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Saudi to invest over US$11bn in farmland projects

Saudi Arabia has invested around 40 billion riyals (US$11bn) in agricultural and livestock projects in the Ukraine, Brazil, Argentina, Canada and Sudan, it was reported.

The projects in the Ukraine, Brazil, Argentina and Canada were announced by Eid al-Ma’arik, the chairman of the agricultural investment committee at the Saudi Council of Chambers, according to Al-Watan newspaper.

The Asharq Al-Awsat newspaper also reported that Fahd Balghunaim, the Saudi agriculture minister, had signed an agreement to increase its investment in agricultural land in Sudan.

Balghunaim said earlier this year the kingdom was encouraging Saudi companies to invest in farms in Africa as it seeks to secure supplies of food imports to replace local production.

Related Post: Economic disaster beckons as water-hungry investors buy up Africa’s land

The government decided in 2008 to gradually phase out all water-intensive crops including grains by 2016 amid commodity price spikes, Balghunaim said at a World Economic Forum meeting in Addis Ababa, Ethiopia’s capital.

Saudi Arabia plans to increase imports of food, including the 3 million metric tonnes of wheat consumed annually, he said.
“Africa is the region that represents the biggest opportunity to increase food production with vast tracts of land and a big difference between existing potential and current productivity,” he said.

“Saudi companies are bringing the technology and equipment to help increase production.”

In Ethiopia, Saudi Star Agricultural Development, a food company owned by billionaire Mohammed al-Amoudi, announced last year it plans to invest $2.5bn by 2020 developing a rice-farming project on 10,000 hectares of land on lease for 60 years.

It also has plans to rent an additional 290,000 hectares from the government.

Critics of the project including GRAIN, the Barcelona-based advocacy group, argue that domestic farmers are being dispossessed and the country shouldn’t rent land cheaply to foreign investors to grow crops when about 13 percent of its approximately 80 million people still rely on food aid.

“We want to be an assisting player in the African agriculture revolution,” said Balghunaim. “Our ethics don’t allow us to take food from the mouths of people who need it.”

African nations should be able to end their dependency on food imports, become net crop exporters and cut trade deficits by adopting modern farm methods, Balghunaim said.

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Brazil: Wind Could Be Second Largest Power Generation Source by 2015

Brazil is making a serious entrance into the global wind power market.  Based on new government energy plans, in a few short years, wind could become the second largest power generation source in the country.

The Brazilian government plans to boost installed wind capacity to 11.5GW by 2020 – a significant increase from the 1.5GW installed today.  A series of auctions will open 6GW worth of wind farm opportunities to the global marketplace by 2015.

To encourage sector growth, the government will offer tax breaks and cheaper financing rates to wind developers, a fact which has not been lost on global wind giants Gamesa, Iberdrola, Vestas and Alstom, all of whom have professed a strong interest in Brazilian wind investments.  Brazil’s plans are so aggressive that wind may very well leap ahead of natural gas to become the country’s second largest source of power generation, following hydroelectric power, by 2015.

Cost reductions as a result of technology developments have made wind’s future particularly rosy in Brazil.  Data shows it is now 70% cheaper to build a wind farm in Brazil than it was 7 years ago. Brazil is now able to invest in the industry at a level which did not make economic sense in the past.

“In Brazil we have large renewable resources, first hydro and then wind and biomass so we prefer to invest in sources that bring good power prices to consumers,” remarked Elbia Melo, CEO of the Brazilian Windpower Association. “The government wants consumers to get the best power price, and they can definitely do this with wind now.”

Brazil has become the “world’s most coveted wind power market,” says Melo.  “China purchases everything it needs to build its own farms domestically while India buys from China, so European and U.S. developers are left with Brazil as the only real viable market.”

Read the full article here

Read additional posts on wind power here

 
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Posted by on November 29, 2011 in Clean Energy, Policy, Wind

 

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Brazillian Ethanol Industry Readies for Growth

Brazil is the largest ethanol exporter in the world, and is second only to the United States in terms of production.   The industry is on the cusp of major growth.

Brazil biofuel largely comes from sugarcane, a more efficient fuel source than the corn used in the United States.  Sugarcane is widely considered to be the best of the alternative transportation fuels commercially produced today.

Major corporations have increased their interest in Brazilian sugarcane ethanol production  in recent years.  Shell, for example, launched a $12 billion biofuels joint venture with Brazilian firm Cosan last month.  The new firm, Raizen, will merge ethanol, sugar and conventional fuel divisions and will be the fifth largest company in Brazil in terms of revenue.

“Shell got involved because it believes the amount of energy needed by the world is not going to be possible just by [relying on] fossil fuels… and the motivation for Cosan was to transform sugarcane ethanol into an international commodity,” explained Raizan’s new CEO, Vasco Dias.

