Emerging Markets Behind Agriculture Boom Now Driving a Bust
- Weak currencies boost profits for growers in Brazil and Russia
- Bear market will last another three to five years: Basse
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The expression emerging markets has a whole new meaning for farmers across the globe.
In the late 2000s, food demand from China and India’s growing populations sparked a frenzy for agriculture investment and sent prices soaring. Now, the other two big emerging markets -- Russia and Brazil -- are behind the collapse in prices as farmers ramp up grain production and stockpiles swell. Weak currencies make it profitable for growers in those countries to boost output and may prolong the bear market for another three to five years, according to Dan Basse, president of researcher AgResource Co. in Chicago.