Emerging Market Update: Buy Brazil

I’ve been thinking about Brazil more and more as I study what’s going on in the world. More and more, I come the conclusion that Brazil will have a big hand to play. For investors, there will a variety of opportunities.

For instance, the cerrado: a vast savannah that is one of the most productive farming regions in Brazil. It produces 54% of Brazil’s soybeans, 28% of its corn and 59% of its coffee. It also supports 55% of Brazil’s beef industry.

It’s an immense area – about 200 million hectares (or 494 million acres) – with about half of the land still available to convert to producing farmland or to support livestock. This has been, and remains, a kind of frontier of world agriculture. When you look at the amount of new arable land cultivated in the past 30 years, much of it has come from right here.

Though Brazil didn’t win its sixth World Cup, the country is in a good spot. It has a few things the world will really need over the next couple of decades as the global population rises by more than 70 million people a year. It has land, water and plenty of sunshine. Good for growing things…and good for smart investors.

Chris Mayer
for The Daily Reckoning