segunda-feira, 25 de junho de 2007

The Brazilian agricultural boom

Brazil has about the size of the US (not counting Alaska), and about 185 million consumers – which makes it the fifth or sixth largest market worldwide for a lot of consumer products.
It has for centuries been exploited by colonial powers as a cheap farming ground for sugar, coffee, soy, and cattle.
Exports, however, have often been limited because of protectionist measures by Europe and the US, who have been know to use subsidies and trade barriers to protect their farmers from the – inevitably – cheaper production from the developing countries.
Until the nineties, Brazil was seen, however, as a volatile, high-risk economy, with sky high inflation rates and unpredictable political swings.
Over the last ten years, however, Brazil has proven to be in control of its economy, with slow but continuous growth and low inflation. Financial markets have been the first to catch on and the 'country risk' of Brazil has dropped to no more than 150 points in 2007 – meaning an investment in Brazil should generate only 1.5% more return than in the 'first world' in order to compensate for it's risk.
As a result, money is continuously flowing into Brazil and its currency is not only stable but actually gaining strength year after year. Investments into the stock market were the first to start the flow, but since 2005 also direct investments – in industry and agriculture – have started to rise significantly.
Also, the West has – finally – discovered ethanol as a cheap, environmental and politically safe alternative to petroleum. The Brazilian technology to produce ethanol from sugar cane is cheaper than the corn-based technology used in the US and Australia.
Also here, the numbers are impressive - if one calculates the amount of sugar cane plantations necessary to supply the Brazilian, US, or Japanese markets with alcohol, even to replace just a part of their petroleum consumption by alcohol, it quickly becomes clear that demand will rise to unimaginable proportions in a few years' time.
While the movement has already started, the agricultural boom in Brazil is just taking off – and those investing now will not only benefit from strong immediate returns, but also from strong valuation increases over the next decade.

Um comentário:

bignon disse...

merci de m'envoyer plus d'infos, je travaille avec INTERFEL en France, qui est le syndicat des producteurs de fruits et légumes