As the war in Ukraine continues, the risk of food insecurity is reportedly rising.
While the COVID-19 pandemic contributed to supply issues, ongoing inflation concerns and Russia’s invasion of its neighbor is resulting in soaring food prices, which are expected to remain high for the foreseeable future.
Nearly 30% of the world’s wheat and 12% of its calories come from Ukraine and Russia, but the war has seemingly shut down grain exports from both countries.
Companies like St. Louis-based Bunge Ltd. BG, Switzerland-based Glencore plc GLNCY and Wayzata, Minnesota-based Cargill Inc. invested heavily in grain-handling infrastructure and oilseed crush plants, more than doubling Ukraine’s exports over the past decade.
But Russia has shut down many of Ukraine’s ports, and its own exports are curbed by banking restrictions and high, wartime insurance premiums on grain ships.
With skyrocketing food prices resulting from the war, U.S. farmers could find opportunities to fill the gap the Eastern European countries are leaving, and some analysts say the time is ripe for agritech, which uses modern methods to attempt to enhance farming.
Vancouver, Canada-based AgriFORCE Growing Systems AGRI says it is positioning itself to be part of the solution to the problem. The company’s goal is to transform agriculture by providing solutions that address the key challenges farmers grapple with.
AgriFORCE develops and acquires intellectual property (IP) and technology with the goal of improving farming. The company focuses on delivering sustainably produced, healthy crops for food, pharmaceuticals and nutraceuticals.
AgriFORCE reports that its proprietary facility design is an environmentally friendly and clean form of growing high-value crops using European Union good manufacturing practices in nearly any extreme weather environment.
Growth Through Acquisition?
Earlier this year, AgriFORCE acquired agtech consultancy Delphy Groep BV, a European agtech consultancy focused on optimizing agricultural production by driving innovation and operational expertise in agriculture, horticulture and controlled environment agriculture.
“Along with Delphy’s existing revenue, this acquisition is an alliance of our complementary expertise and shared values,” AgriFORCE CEO Ingo Mueller said in notes he wrote about the deal. “AgriFORCE and Delphy are dedicated to making positive change in the lives of farmers and consumers, and as we work together, we will make the most of this opportunity for innovation and growth in North America, Europe and, eventually, Asia and other regions for both companies.”
AgriFORCE also is buying Deroose Plants NV, one of the world’s largest tissue culture propagation companies.
The Deroose acquisition, expected to close in July, may strengthen AgriFORCE’s integrated agtech business model, enable the companies to drive growth in core markets and build on Deroose’s strong financial performance and consistent growth.
“Our two companies are strongly aligned with transforming the agriculture industry through IP, innovative technologies and expertise that enable cleaner, better crops with reduced environmental impact,” Mueller said at the time the deal was announced.
Deroose says that its crop IP enables increased yields per hectare for crops such as rubber, palm and banana, which is important in areas where arable land is scarce and restricted.
“We believe this positions AgriFORCE and Deroose to deliver value by maximizing the sustainability and productivity of available land, especially in tropical climates,” Mueller said.
This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investing advice.
Photo by Raphael Rychetsky on Unsplash
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.