We are a future oriented company. In the years to come, as population and income grow, mankind will increasingly depend on food production. We are determined to create the platform that can best deliver food productively to the world. Because you can’t predict the future but you can build it.
Coping with food and energy increased demand
Over the next 20 to 30 years, food and alternative energy will be increasingly important. If there’s the need for 50 million more hectares of arable land, 25 million will be in South America. We already are the region’s second largest food producer but we want to be the first.
And we are bound to achieve this goal sustainably based on our ability to understand the new paradigm and to provide innovative services.
Global food and protein projected consumption
According to FAO, economic and social development is often accompanied by improvements in food consumption as well as gradual elimination of dietary deficiencies, thus improving the overall nutritional status of the population. Analyzing FAOSTAT data, we find that dietary energy per capita per day has been steadily increasing on a global basis while calories per capita increased by approximately 450 kcal per capita per day and even by over 600 kcal per capita per day in developing countries, over the past 50 years. This shows that per capita diets in developing countries are changing as incomes rise. Oil crops have seen the fastest growth in area of any crop sector and its per capita consumption is expected to rise more rapidly than that of cereals.
These crops will account for 45 out of every 100 extra kilocalories added to average diets in developing countries up to 2030, while the growth rate in the demand for cereals is expected to rise at least 1.4% per year up until 2015. In conclusion, the world has made significant progress in raising food consumption per person, and will keep on increasing its demand. However, food strategies should not focus exclusively on ensuring food security, but must also achieve the consumption of adequate quantities of safe and good quality foods to ensure a healthy diet.
Biofuel usage trends
High oil prices, tight energy markets and climate change are some of the reasons why worldwide governments support the production and use of alternative, renewable energy sources. Agricultural crops such as maize, soybean and sugar cane are now being used to produce biofuels, bioheat and biopower. Biofuel use represents an important share of global cereal, sugar and vegetable oil production.
By 2019, about 13% of the global production of coarse grains will be used to produce ethanol compared to 9% over the base. 16% of the global production of vegetable oil will be used to produce biodiesel compared to 9% over the base. Worldwide ethanol production increased from 40,325 million liters in 2005 to 92,580 in 2010 and is expected to reach 158,893 in 2019, while Biodiesel production grew from 7,936 million liters in 2005 to 23 143 and will reach 41 170 in 2019.
Mercosur will concentrate half of the world’s increased agricultural production
As world population as well as food and energy demand increase, only 3% of the Earth’s land is suitable for agriculture. Most of this land is located in the central and southern plains of South America. In effect, half of the world’s increased arable land will be in South America, or as Gustavo Grobocopatel, Grupo Los Grobo’s Chairman, says “If the world needs 50 million more hectares of arable land, 25 million will come from South America”. But the region is not only suitable for agriculture. It is also one of the greatest reserves of water and natural resources. Moreover, it has an outstanding human capital, due to its multi-cultural heritage and high education standards. Among this region, Grupo Los Grobo is the second largest food producer with operations in four top potential markets: Brazil, Argentina and Uruguay. Hence, it can reduce climate impact by adapting crops to each country’s profile. Through this geographic and crop diversification Grupo Los Grobo reduces risk and offers an excellent investment portfolio.