Agriculture is a key business sector in Latin America, especially in South America where you have Argentina and Brazil, the real powerhouses of agribusiness sector and to a lesser extent Bolivia, Colombia, Paraguay and Uruguay. Agribusiness has been one of the few sectors where money has been made during the Great Recession. But to profit from agribusiness, you have to know what is happening on the ground, i.e., rain in the Pampa vs. drought in Mato Grosso or riots in Brazil during harvest time.. Brazil’s agribusiness is now under pressure due to higher than expected taxes to cover a growing budget gap that are the key reason for the recent riots. Combine this with a now slowing economy and add in poor infrastructure and you have a yellow caution light going off. Plus an overvalued Real and government imposed salary increases? Yes, Brazil is going to be the world’s leader in soybean exports but at what cost? Yields are not what they are in Argentina at 4-6 metric tons a hectare along the Pergamino to Rio Cuarto corridor on Ruta 8. The difference is Brazil has more land to grow soya and more subsidies from the government for soya farmers. However that might be in jeopardy because of slower GDP growth. If you are interested in Agro business you should be subscribing to our confidential mail outs so you are first to know of any changes or opportunities. gatewaytosouthamerica-newsblog/
Posted on: Thu, 25 Jul 2013 14:04:40 +0000
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