The Australian Ag Podcast: David Williams on investment and food security

Agribusiness expert David Williams says Middle East sovereign funds are eyeing Australian ag assets in an effort to shore up food security.

Middle East sovereign funds are increasingly running their ruler over the Australian agriculture industry in an effort to shore up their own food security, agribusiness guru David Williams says.

Mr Williams, who has overseen some of Australia’s biggest agribusiness deals, told The Australian Ag Podcast – out today – that there had been increased investment demand from the Middle East, and other parts of the world, in the past three or four months amid rising concerns about food security.

“They are really back interested in food and ag for a food security perspective,” Mr Williams said. “You are seeing riots now in parts of the world, because people are getting pushed back into poverty and/or they are running out of food.

“Governments are now are taking a big interest in it so we’re seeing a couple of people here in the past two months from sovereign funds, who are wanting to invest in the country.”

Mr Williams said this would be a test for the Federal Government’s Foreign Investment Review Board who he said had “pushed the Chinese away just because they are Chinese, but more particularly if you’ve got any sort of Chinese government money in there”.

“It will be just interesting to see what they do with other governments that are here for no other reason than to try and get their foot on product to take out of the country. That’s a very different motive than say a PSP – which is the Canadian Mounties superannuation fund which has probably put $5 billion into this country in the last two years … they are interested in investing in food security, they don’t want to take anything anywhere.”

David Williams in his Melbourne office.

Mr Williams said overseas demand for Australian farmland was “patchy” and had pivoted since the start of this year, with demand from private equity funds reducing somewhat.

“Not necessarily because ag’s on the nose, but more particularly because some people just want to sit back and go ‘Well, is this the bottom? Is it going to get worse, let’s see how it pans out’.”

He said demand from the “Ivy League funds” including Canadian funds was “still aggressive”. “They’ve run out of options in the almond industry, and some of the other things that they’ve typically concentrated on – timber – and they’re now going very broadly into Australian ag. So I think that’s a big bright spot.”