Investments
7 Best Ways to Invest in Agribusiness
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Is it Worth Investing in Agribusiness?
Investing in agribusiness can be a strategic and profitable choice, and here are some reasons why you should consider it:
1. Diversification
The agricultural sector offers an excellent opportunity to diversify your investment portfolio, helping to reduce the risks associated with other sectors.
2. Sustainability
Agribusiness is considered resilient, as the demand for food and agricultural products is generally stable, even in times of crisis.
3. Potential Profitability
Investments in agricultural companies can provide attractive returns, especially in segments such as export agriculture and technology applied to the sector.
4. Protection against Inflation
Food prices tend to rise in times of inflation, making agribusiness an effective hedge against the effects of inflation.
5. Socioeconomic Impact
Agribusiness contributes to the socioeconomic development of rural areas, promoting local growth and job creation.
6. Sustainability and ESG
The demand for sustainable agricultural practices and investments in green technologies in the sector are on the rise, providing economic and environmental benefits.
Therefore, investing in agribusiness can be a profitable and sustainable strategy.
Main Agricultural Products of Brazil
Before diving into investment options, it is important to know the main products in which Brazil excels. Here are some of the main products of Brazilian agribusiness:
1. Soybeans
Brazil is the world's largest producer of soybeans and their derivatives.
2. Corn
Brazil is the second largest global producer of corn.
3. Sugar cane
World leader in the production of sugar cane, sugar and ethanol.
4. Coffee
Brazil is the largest producer and exporter of coffee, as well as being the second largest consumer market.
5. Beef and Chicken
The country has one of the largest cattle herds in the world and is a leading exporter of beef and chicken.
6. Orange Juice
Brazil is the world's largest producer of orange juice.
In addition to these market leaders, Brazil also stands out in products such as cotton, vegetables, fruits, wood, dairy products, sheep and goats.
These products demonstrate the importance of Brazil in the global agricultural scenario.
How to Invest in Agribusiness
Now that we understand the benefits of investing in agribusiness and know the main agricultural products in Brazil, let's explore the 7 best ways to invest in this sector.
1. Agricultural and Food Actions
Investing in shares of agribusiness and food companies is one of the most direct ways to participate in this sector. Some of the main companies listed on the Brazilian stock exchange include:
- Brazil Agro (AGRO3): Focused on the acquisition and development of rural properties.
- Agrogalaxy (AGXY3): Retail platform for agricultural inputs and services.
- Minerva Foods (BEEF3): Beef producer and trader.
- BRF Foods (BRFS3): Company with global operations, including brands such as Sadia and Qualy.
- Camil (CAML3): Processes and distributes cereals, including rice.
- PomiFrutas (FRTA3): Producer of fresh and processed apples.
- JBS (JBSS3): Largest producer of animal protein in the world.
Remember to diversify your portfolio and perform fundamental analysis to choose the best options.
2. BDRs and ETFs BDRs
To diversify internationally, you can explore BDRs (Brazilian Depositary Receipts) and BDR ETFs related to agribusiness. Some examples include:
- Archer Daniels Midland Company (A1DM34): Specialized in food processing and agricultural ingredients.
- Corteva Agriscience (C1TV34): Offers agricultural solutions including seeds and crop protection.
- Mosaic Company (MOSC34): Produces and distributes fertilizers and nutrients.
- iShares GSCI Commodity Dynamic Roll Strategy (BCOM39): BDR ETF that tracks an index of international commodities.
- iShares MSCI Global Agriculture Producers (BVEG39): BDR ETF that focuses on agricultural companies sensitive to commodity prices.
Check the updated availability on B3 to choose the appropriate options.
3. Fiagros (Agricultural Investment Funds)
Fiagros operate in a similar way to real estate funds, but invest in agribusiness assets, such as land and agricultural machinery. Examples include:
- Exes Araguaia (AGRX11)
- BB Credit (BBGO11)
- Canvas (CCFA11)Captaincy of Agro Strategies (CPTR11)
- Devant (DCRA11)
- Ecoagro I (EGAF11)
- Santa Fe Terra Mater (FARM11)
- FG/Agro (FGAA11)
- 051 Agro (FZDA11)
- Galapagos Agribusiness Saamiset (GCRA11)
- High Level Agro Investment Fund (HGAG11)
- SFI Agribusiness Investments (IAGR11)
- JGP Credit (JGPX11)
- Kinea Agro Credit (KNCA11)
- Eastern Agribusiness Chains (LSAG11)
- MAV Credit (MAVC11)
- NCH EQI Agribusiness Credit (NCRA11)
- Ourinvest Innovation (OIAG11)
- Itaú Asset Rural (RURA11)
- Riza Agro (RZAG11)
- Monikko BRB Crédito Agro (PLCA11)
- Suno Agro (SNAG11)
- Vectis Dataagro Agribusiness Credit (VCRA11)
- CRA Value (VGIA11)
- XP Crédito Agrícola (XPCA11)
These funds offer exposure to the agricultural sector in a diversified manner.
4. Agribusiness Letters of Credit (LCA)
LCAs are fixed-income securities issued by financial institutions to finance the agricultural sector. They provide a way to indirectly participate in agribusiness and generate income through interest. Some advantages of LCAs include:
- Security
- Income Tax Exemption for Individuals
- Low Risk
This makes LCAs an affordable, low-risk option for investing in agribusiness.
5. Agribusiness Receivables Certificates (CRA)
CRAs are fixed-income securities backed by credits from agricultural activities. They offer a way to diversify your portfolio and indirectly participate in the financing of agricultural activities. Some features of CRAs include:
- Attractive Returns
- Income Tax Exemption Under Conditions
- Low and Medium Risk
CRAs are a solid choice for investors interested in the agricultural sector.
6. Commodities and Futures Contracts
Trading commodity contracts and futures can be an advanced way to invest in agribusiness. This involves buying and selling futures contracts for agricultural commodities, such as grains, coffee, and sugar, to take advantage of market price fluctuations. These strategies can provide protection against price fluctuations and exposure to the performance of agribusiness.
7. Rural Producer Certificate (CPR)
The Agribusiness Receipt Certificate (CPR) is a credit instrument used in the agricultural sector, traded on the over-the-counter market to finance production. It allows rural producers to receive advance financing and offers investors the opportunity to invest in the agricultural sector.
How to Invest in Agricultural Businesses with Little Money
If you have limited resources, you can invest in agricultural businesses. Many of the options mentioned above allow for low initial investments and can be purchased individually. This means you can start investing gradually, diversify your portfolio and take advantage of the opportunities in the agricultural sector, even with a modest initial investment.
Finishing
Investing in agribusiness can be a profitable strategy, offering diversification, sustainability and potential for profitability. With the various investment options available, such as shares, BDRs, Fiagros, LCAs, CRAs, futures contracts and CPRs, you can choose the one that best suits your investor profile. Always remember to conduct adequate research and diversify your portfolio to maximize returns and reduce risks. Brazilian agribusiness offers a wide range of opportunities for investors of all levels.
Investing in agribusiness is a strategic and profitable choice. With a wide range of opportunities, from stocks to funds and fixed income securities, it is possible to enter this sector in an accessible and diversified way. Start exploring investment options in agribusiness and become part of this vital sector of the Brazilian economy.
