May 15, 2009
Brazil's SLC Agricola to expand planted area on cheaper land prices
Brazilian agricultural giant SLC Agricola SA intends to expand its planted area as Brazilian land prices drop in the second and third quarters of this year, the company's CFO said Thursday (May 14).
SLC Agricola is a commodities exporter and agricultural realty that buys and leases cropland in south Brazil.
"Prices have remained stable, but now they should fall as far as 15 percent in some areas such as Mato Grosso state," Laurence Gomes told Dow Jones Newswires.
Mato Grosso state, Brazil's No. 1 soy producer, has many highly indebted farmers, and they might be forced to sell their land, pushing prices downward.
As a result, SLC Agricola is eyeing opportunities to expand in Mato Grosso state. The company is also assessing opportunities in other states in the centre-west and the northeast of Brazil.
SLC Agricola already has 220,000 hectares of planted land and is looking to buy mainly undeveloped land or to lease land to reach either 240,000 hectares; 2250,000 hectares or 270,000 hectares in 2009-10. The outcome will depend on negotiations, he said.
Gomes said that largest increase in land will be to grow soy, which offer the best margins and need lower working capital than cotton and corn, he said.
He said that a rough average price for Brazilian farm land is around US$2,000 per hectare, although prices vary widely.
SLC Agricola reported 164.7 million Brazilian reals (US$78.6 million) in net revenues in the first quarter of 2009, up 106 percent against the same period a year ago.
