China's Hunan Dakang Pasture Farming Co Ltd has bought a controlling stake in Brazilian grains company Fiagril Participações SA, the latest effort by Chinese merchants to secure future food supply in Brazil, Reuters reported at the end of April.
Sources quoted by the news agency said the Chinese firm bought a 57% stake in family-owned Fiagril, a unit of Shanghai Pengxin Group Co, in a deal worth around US$290M.
Fiagril operates grain trading and processing operations and is based in Lucas do Rio Verde, Mato Grosso state. It negotiates the purchase of soyabeans and corn directly with farmers, and also sells fertilisers and pesticides to them.
Chairman Marino Franz said in the statement that the company would be able to grow after the agreement.
The deal did not include Fiagril's shipping, biofuels and seed production businesses, Reuters said.
Asian traders have been increasing their share of export purchases of oilseed and grain in Brazil, overtaking the world’s agribusiness ABCDs (ADM, Bunge, Cargill and Louis Dreyfus) as the top buyers for the first time in 2015 (see OFI News, May 2016).
They have also been investing in infrastructure and taking market share from their Western rivals. Recent transactions include Chinese state-owned firm COFCO's purchase of controlling stakes in Dutch trader Nidera Holdings BV and Noble Group Ltd's agribusiness unit.