of Soviet-era restrictions are broken down and Russia's new found wealth pours into high-tech farm investment. It comes in the nick of time. World corn prices are flirting with the once unthinkable level of $8 a bushel - up fivefold in little over two years. This has lifted the entire nexus of grains in its wake as farmers switch to corn. Soybeans are up 84pc in the past year.

Troika Dialog has written a detailed report - "The New Frontier" - to guide western investors through the Slav land boom and on how to play the opportunities on both the Moscow bourse (for the brave) and European stock exchanges (for the timid).

The message is simple. Buy those who control the "bottlenecks" between the land and the market: the processors, the logistics firms, the shippers and movers, the silo makers and fertilizer companies................................................
...............................................

yeah man.... one day, one day, i may explore... opening up a row of drinking holes and entertainment joints + hotels for the weary travellers...along some remote parts of the "silk route"..... and i throw in the camel cigarettes, for aesthetics...

some more recreate the historical commercial pilgrimage of the mideasterns and chinese...

Hi K - U are, I think, far too young to recall those Russian sailors who used to call port at Collyer Quay. Mine, there were lots of drinking holes and barter-trade shops then who did a very lucrative trade with the Russian sailors - liquor, cameras, American cigarettes........Cannot recall if there were Russian-speaking 'fast' girls

It's inevitable that the world will have to deal with the Russians for the next 20-30 years.

hi L : u r right...i most certainly did not see those russian sailors calling port at collyer quay....
your wealth of experiences, will benefit us all with your postings... большое спасибо (many thanks)

LenaHuat wrote:Hi K - U are, I think, far too young to recall those Russian sailors who used to call port at Collyer Quay. Mine, there were lots of drinking holes and barter-trade shops then who did a very lucrative trade with the Russian sailors - liquor, cameras, American cigarettes........Cannot recall if there were Russian-speaking 'fast' girls

It's inevitable that the world will have to deal with the Russians for the next 20-30 years.

Lena,

What are you talking about??? We both from the same era leh, with same taste in Chinese songs...

Spasiba... (same as thank you in Russian... I can only recall the few words I learnt while living in Russia and how they sound like... the most important one is of course GeDE Tualet?? (where is the toilet? )

Cheers,
mm

From Russian Thread; Posted on May 23, 2008

From Russia Today:-
China eyes Russian farmlands in food push

Chinese companies will be encouraged to buy, or take on lease, farmlands abroad to help guarantee food security, under a plan being considered by Beijing. The move comes amid a food crisis in China.

China has about 40 per cent of the world’s farmers, but just 9 per cent of the world’s arable land.

Africa and South America are among the most likely directions. Russia’s also in the list. However, according to the country’s constitution, foreign companies aren’t allowed to buy Russian land, though still possible to lease.

Acquiring farmlands abroad is now becoming a trend around the globe. Oil-rich but food-poor countries in the Middle East and North Africa explore similar options. Libya is now in talks with Ukraine about growing wheat in the former Soviet republic, while Saudi Arabia says it will invest in agricultural and livestock projects abroad to ensure food security and control commodity prices.

Source: Russia Today

MM - Spasiba :! for your kind words abt us being of the same gen. Ha. ha: I'm impressed that U've lived in Russia b4??

K - To and From Russia with Luuv indeed I think more Russian words will be creeping into our vocabulary soon (last heard of were 'perestroika' and 'glasnot').

In the first posting of this thread, I wrote this:

Juz TOL, will Cambodia (large land mass with only 5 million compared to Vietnam with 72 million) be in Wilmar's radar soon?? Temasek's radar?? Problem is maybe the uncleared landmines in the Northern part of the country.

Presto, 2day's SGX announcement on a small cap HLH is abt farmland in Cambodia:

HLH to invest US$6.5 mln in Cambodia agri-business

HLH Group Limited said its subsidiary, HLH Agri International Pte Ltd, has incorporated a unit in Cambodia to invest in integrated agri-business operations.

The unit, H.L.H.I. (Cambodia) Company Limited (HLHI), will invest US$6.5 million to buy 1,791 hectares of freehold land located in Amlang Commune, Thpong District, Kampong Speu, Cambodia.

The company expects to start land clearing and cultivating activities in the fourth quarter 2008.

Of the US$6.5 million, US$3 million will be used to buy the land and US$3.5 million will be used for capital expenditure and working capital.

The project will be fund via internal funds and borrowings from financial institutions.

It's : To Hun Sen with Luuv too.