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Brazilian farms 'cheap' despite price rises
17.05.2010 10:54 "Agro Perspectiva" (Kyiv) —
Brazilian farmland is «significantly undervalued» despite rises of up to 7.5% over the last year, analysts at asset manager Brookfield said, saying the hangover of the credit crunch has provided opportunities for cut price deals.
Brazilian farmers reliance on borrowing for 2550% of production costs left them particularly exposed to tighter credit conditions, Brookfield said, highlighting the cancellation of many sugar projects.
«The decline in credit came at a particularly inopportune time, when producers were pursuing greenfield and brownfield expansion projects,» a report from Brookfields agriculture division said.
The sectors woes had provided the opportunity for buyers «to acquire assets at attractive entry values».
«Well-capitalised producers are benefiting from the tight credit conditions given their ability to acquire assets at a discount.»
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