The Solvent Extractors’ Association of India, a body of over 800 edible oil producing companies, is looking to buy tracts of agricultural land in South America, Africa and Myanmar.
The Solvent Extractors Association, the Indian oilseeds industry body, has formed a consortium of 18 companies to acquire 10,000 hectares of prime farmland in a $40-million deal in Uruguay and Paraguay to cultivate oilseeds and pulses. The association says they are hamstrung only by access to finance, otherwise they have it all sewn up.
India's edible oil industry, which has been trying over the past couple of years to venture into oilseeds cultivation in Paraguay and Uruguay, but could not make much headway due to high cost of finance, is charged up again to take fresh initiatives to realise the dream project.
Visit to a 2000 hectare farm in Uruguay on July 4, 2009 with Vinod Surana, CEO of Surana and Surana and leader of CII delegation from India visiting Argentina and Uruguay on June 29 - July 3, 2009
Corporate pitch from Uruguay-based private equity firm Allied Venture for Indian investors to go into outsourced agriculture in Latin America
Allied Venture promo video for Indian investors
Most of the recent farmland sales in Uruguy can be traced to money looking for safe havens, given the world financial crisis, and not necessarily increasing production.
From Kansas to Kenya, investment opportunities in a range of global farm-related ventures are increasingly drawing capital to what many players and analysts see as the early days of a burgeoning bull market in agriculture.
Pergam: "J’ai débuté mes achats de terres en 2005, en les étalant sur une période de deux ans jusqu’en 2007. La majorité des terres acquises se situe en Uruguay (35 000 hectares dont 40 % sont consacrés à la culture et 60 % à l’élevage) et les autres, en Argentine, soit 10 000 hectares. J’ai effectué ses achats au travers de la société argentine Campos orientales, l’un des plus gros propriétaires terriens du pays. La plus value latente est de l’ordre de 30 % en deux ans."
Cette partie de monopoly planétaire inquiète au plus haut niveau.
Driven by food security concerns, about 15 companies, led by the State Trading Corporation (STC), have formed a consortium to engage in corporate farming either in Paraguay or Uruguay. Among other notable firms that have joined the consortium are Gujarat Ambuja, Ruchi Soya Industries and Jhunjhunwala Vanaspati Ltd.
As with timberland, while direct ownership and management (i.e., being a farmer), is a possibility, such a route is similarly fraught with difficulties. One of the most significant of these is the issue of diversification in the farmland itself - especially with a single investment. A well-diversified holding of farmland (row crop, permanent crop, pasture and even timber) will, therefore, not only require a significant investment, but may also involve land holdings in a number of different locations.
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