Japan's big trading houses, which have enjoyed bumper years from betting on iron ore and metals, are getting into the food market, aiming to tap voracious demand in China and emerging economies.
Alarmed by exporting countries’ trade restrictions, importing countries have realised that their dependence on the international food market makes them vulnerable not only to an abrupt surge in prices but, more crucially, to an interruption in supplies.
The Chinese government is more and more worried over the control that overseas firms are exercising over a good portion of China’s food supply, and there is even some thought that the recent inflation might have been triggered by foreign food giants as they have expanded into every corner of China’s agriculture.
Small-scale farmers with limited knowledge of their rights stand to lose most as countries such as China and Saudi Arabia expand their quest for African farmland, analysts have warned.
Goldman Sachs recently invested US$300 million to acquired full control of more than 10 poultry farms in China.
As other countries have pushed their industrial bases thousands of miles offshore in search of resources and labor, China is doing the same thing with agriculture, expanding as far away as Africa in its effort to feed its people.
Chinese and Mozambican governments want to make the Zambezi Valley region of Mozambique a centre for rice production for the Chinese market, which is faced with increased consumption and less and less arable land, says researcher Loro Horta, a specialist in relations between China and Portuguese-speaking African countries.
Emerging nations are trying to cash in on the global food crisis by getting big importers of crops to effectively lease their farmlands -- a new trend that is already sparking complaints from farmers in some countries who are concerned about their own food supplies.
A senior Ministry of Agriculture official on Thursday dismissed foreign media reports about China hoarding overseas farmland, saying the country is fully capable of ensuring its own food security.
Chinese investors, who have lately gained a strong presence in Kenya’s telecoms and heavy industry, are now eyeing the country’s farmland as a source of useful raw materials and employment opportunity
China's Ministry of Agriculture (MOA) was drafting policies to encourage domestic companies to rent or buy land abroad for farming, especially for planting soy bean, the EO learned. The MOA had identified five regions, including Central Asia, Russia, Africa, Southeast Asia, and South America, for five major Chinese state-owned farming companies to invest in.
Beijing is adding agricultural investments to its “go outward” strategy, under which domestic businesses are encouraged to venture into foreign markets.
