Brazilian Farms Go Public
Farmers are the latest participants in the Brazilian IPO frenzy. The window is attractive for cashing in on high commodity prices, but the path is not clearly plowed for all.
The larger players in Brazil's farm sector are poised to
join the country's lemming-like rush to go public. July's 294
million reais listing for SLC Agrícola, a soy and cotton
grower based in Porto Alegre, illustrates this emerging trend.
A handful of sugar, ethanol and beef companies have done IPOs
in recent years. But SLC's Bovespa float through Credit Suisse
and JPMorgan marked the first time a pure-grower has tapped
into rising global demand for Brazilian equities to fund
expansion amid the soft commodity boom.
Farming in Brazil has hit an upswing in the last three years,
explains Phillip Duebras, an analyst with Rio de Janeiro-based
hedge fund Paraty Investimentos. A spurt in worldwide demand
for agricultural products and macroeconomic stability in Brazil
have led to a "recuperation phase" where cost advantages in
Brazil have increased relative to farmers in other
If commodities remain elevated, the...
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