French multinational Louis Dreyfus Commodities (LDC) says it is “eager” to participate in new rail and port tenders in Brazil. Andrew Roth, chairman of the company in Brazil, says that, for several years, LDC has invested heavily in logistics in the country as a means of remaining “very competitive”.
The current focus of the business is in the northern arc of Brazil, but Roth says that this will not rule out bids being made for concessions in other parts of the country.
“We have allocated capital to bid for concessions, if they are attractive,” he said.
According to LDC, some three million hectares of new agricultural land will be opened in the north of Brazil in the next few years, which will produce a further 30 million tonnes of grain. Given that China will account for the majority of this over the next decade, an estimated five new ports will have to be built to accommodate this extra traffic.
“Brazil,” said Roth,“is the country with the greatest potential to meet Chinese demand.”
He added that the appreciation of the dollar against the local currency, the real, would help Brazil, because manufacturing costs would become more competitive compared to other countries where LDC has a presence. Current exchange rates were also making it possible for producers to maintain margins, despite lower commodity prices.
“Brazilian agriculture will continue with the same competitive environment and low prices,” he said.