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09-27-2013 09:30 AM
China has purchased a land in Ukraine which has a similar size of the state of Massachussets, says England's Channel 4. The deal is being conducted by two Chinese state-run companies and is being called in Ukraine as an "unprecedented foreign investment". The deal cost more than US$ 2.6 billion and the goal to grow crops and raise pigs.
What's next for China?
09-27-2013 09:45 AM
What's a person to believe????
> Ukraine Denies Reported Huge Land Deal With
China: Ukrainian agricultural firm KSG Agro said on
Tuesday it had no plans to sell millions of acre of Ukrainian farm land to a
Chinese state firm, contradicting weekend Chinese media reports. The South
China Morning Post reported on Sunday that the Asian firm was to buy 7.4
million acres of Ukrainian farmland. That represents about 10% of the country’s
overall arable area. KSG AGro does not intend or have any right to sell land to
foreigners, including the Chinese according to the Ukrainian firm. KSG did say
that the two countries are working on a contract for cooperation in a project
aimed at installing irrigation systems over an area of 7,400 acres in Ukraine
09-27-2013 10:18 AM - edited 09-27-2013 10:31 AM
My Ukrainian source, an ag economist in Kiev just shared with me these thoughts on the Chinese purchase of Ukrainian farmland:
"Officials are all denying or just keeping silent. But since the news came from Reuters it must be true. The situation will have been clarified in few days.
So, for now, the project starts with 100,000 hectares. But, eventually it will increase to the 3 mln ha, using the Chinese money to rent more and more farmland. Doesn't it remind you of the ancient story about the Trojan horse?
This is just the beginning. The Ukrainian governmental corporation have already signed very unprofitable contract. Some companies that have already accumulated huge areas of arable land are planning to go to IPO to Honkong etc.
Yes, the company "Ukrlandfarming@ that rents somewhere 1 mln hectars of land plans to go public and make the IPOs in HongKong and London and at the same time make private placements. Company plans to sell 25-30 percent of shares on the stock exchanges and nobody knows how many via the PP.
By the way our Ag minister proposes for the National Academy of Ag sciences to start cooperation with several Chineese Ag academies and proposes to offer to chinese 150-170 thou ha of the state land.
Ukrlandfarming rents throughout Ukraine about 1 mln ha, plans to go public and make IPO and PPs in HongKong and London. The 3 mln ha of land is in the Ctntral part of Ukraine - Dniepropetrovsk oblast.
The "Ukrlandfarming" company and its daughter "Avangard" are owned by the Ukrainian tycoon Oleg Bakhmatiuk," he says.
Net net, what do you all think this could mean for the world supply/demand picture longterm?
09-27-2013 11:30 AM
So.....the real question is whether or not they will do a better job of farming that area that the Ukrainians. If they can't or won't, it doesn't make any difference in the world's grain supply.
09-27-2013 11:40 AM
...... China can upgrade production and the technology currently available for those acres. The ground is already under production. All this does is reserve the production for China.
If China can do this in large areas of Africa that are not currently productive then it becomes important as a new source and will reduce competition for food to the degree of what is actually a new source of food.
On the other hand, China's food needs are massive. As long as that need is met by stable production a balance can be maintained. The time will come when there is a very poor year in China and global markets will be rocked. Their reserves will help with that situation, as would any NEW areas under production. Ukraine is not a new area.