Chinese foreign agri investment will recover says Rabobank exec

Investors are waiting for a new 5-year plan to be approved before acquiring foreign assets, Hendriks tells Reuters.

The Dutch financial services group, Rabobank, expects Chinese offshore agriculture investment to resume its previous fast pace in the coming months, according to Reuters.

According to the newswire, a recent economic slump and hesitance by state-linked groups to make investment decisions in advance of approval of China’s 13th 5-year plan have contributed to a dramatic drop in outbound agriculture investment from $14 billion in 2014 to just $1.4 billion so far this year.

Rabobank chief executive, Wilco Hendriks, predicted growing domestic demand for agricultural goods in China to drive an increase in deals following passage of the 2016-2020 five year plan. Hendriks told Reuters that foreign acquisitions by the bank’s Chinese clients would resume, despite some delays.

He added that the bank would like to expand its lending to smaller farms, which currently find financing hard to access because loans cannot be made against government land.

As previously reported by Agri Investor, private equity firms responding to growing East Asian consumer demand are influencing agri investment strategies in the US and Australia, as well as other regions.

According to the Xinhua news agency earlier this year, Chinese President Xi Jinping has indicated efforts to improve agricultural development and spur innovation in agtech will play an important part in the forthcoming government plan. China’s Going Out policy aims to internationalise the RMB, increase Chinese wealth and ensure the world’s most populous nation’s food security. Buying up foreign assets, including in agriculture and transport, is integral to the plan.