2017 will go down in Mato Grosso history as the year that China entered Brazil Ag for the long run. Earlier in the year, China purchased an equity stake in the locally run grain trader, Fiagril. This gave the Chinese the ability to directly source soybeans, store them, and move them to ports.
Recently, Cofco has purchased two soy warehouses in northern MT and plans to build a new one in Marcelandia, MT, which is also in northern MT (opened in 2016). This is the most significant strategic move made by an international grain company in many years. China now feels comfortable with the ability for soybeans and corn to move north either via BR 163, barge, or rail in the future. They feel comfortable that the new government will be friendly towards Ag. I believe that the purchases of these soy warehouses are of extreme importance when analyzing the land market for the future. When the limit of foreign ownership of land is lifted, I think we know where China will be buying land. The new hot spots have been marked.
Agricultural Sectors I Watch
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Chinese Investments in general, but focused on Ag States.