GRI 2.10

The world population increases by 1.7% per annum and this growth occurs mostly in the emerging economies where incomes are increasing the fastest. Consequently the demand for food is growing. The Food and Agricultural Policy Research Institute (FAO) estimates that food production will increase by 40% to 2030 and more than 70% to 2050, a scenario of solid fundamentals which offers grounds for optimist in relation to the international soybean market.

Additionally, the Brazilian economic climate has been very favourable to agribusiness in the past years, notwithstanding the ripples of the international financial crisis. In 2011 the domestic economy benefitted from low unemployment rate (4.7%), increase in workers’ real incomes (2.7%) and increase in consumption fueled by easy credit.

In this context, Algar Agro’s outlook is very positive, both for exports and for its Brazilian operations, which are the two areas of activity of the company. In 2011, around 50% of the soybeans originated by the Company were exported, mainly to Europe and Asia, in grain form and as  RaçaFort soybean meal. The other half, including the production of soybean oil, was sold in the domestic market, in very promissing regions: the Southeast, which accounts for most of the Brazilian GDP, and the North and Northeast, that have seen contant growth in consumption in recent years.

Both Algar Agro’s markets, domestic and export, are also benefiting from biodiesel programs that are being adopted in several countries, which have boosted the demand for grain and oilseeds. top