Agricultural Investments, especially investments in green, sustainable projects, are attracting a great deal of interest lately. Here, we check out the reason why.
Safety in Stormy Times
The financing Crisis has turned even old, reputable, well financially consolidated and very professionally managed businesses into high-risk investments. Currently, the real estate markets do not react while they used to do. Investing in Start-Ups via private equity finance creates an even bigger risk, since only very few start-up companies are likely to survive.
Imbalance in Demand and supply
Going back to basics, and investing in fundamentals makes sense in these situations. The world is heading perfectly into a population of 6.8 billion people (UN: in year 2015) which will need something to consume every day. There will always be a stable demand for basic foods. Prices may fluctuate, but there's always a market.
Every minute of each day, 150 people are added to the world population (US Census Bureau, January 2009) and they all need food. As the population and endurance grows at a fast rate, the interest in agricultural products increases rapidly.
It is highly likely that green sustainable investments in agriculture will conduct extremely well in the future. We have been convinced that investing in green products is a secure way to sustainable profit.
The UN conservatively predicts the world's population raises by more than 45% through the coming 40 years. Which means that the earth will have to feed another 3,800,000,000 people.
In the same period, International Grains Council (a connection of the leading food exporting countries) is predicting the farmland available for cereal production to fall by 0.2% - 0.5% yearly for the coming 40 years.
The reasons for this are several:
• During Global Warming, deserts in Africa and Asia will grow and take out millions of hectares of potential farmland.
• The attraction and trend in growing bio-fuel as well as other biological alternatives to fossils will reduce the farmland available for food production, including to the essentials such as wheat.
• As the population gets bigger, urbanisation and city developments are being created at the expense of existing and potential farmland.
• The popularity has been clear over the past 5 years.
Since 2005 producing grain has been smaller than the demand. World-wide, the creation of available farmland per capita has reduced by half throughout the last 50 years, and further reductions are forecast.