CHINESE AGRICULTURE
China is also investing heavily in places like Africa and Ukraine.
South China Morning Post reported that Xinjiang Production and Construction Corps and KSG Agro signed a 3m hectare, USD 2.6 billion deal, which would be China’s largest overseas farmland investment. And in late 2012, the Financial Times reported that China and Ukraine signed a separate deal, which would see corn supplies shipped to China at market prices, in exchange for a $3 billion line of credit from Beijing. Equilibrium Capital has also developed and continues to
explore international investment strategies, which could benefit from rising Chinese demand for protein, and nutrition more broadly. They have partnered with an Australian fund to invest in large scale livestock ranching where the end product is grass- fed cattle and sheep. Kullavanijaya talked about rice
production in Thailand,
Vietnam, Laos, and Cambodia as potential opportunities going forward. He said, these “basins are producing rice far in excess of what they can consume domestically and are natural growing places for rice.” He also talked about the competitive advantage of cheaper labour some of these countries have relative to China. And it’s not just traditional agribusiness and investors
interested in this space. Beijing-based, Legend Holdings, the parent company of computer maker Lenovo, also owns Joyvio, a blueberry and kiwi fruit producer and distributor. Other companies, which have had varying degrees of success in the agriculture industry include Chinese Internet company NetEase,
which owns a pig farm, and online web portal company, LeTV, which owns a fruit and vegetable farm in Shanxi province. Adams talked about the emergence
of new opportunities. He said, “there is demand for quality assurance, which is really virgin
China; to create a product or service that
ensures for consumers the
quality of the food supply.” China has increased output,
but it needs to continue this trend as well as look at other solutions in order to achieve higher levels of self-sufficiency and reduce the stress on the food supply chain. Although there are challenges, the opportunities both domestically in China, as well as in international markets, look promising. •
Josh Bateman,CFA, is a journalist based in Asia. He has a B.S. in
Agribusiness Management from The Pennsylvania State University.
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