Agriculture

Agriculture

An innovative digital platform that gives everyone the opportunity to engage in Agribusiness anytime and on the go, by funding farms and trading of agricultural commodities.

Agricultural term investments are investments in production assets used from one production cycle to another, usually over several years[4]. Term investments are characterized by long amortization of the invested capital or by long gestation periods before revenues are produced. For example, the purchase of farm machinery and equipment requires a large initial lump-sum payment compared with the annual cash flow generated by the investment. Thus the invested capital only amortizes over a period of several years. Perennial crops take several years to mature, while staggered expenditures for land preparation, weeding, fertilization, etc. accrue during the immaturity period. Investments in irrigation systems or farm buildings may require considerable engineering and construction work before they are ready for use.

Many investment farms exist as commercial farming businesses that grow cash crops that sell in the commodities markets. Commodity or cash crops include soybeans, corn, wheat, cotton, and livestock such as cattle and hogs. Cash crops find uses in many industries.

Returns from investment farms are dependent on prices for agricultural commodities in markets. The higher the prices for commodities, the greater the profits for investment farms. Such farms attracted rapid capital from institutional investors between 2000 to 2014 but witnessed a sharp decline in inflows following a drop in agricultural commodity prices that year.

Food is a basic and permanent need, which is why agriculture has long been regarded as a stabilising part of a diversified portfolio. At Apexs Capital Limited we study crop cycles, input costs, weather and commodity price trends so that capital is directed to well-run agricultural projects.

Key highlights