China to ramp up foreign food & ag acquisitions

August 4, 2017 – AgFunder’s Emma Cosgrove writes that China is poised to have a much larger footprint in the global food supply chain in the near future, according to a new report from Rabobank. The report highlights a few of its acquisitions from the last six years that demonstrate China’s agricultural priorities and perhaps predict the role the world’s most populous country is seeking on the global agriculture stage.

walnuts China Food buys

The sense of urgency around feeding China’s 1.4 billion people has been leading to deals both private and public for the last several years. In April, Alex Zhang, cofounder and management partner of Beijing Hosen Investment Management (Hosen Capital), who has invested $300 million in food and agribusiness-related companies that are either located in China or are directly involved in meeting Chinese demand, told AgFunderNews, “The whole industry is modernizing at a speed we haven’t seen in Chinese food industry history, and if we follow a similar pattern to how the US food industry evolved in the past, we are now at the stage that we will see more and more sector consolidation. We will see more trade sales and large Chinese food companies will continue to go global,” said Zhang. “Our food industry will evolve in a similar fashion to our internet industry where four of the world’s top 10 companies are Chinese; we will probably see something similar in 10 years time in the food industry.”

The Rabobank report posits that China’s acquisitions are not simply meant to give the country more global superiority in terms of food production and ag-related holdings, but also to meet specific goals within the nation’s own food supply.

According to the report, China’s crop yields have a way to go. Yields for corn, soybeans, and wheat in China are growing at a slower rate than producers globally. For example, the report forecasts that Chinese corn production will reach 6.37 tons per hectare by 2026 while the US will each 10 tons per hectare.

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