Domestic demand for ethanol is very high in Brazil, where 86% of all vehicles will be “flex-fuel” by the year 2020.  “Flex-fuel” vehicles are able to operate on gasoline, ethanol, or any mixture of the two.  In 2010, 54.2% of all sugarcane was used to produce ethanol, and that percentage is predicted to rise to 68.5% by 2020.

The U.S. political decision to repeal $6 billion in ethanol subsidies and remove a $0.54 per gallon tariff import tax on ethanol was welcome news to the Brazilian ethanol industry which anticipates market growth as a result.  Indeed, the outlook for sugarcane ethanol is so positive that the Brazilian government  reportedly changed its legal status from an agricultural commodity to a “strategic fuel.”

Although China and Russia have accused Brazilian ethanol policies of driving up the cost of sugar to 30 year highs, Brazil disputes these claims and furthermore says it can increase production of sugar and ethanol without resorting to land clearing, which is a major contributor to  climate change.

 

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China, India & Brazil Lead as Global Auto Sales Trend Higher

High demand keeps global auto sales on the rise even as gasoline prices trend higher.

According to the April 2011 Short-Term Energy and Summer Fuels Outlook released by the U.S. Energy Information Administration (EIA), American drivers can expect to pay an average $3.86 per gallon during the 2011 driving season with a peak of $3.91 per gallon by mid-summer.

As a result, there has been renewed consumer enthusiasm for electric and high-mileage vehicles in the United States, with President Obama reporting that the U.S. is on track to achieve its goal of 1 million electric vehicles on the road by 2015.

Although increasing gasoline costs are having an effect on the average American consumer, the effect has not been translated as severely to other parts of the world, where vehicle ownership is still on the rise.  Sales of cars and light trucks is increasing rapidly in the world’s fast growing nations like China, India and Brazil.

During the month of March, Chinese vehicle sales rose 5.4% from March 2010 levels, to 1.82 million.  From March 2009 to March 2010, vehicle sales rose by 25%.  In India, vehicle sales as of March 2011 rose 30% on the year to 1.98 million.  Brazil’s Q1 sales of cars and light vehicles rose 4.7% to 852,000.  Auto sales in Turkey rose 76% to 181,631 vehicles during Q1, and Indonesia reported a 25.2% increase from the year before.

In many instances, these numbers represent first time auto purchases, as opposed to vehicles bought to replace older models.  If purchasing trends continue as expected, the total number of active vehicles on the world’s roads will increase sharply, and will undoubtedly affect global patterns of petroleum demand.  Read more…

 

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How to feed the world ? Copy Brazil

For many years we have been studying the rapidly deteriorating food shortages across the world and have been actively investing in this up and coming sector.

In August 2010 we posted a fascinating report on the Brazilian Cerrado

Over the summer I read a fascinating article in the Economist on how  one country which was then a large net food importer decided to change the way it farmed. Driven partly by fear that it would not be able to import enough food, it decided to expand domestic production through scientific research, not subsidies. Instead of trying to protect farmers from international competition—as much of the world still does—it opened up to trade and let inefficient farms go to the wall. This was all the more remarkable because most of the country was then regarded as unfit for agricultural production.

The country was Brazil. In the four decades since, it has become the first tropical agricultural giant and the first to challenge the dominance of the “big five” food exporters (America, Canada, Australia, Argentina and the European Union).

Interested ? – read the entire article here – its well worth the time

Click here to read an in-depth study entitled “How to feed the world in 2050”

 

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Brazilian Agriculture : The miracle of the cerrado

Brazil has revolutionised its own farms. Can it do the same for others?

The increase in Brazil’s farm production has been stunning. Between 1996 and 2006 the total value of the country’s crops rose from 23 billion reais ($23 billion) to 108 billion reais, or 365%. Brazil increased its beef exports tenfold in a decade, overtaking Australia as the world’s largest exporter. It has the world’s largest cattle herd after India’s. It is also the world’s largest exporter of poultry, sugar cane and ethanol (see chart). Since 1990 its soyabean output has risen from barely 15m tonnes to over 60m. Brazil accounts for about a third of world soyabean exports, second only to America. In 1994 Brazil’s soyabean exports were one-seventh of America’s; now they are six-sevenths. Moreover, Brazil supplies a quarter of the world’s soyabean trade on just 6% of the country’s arable land.

No less astonishingly, Brazil has done all this without much government subsidy. According to the Organisation for Economic Co-operation and Development (OECD), state support accounted for 5.7% of total farm income in Brazil during 2005-07. That compares with 12% in America, 26% for the OECD average and 29% in the European Union. And Brazil has done it without deforesting the Amazon (though that has happened for other reasons). The great expansion of farmland has taken place 1,000km from the jungle.

How did the country manage this astonishing transformation? The answer to that matters not only to Brazil but also to the rest of the world.

Read the entire article here (The Economist)

 

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