China’s sovereign wealth fund says to invest more in agriculture

Singapore | Reuters — China’s sovereign wealth fund is eyeing more investments in agriculture, including partnerships with governments and other institutional investors, its top executive said in the Financial Times, in the latest sign that China wants a bigger foothold in the food industry.

China Investment Corp. would also strive to shore up food security in places that it invests in, and contribute to local job creation, Ding Xuedong, chairman of the US$575 billion fund, wrote in an opinion piece in the newspaper.

“We are keen to invest more across the entire value chain — in partnership with governments, multilateral organizations and like-minded institutional investors — in areas that will help to unlock the industry’s potential, increase the food supply and offer attractive returns,” Ding said.

“We believe the agriculture sector offers stability, a way of hedging against inflation and a device for spreading risk.”

China, with nearly 20 per cent of the world’s population, is the biggest consumer of a broad range of agricultural products. Rising wealth has increased demand for high-protein food such as meat, while the country is also putting a greater focus on food safety afer a series of scares in recent years.

Ding’s comments follows aggressive acquisitions by Chinese companies in the food sector. China’s largest grain trader COFCO earlier this year agreed to buy majority stakes in Noble Group’s agribusiness and Dutch trader Nidera.

Late last year, Chinese meat producer Shuanghui International Holdings bought U.S. pork producer Smithfield Foods. [Related story]

“While CIC invests to make stable financial returns over the long term, we also strive to shore up food security in places that we invest in, and contribute our share to local job creation and economic growth,” Ding wrote.

— Writing for Reuters by A. Ananthalakshmi.

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