Agribusiness to Argentina
(Last updated: 10 Jun 2011)
Trends and opportunities
The market
Agribusiness strategy 2010-2011
Austrade strategy over the next three years will be to advance Australia’s commercial interest at a trade and investment level in Argentina, Uruguay and Paraguay. The agribusiness network will:
- Implement an outward investment plan to respond to climate change and maintain and enhance the productivity and international competitiveness of Australian agriculture.
- Build business opportunities for the promotion of agricultural technologies, products and services.
Given the projected changes in key global and regional climate variables, one of the key sectors vulnerable to climate change is agriculture, both in Australia and globally. Changes in water availability, water quality, temperatures and pests and diseases are all likely to have an impact on agricultural productivity.
In Australia, projected higher temperatures and lower rainfall followed by extreme events such as flooding and droughts are expected to reduce agricultural production and productivity by decreasing crop yields and increasing stock losses.
Changes in temperatures are also projected to alter the incidence and occurrence of pest and diseases. Future climate changes and associated declines in agricultural productivity and global economic activity may affect global production of key commodities – for example, global wheat, beef, dairy and sugar production. Furthermore, Australian production of these commodities could decline by an estimated 9-10 per cent by 2030 and 13-19 per cent by 2050.
These changes would also have significant implications for international agricultural trade. For example, Australian agricultural exports of key commodities are projected to decline by 11-63 per cent by 2030 and by 15-79 per cent by 2050. Australia is projected to be one of the most adversely affected regions from future changes in climate in terms of reductions on agricultural production and exports. (Source: ABARE 2007, ‘Climate Change: Impacts on Australian Agriculture’ ).
Outward Investment Plan: a response to challenges imposed by climate change to Australian agriculture
In order to respond to climate change and food security in a capable manner and maintain and enhance the productivity and international competitiveness of Australia agriculture industries we consider that Latin America has a very important role to play as strategic partner of Australia in the agricultural industry, especially Argentina, Brazil, Uruguay and Paraguay.
Latin America is a region that has been blessed by favourable weather and soil creating an ideal environment for crops and livestock. Brazil’s endowment of arable land, for example, is a whopping 4,100,000 sq km (roughly the size of the European Union) only 17 per cent of it now in use. Argentina, for its part, has 1,700,000 sq km of available farmland, and its pampas boasts 760,000 sq km of the world’s most fertile farmland and pastures. Such natural blessing, coupled with low labour cost, help explain that agribusiness in both Argentina and Brazil are rightly bullish about the future, giving the glowing outlook for demand, their strong competitive position, and their enviable production advantages. (Source: The McKinsey Quarterly ‘Harvesting Latin America’s agribusiness opportunity’ available at www.mckinseyquartely.com).
An entrenched tendency to view the region as nothing more than a competitor for Australia’s export markets continues to prevent Australian agribusiness from seeing what countries such as New Zealand and Canada have known for years – that Latin America is shaping up as the new agricultural powerhouse of the world. (Source: Beyond Competition – the case for collaboration. Australian Agriculture and Latin America. Report produced by Telmo Languiller, MP Member for Derrimut & Parliamentary Secretary for Human Services).
Opportunities
Austrade has identified the following investment opportunities in the agricultural markets of Brazil, Argentina, Uruguay and Paraguay. Austrade will assist Australian producers to secure new points of production to grow customers in global markets.
Current/emerging investment opportunities:
- Grain production (wheat, corn, etc)
- Oilseed production (soy, sunflower, etc)
- Livestock breeding and fattening (particular focus on cattle, poultry and swine)
- Dairy production
- Forest industries
- Wine production
Austrade has identified the following agricultural areas to proactive focus in the region. Over 180 Australian companies who worked with Austrade in Latin America during the last two years generated business in these sub-sectors:
- Animal genetics: beef and dairy genetics, sheep and goat genetics and live stud animals
- Animal science technology
- Pasture seeds (legume, vegetable and pulse seeds)
- Irrigation equipment and technology
- Wine technology
- Dairy equipment
- Abattoir technology
- Software and equipment for airborne remote sensing imaginary for vegetation mapping and monitoring projects
- Traceability systems
- Agricultural services
- Water technologies
- Food processing machinery
Geographic priorities
To maximise opportunities to Australian business in Latin America, Austrade’s proactive focus will be in:
- Argentina – very high interest in improving the yield activities particularly in relation to animal genetics and agricultural science, off-shoring agricultural production and agricultural services.
- Brazil – single largest market within the region representing opportunities for investment in agriculture, biofuels – especially ethanol; aquaculture – especially tropical fisheries, algae, forestry and livestock.
- Uruguay – the home of various Australian agricultural commodity trade firms. Very important market for dairy and livestock investment and production.
Links and industry contacts
Agribusiness–related resources
Although most of the information is in Spanish, these agribusiness portals contain relevant information and links:
Agritotal – www.agritotal.com.ar
Expoagro – www.expoagro.com.ar
Government, business and trade resources for Argentina
Ministry of Economy and Production – http://noticias.mecon.gob.ar/
Argentine Secretary of Agriculture, Cattle and Fisheries – www.minagri.gob.ar/site/index.php
National Secretary of Animal Health – www.senasa.gov.ar
National Institute of Industrial Technology – www.inti.gov.ar
Contact details
The Australian Trade Commission – Austrade – is the Australian Government’s trade, investment and education promotion agency.
Through a global network of offices, Austrade assists Australian companies to grow their international business, attracts productive foreign direct investment into Australia and promotes Australia’s education sector internationally.
For more information on how Austrade can assist you, contact us on:
Australia ph: 13 28 78 | Email: info@austrade.gov.au
A list of Austrade offices (in alphabetical order of country) is also available.