Elders looks to invest farm product in China

BEIJING - The Australian company Elders, the world's largest woolbroker, may invest in wool mills, cattle feedlots and other farm product processing plants in China to tap an economy where agricultural trade jumped to US$51 billion ($70 billion) last year.

Elders, which sells meat in China to supermarkets run by Carrefour SA and Tesco Plc, is expanding in markets for Australian commodities including livestock and horticulture throughout Asia.

Boosting farm products sales in China may help the company to weather a two-year decline in global wool prices.

China had a record US$4.64 billion agricultural trade deficit last year, its first since joining the World Trade Organisation in 2001, as imports of wheat and cotton rose 48 per cent.

China had a US$2.5 billion farm product surplus in 2003.

"China is the most important market for us in Asia," said Nicholas Hunt, the company's Northeast Asia manager.

"Elders may partner with a local company for the new ventures," he added.

The company's revenue from China may rise to A$500 million ($534 million) by 2008 from about A$365 million now, Hunt said.

Wool now accounts for half its revenue in China from 90 per cent in 2001 when the Adelaide-based company began operations in Shanghai, Hunt said.

He didn't say how much money the company may invest in the new businesses.

- BLOOMBERG