O Agribusiness in Brazil it is increasingly unattainable, being recognized as one of the powers of our country, reaching the Brazilian GDP with around 27.4%.
It's not news to anyone how important this sector has been for the Brazilian economy for many years. However, cultivating a piece of land with crops is not that simple.
This is due to several factors, such as adequate sun, fertilizers, rain, luck and of course money. As a result, many people often wonder whether investing in agribusiness is really worth it.
Therefore, if you want to know more information about investments in Agribusiness, continue reading the article below.
What is Agribusiness?
Well, before we delve deeper into investments, it is interesting to know more about what Agribusiness itself is.
Agribusiness in short is the set of agricultural and industrial activities on the way from the field to the final consumer. The word originates from English with the word “Agribusiness”, having the same meaning as in our country.
Currently, Agribusiness is among the largest job generators in the world, and is also recognized as one of the most profitable activities.
In the last 25 years, according to the Ministry of Agriculture, Livestock and Supply (MAPA), the planted area grew by around 53% and production by 260% with productivity of 135%.
The products with the highest value in Agribusiness in Brazil are:
- Rice;
- Soy complex (grain, oil and bran);
- Bean;
- Cotton down;
- Corn;
- Orange;
- Coffee;
- Meat;
- Sugar;
- Paper;
- Cellulose.
The increase in Commodities (Raw Material)
Initially, the word “Commodity” means merchandise, however, a few years ago this same word began to be used to refer to raw material products.
The interests of investors began, mainly, from the soaring prices of commodities (raw materials). According to the United Nations Food and Agriculture Organization's monthly report, the food price index remained 22.8% higher in May 2022 compared to May 2021.
This is due to reasons such as the War between Russia and Ukraine, the heat wave in India, drought in southern Brazil and the rise in the price of fertilizers and agricultural inputs.
Thus, this scenario gave investors an opportunity to change their careers and invest in a growing sector with very attractive prices.
How to invest in Brazilian Agribusiness in practice?
Until some time ago, individual investors were able to invest in agribusiness through bank LCAs or CRAs.
Currently, there are other options that allow you to invest in agricultural-related products with little money, without having to be present there.
In variable income, one of the most direct ways to invest in agribusiness is through the acquisition of shares in companies that already operate in this field, many of which have entered the traditional market through the stock exchange.
In 2021, a new way of investing caught the attention of buyers: Fiagro. Its operation is similar to FIIs, a fund that invests in agroindustry production chains, with properties linked directly to the sector or the activity itself.
Recently, in May 2022, B3 created the IAGRO B3 index, the first Brazilian index with 32 shares of companies linked to the sector.
Currently, it is possible for investors to buy agricultural ETFs with AGRI11, from Banco do Brasil and also BTRA11 and BTALL11 from BTG Pactual.
Are there risks in investing in Agribusiness?
As already mentioned, agriculture is the most essential sector of the economy in the world. Much of Agro is just food. And in a society like this, food is extremely important.
However, agriculture is not just that, it produces energy, fibers, and all essential sectors. Since the tropicalization of cultivation and agriculture techniques, which were designed for temperate countries but were more developed, agribusiness has been growing increasingly and feeding around 10% of the world's population.
Therefore, it is a high-risk sector, mainly due to the fact that it is an open-pit industry, but producers have learned very well to deal with this risk.
This way, with a lot of research and study on the best methods and strategies you can achieve success in an investment in agribusiness.