Olive Oil

With global demand & changing consumption patterns, olive oil has grown into a $10 billion dollar industry.

Of all the agribusiness investment opportunities in Argentina and Uruguay, olive oil estates are some of the youngest and most promising. Increasingly health conscious consumers in foreign countries are stoking global demand for olive oil which has tremendous health benefits including heart disease protection and colon cancer prevention. Industry publication Olive Oil Times says Argentina has capitalized on growing demand in both aging and emerging markets like China and recent droughts in the Mediterranean to emerge as a major producer of aceite de oliva. The online magazine features an interview with Luis Feld, agribusiness expert, former president of the Terranova winery and current owner of a large olive oil estate in the Cuyo region that produces the Vero Andino product line. Even though Feld only planted his first trees five years ago, the success prompted his group to launch a company that markets and sells fractional ownership opportunities in other Cuyo-based olive oil estates. With global consumption approaching 3 million tons per year and average price per ton around US$3,600, we are talking about a roughly US$10 billion industry. In addition to annual rents of 18-20%, the group touts olive oil fractionals as “an attractive alternative for those who believe land, water and agribusiness are strategic businesses of the future.” For more information on agribusiness opportunities in Argentina and Uruguay, visit our archives or download the July 2010 edition of InvestBA Privada.

cii-godrej

Agribusiness, infrastructure and technology are just three of the Argentina/India opportunities.

While Argentina and India are still worlds apart in many respects, the 9,287-mile gap between Buenos Aires and Mumbai seemed a little less distant last week. A delegation form the City of Buenos Aires including Mayor Mauricio Macri just completed a week-long Trade Mission to India for a series of meetings with CEO’s, trade groups and government officials. Macri’s administration celebrated the arrival of Tata Consultancy Services last year, so the gobierno porteño is encouraging other Indian firms to initiate operations in the nascent Technology District. “Mr Macri also pointed to Argentina’s comparative strengths in agriculture and urged Indian firms to invest in the south American country, says Inida’s Orissadiary.  “He added that physical infrastructure development holds the key to Argentina’s growth process and invited Indian companies to consider participating in Argentina’s infrastructure projects.” At the Confederation of Indian Industry’s India-Latin America Conclave, Jyotiraditya Scindia, India’s Minister of State for Commerce & Industry, offered a message of trade escalation and diversification in the region. Scindia encouraged Indian companies to ramp up exports of manufacturing and high value-added products to “other major countries like Mexico, Argentina, Peru, Chile and Uruguay.” (The bulk of Indian exports currently go to Brazil). Agribusiness was another major theme of the Argen-India dialogue with Buenos Aires encouraging more Indian investment in the sector. A meeting between Mayor Macri and the Chairman of Godrej Industries may bear fruit in the coming year. A $1.8 billion conglomerate, Godrej is Inida’s leading manufacturer of oleochemicals.

http://investba.com/2010/01/more-rain-efficiency-mean-bumper-crop-in-ba/

Argentina soy farms like this one for sale can be found in the InvestBA Property Database.

As farmers in Argentina and Uruguay ride a wave of recovery, exports are booming and banks are poised to increase lending dramatically, according to Bloomberg. We’ve covered the bullish forecasts regarding this year’s corn and soy crops, and now it appears the banks have taken notice.  “Banco Galicia, Argentina’s second-biggest farm lender, expects agricultural loans to increase about 40 percent this year after no growth in 2009,” says Bloomberg, while “HSBC forecasts an expansion of as much as 30 percent to a record volume.” Argentine farmers are expected to produce 54.5 million metric tons of soybeans and 21.4 million tons of corn this year, annual increases of 65 percent and 69 percent from 2009. Bankers and farmers are equally optimistic given the record harvests coincide with an improving interest rate environment. Across the river, cattle farmers in Uruguay continue to fill the gap left by falling production levels in Argentina. Beef exports from Uruguay rose 27% in March to 203,465 tonnes compared to March 2009, according to Meat Trade News Daily. 40 percent of Uruguay’s beef exports went to Russia and Asia with Russia demanding 90 percent more beef and Asian markets buying 122 percent more Uruguayan beef compared to 2009. According to Ag Weekly, “the USDA increased production estimates of soybean crops from Brazil and Argentina, the world’s No. 2 and No. 3 producers, but said strong demand from China will help consume the bumper crops. “

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Buenos Aires offers excellent values like this soy farm with owner's residence for under $300,000.

London-based PropertyWire, reports on the coming surge in certain Latin American markets given the increased interest from foreign buyers and developers, many from the U.S., Europe and Asia. The real estate news service points to the recently announced trade mission by Indian developer group GIHED, and their search for opportunities and joint ventures in Argentina and Brazil. U.A.E.-based Elysian International has shown strong interest in the region, having recently acquired a 174-villa resort in Rio de Janeiro for $100 million. With over 600,000 properties in 117 countries, Elysian is no stranger to foreign development, which puts Elysian CEO Masood Naseeb’s comments in sharp context: “We are predicting a 1,000 to 7,000% appreciation on land in the region particularly in the coastal areas.” Still, Elysian’s string of acquisitions suggests their primary focus is on Brazil and, for those investor groups flush with petrodollars, the cost of Brazilian real estate doesn’t elicit as much as a blink. Yet, it’s worth noting the recent run-up in prices has the Brazilian Central Bank scrambling to create a real estate index to measure these increases. As speculative fever rises in Brazil, commercial properties in neighboring Argentina and Uruguay continue to enjoy more moderate annual appreciation, hence foreign investors are likely to find better values here. Both countries offer ample inventory of large parcels for the development of gated residential communities, suburban parcels for the construction of office parks, downtown hotel/restaurant renovation opportunities and of course vast rural estancias for the development of large-scale agribusiness projects. With the goal of bringing more of these opportunities to light, we will be launching a Google Map this week with detailed property information. If the coming surge is inevitable, we want it coming to the Tango Coast. (PropertyWire)

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