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Investing in land in Paraguay is and will continue to be very attractive because it has many opportunities, growth potential, and a favourable country framework. Those who buy land in Paraguay today will not only be profitable for what they produce but also for land that still has significant potential for price increases, said Rodrigo Artagaveytia, director of Everdem. He also mentioned that the business of buying and selling land rebounded at the beginning of this year.
What is the current state of the farm real estate market in Paraguay?
The first thing I consider, beyond the situation of the markets, is that Paraguay is a country of opportunities and will continue to be so because of the quality of its soil and the spectacular production conditions. Therefore, the land market will be governed by supply and demand and investment in the country. He will still have a long career because the country’s opportunities are enormous, and there is much to do and grow.
What was the behaviour of the market in the last 10 years?
After many years of lethargy due to a lack of demand and sufficient capital to buy the abundance of land in the country. The land market registered a substantial increase accompanied by the rise in commodities and peak prices reached there by. 2011. From then on, the prices of commodities, such as soybeans, cooled down a bit, and the investment that came to the country also retracted. We had about 10 years of stagnation and price deterioration due to a lack of demand. In this period, land prices dropped between 20 to 25% and remained with very few operations. The land market in Paraguay has been asleep in recent years, with very few operations, very little demand and stable values for several years now.
What do you see for this year, and what are the projections?
This year, we see a significant reactivation of the market for commodities such as soybeans and meat, which are excellent Paraguay products. Behind that logically comes an improvement in the profitability of the land and a consequent improvement in values. We are experiencing, on the one hand, better prices for the produce of the land and, on the other hand, an increase in interest in land by local and foreign investors.
We started these first months of the year with greater interest from potential buyers but still with few concrete operations because this is not an overnight process. Still, we see an apparent change in the demand for consultations and the interest of potential buyers. Many operations have already been closed this year compared to last year when there were few. There is a lot of demand; therefore, we believe it will be a year of price recovery.
What is most in demand?
If one starts from the base of the high prices of products, there will be more demand for agricultural land, livestock, and land to be developed for production. There is demand for an essential element for production, which is land. Therefore, there is an orientation of those who seek land for agriculture towards the Eastern region and those who come for cattle ranching or property development, naturally with an orientation towards the Chaco.
Also, several ranchers from the Eastern region entered agriculture. They moved their livestock production to the Chaco because the land was expensive, and agriculture was much more profitable on that soil type. Therefore, if we analyse the evolution of the livestock stock in Paraguay, the relationship was changing; before, there were more heads of cattle in the Eastern region, and now it is equating, and we are beginning to experience that the Chaco has more animals. The investment is focused on different types of businesses, but it is indistinct because all the products in the field are worth it, and from there, the demand is for all types of land.
Are national entrepreneurs or investors worldwide more interested in buying land in Paraguay?
Due to its natural conditions and country framework, Paraguay has been and will continue to be an attractive country for investment, both for local and foreign investors. Paraguay has a stable economic policy, has shown tax stability, is a country that has never devalued its currency and has been working year after year and doing things better to attract more critical capital and help the country’s development.
The investors are indistinct, and also seeing the evolution of the land, in the changes of fields that were previously only cattle ranchers to become agricultural and cattle ranchers, the Chaco that is growing in its agrarian production with nearly 200,000 hectares, the evolution irrigation, the complementarity of different items, and knowledge of the aquifer; All of this makes Paraguay attractive, not only because of the cheap land but also because today anyone who comes to invest in the country knows that they are going to obtain land as a production factor that allows them a range of opportunities.
Who are those who seek the land?
They seek opportunities to invest in safe, profitable businesses with growth potential. Whoever buys land today in Paraguay will be profitable for what it produces, and land with the potential for significant price increases to be comparable with the region. For example, in Uruguay, land in Paraguay is still much cheaper because they have different problems with infrastructure access. Paraguay has not yet reached all the markets, and meat has not yet been sold like in other countries because we do not have energy distributed throughout the country. All those factors influence land prices in Paraguay to be the lowest in the region. To the extent that Paraguay develops, with greater productivity, complementarity and more infrastructure, prices will continue to accompany and approach the levels of other countries. Today, those who invest in land come from different places, from various countries and for different items.
Where is it cheaper to get land?
Today, buying land in the Chaco is cheaper because it is more developed in the Eastern region. Those places with more to develop and discover are where you will have a more significant opportunity to grow and appreciate your investment.
What are the price ranges?
In the Chaco, in the western region, which is an area that is changing a lot due to low rainfall, with a potential of 100 to 120 kilograms of meat per hectare, we are talking about USD 300 per hectare. And if they have irrigation potential or are on the aquifer, we are already talking about 500 dollars per hectare in virgin land.
If we go to the central zone of the Chaco, we can have reference prices of USD 450 per hectare. If we talk about established establishments, prices rise to USD 900 per hectare, where the potential meat production is 170 kilograms per hectare.
On the other hand, in the eastern zone, where it already rains more, virgin land is at USD 500 per hectare, and developed fields are at USD 1,100 per hectare, which produces 250 to 300 kilograms per hectare. Those are reference values. The eastern region is more complex, with variations ranging from USD 800 to 11,000 dollars per hectare.
Source: Agro Value
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