China, Severe Drought Not a Problem for Booming Farm Sector

Agricultural assets continue to change hands at a feverish pace with farming asset deals surging to $3.3 billion in 2018 despite the key challenges imposed by severe drought and the slowdown of Chinese economic growth.

According to the latest Colliers International Agribusiness Research and Forecast Report, which tracks the number and value of farm sales valued at $5 million or more across Australia, 254 deals above $5 million were struck in 2018, almost eclipsing 2016’s peak capital investment high.

In Queensland, the value of farmland sales surged by 60 per cent to $1 billion, while farm sales in Victoria doubled over 2018 to also hit $1 billion.

“Australian agricultural trade surplus has grown sharply for the past decade and will continue trending upwards,” Colliers International head of agribusiness Rawdon Briggs said.

“Agribusinesses is now a standalone asset class and will continue to attract investment from offshore and high net worth groups adding capital.”

Agribusiness Sales Volumes by State above $5 million

Image: Colliers International

 

The agricultural sector contributed $49 billion to exports in the year to June 2018.

Wool, dairy and horticulture contributed $4.4 billion, $3.4 billion and $2.7 billion, with greasy wool, cheese and fruit export activity growing between 10 to 25 per cent.

Industrial crop (cotton, sugar and wine) exports reached $6.6 billion for the year to June 2018, supported by the growth in wine and raw cotton exports.

“Australian agricultural trade surplus has grown sharply for the past decade and will continue trending upwards,” Briggs said.

“Agribusinesses is now a standalone asset class and will continue to attract investment from offshore and high net worth groups adding capital.”

According to the report, the standout performers in 2018 were permanent high-yielding crops such as macadamias, citrus, avocados, almonds and grapes, which benefited from rising commodity prices surging more than 30 per cent in 2018.

Read the original article here.

(Source: Ted Tabet, theurbandeveloper.com)


Facebooklinkedinmailinstagram

Comments are closed.