Research & Data

Norton Rose: agri investment will expand

The law firm conducted a survey of 80 professionals across the agribusiness, banking, consulting, commodity trading, food retail and not-for-profit sectors and noted the improving conditions for agri investment.

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Agricultural investment is set to expand and become more professional, according to a new survey released by law firm Norton Rose Fulbright. All 80 respondents, coming from the agribusiness, banking, consulting, commodity trading, food retail and not-for-profit sectors believe that agriculture will become more commercialised through the consolidation of major companies around the world.

“The major US food conglomerates are expected to be acquisitive, as are large Chinese companies looking to consolidate their supply chains,” reads the survey report. “Vertical integration by large multinationals, including the traders, is seen as the most likely trend, as they already have an advantage over smaller domestic producers.”

The availability of finance for the agriculture sector, from increasingly diverse sources, has also improved according to 51 percent of respondents. “

“Increasing access to diversified sources of finance is encouraging for the agri sector. Further investment and the rise in popularity of innovative products will continue to support the industry,” wrote Glenn Hall, partner at Norton Rose Fulbright, in the survey report.

Sectors which service agriculture and agribusiness are also in line for investment consideration, according to the survey as some 48 percent of respondents are considering investing into transport and other infrastructure opportunities which support agricultural production.

Price volatility has been a major talking point within investment circles in recent months. Climate change, a rise in input costs and increased consumption in emerging markets were the top three to blame for it, according to respondents.

But concerns over government regulation were nominal among respondents, although it depends on market, according to Martha Healey, head of the Canadian agribusiness practice at Norton Rose.

“The issue of price volatility is multi-faceted and has sectoral differences,” she wrote. “For example, Canadian respondents did identify protectionism/trade barriers/lack of market access as an issue which would impact price volatility.”