Agricultural Investments, in particular investments in green, sustainable projects, are attracting a lot of interest lately. Here, we take a look at the reason why.
Safety in Stormy Times
The Credit Crisis has turned even old, reputable, well financially consolidated and very professionally managed businesses into high-risk investments. Currently, the financial markets do not react as they used to do. Investing in Start-Ups via private equity creates an even bigger risk, since only very few start-up companies are likely to survive.
Imbalance in Supply and Demand
Going back to basics, and investing in fundamentals makes sense under these circumstances. The world is heading towards a population of 6.8 billion people (UN: in year 2015) who will need something to eat every day. There will always be a steady demand for basic food products. Prices may fluctuate, but there will always be a market.
Every minute of every day, 150 indi viduals are added to the world population (US Census Bureau, January 2009) and they all need food. As both the population and life expectancy grows at a fast rate, the demand for agricultural products increases rapidly.
It is highly likely that green sustainable investments in agriculture will perform extremely well in the future. We are convinced that investing in green products is a secure way to sustainable profit.
The UN conservatively predicts that the world's population will increase by more than 45% during the coming 40 years. That means that the earth will have to feed another 3,800,000,000 people.
In the same period, International Grains Council (an association of the leading food exporting countries) is predicting the farmland available for cereal production to fall by 0.2% - 0.5% per annum for the coming 40 years.
The reasons for this are several:
â¢ During Global Warming, deserts in Africa and Asia will grow and take out mill ions of hectares of potential farmland.
â¢ The attraction and trend in growing bio-fuel and other biological alternatives to fossils will reduce the farmland available for food production, including for the essentials such as wheat.
â¢ As the population gets bigger, urbanisation and town developments are being created at the expense of existing and potential farmland.
â¢ The trend has been clear during the last 5 years.
Since 2005 the production of grain has been smaller than the demand. World-wide, the development of available farmland per capita has reduced by half during the last 50 years, and further reductions are forecast.
GlobalGreenCapacity Ltd. is a leading global development and consultancy company, specialising in green investment projects in rapidly growing, emerging markets. To learn more about sustainable green investments in agriculture, visit our website: http://www.globalgreencapacity.com
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