Coconut Markets and Start-Ups in Latin America
The food and agriculture industry represents a promising economic sector. Nevertheless, knowledge and information are the key to making educated investments and outperforming the market. For instance, farmland and agricultural real estate are currently some of the largest beneficiaries of the structural trends shaping global agribusiness markets. However, listed equities retain their attraction as a convenient way to get exposure to the food and agriculture sector. At present, both farmland real estate and listed agricultural equities combined represent more than 60% of the investment instruments used within the market. Therefore, investors in the food and agriculture sector should design an investment plan for the next one or two years in order to profit in time from the next investment wave. Likewise, the categories of venture capital and trade finance are rapidly becoming relevant on their own as both benefit from strong trends: the convergence of innovative technologies around agricultural biotech and the growing need for working capital finance – especially in emerging markets.
Investors willing to build or expand their exposure to the global agribusiness asset class will have a window of opportunity during the next twelve months to design and implement strategies, taking advantage of more attractive entry points. This requires a good understanding of the opportunities and risks across assets and geographies. Specific opportunities will arise over the next twelve months in places where a sector of the investment community is willing to exit to cash in unrealized gains or to rebalance their portfolios. In terms of private placement and venture capital investors, the option of shares within a specific agricultural project in an emerging market represents a unique opportunity for them to get to know the business sector, the emerging region itself, and capitalize from a previously untapped resource.
Coconut Markets and Start-Ups in Latin America
A large investment opportunity within agribusiness are coconuts and coconut products. Given the boom in these specific food and foodstuffs sector, demand for these products is growing at approximately 10% annually. Meanwhile, however, global coconut output is only growing at 3% yearly, particularly due to coconut and palm tree farms that are aging without being properly replaced. Nevertheless, the integration of technology and modern agricultural techniques as new palm trees are planted and coconut farms are established holds great promise and potential.
In terms of how to invest in agribusiness, Latin American governments are seeking to attract start-ups that will boost their economic competitiveness. For instance, under the Presidency of Sebastian Piñera in 2013, Chile passed the “Law of Businesses in One Day” and created the government initiative “Start-Up Chile” alongside the Chilean Association of Entrepreneurs. Efforts such as this one have been replicated in Mexico, Colombia, and Argentina, amongst others, with the goal of empowering innovators and facilitating foreign investment throughout the region. In this regard, the likely return of Sebastian Piñera to the Chilean Presidency next year would be good news for private business within the country.