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Disclosure: Personal Views Only. Not investment recommendations.

Sensible investors would say my friend Ali is a ‘madman’.

In 2019 Ali sold his London apartment to fund a dream. A dream to build a commercial agriculture business in Sudan. Ali worked for a prominent private equity fund in Egypt, but is Sudanese by birth. When he saw the writing on the wall that the US State Department would end their anti-terrorism sanctions in 2020 he knew this was a big opportunity. Sudan, a country of 40 million people which had been frozen in US sanction isolation for 20 years, was all of a sudden ‘investable’. He knew this was a business opportunity, but also time to participate in rebuilding the economy of his home country.

For his first farm in Sudan Ali leased some abandoned farmland from the government. Ali brought this abandoned government project back to life with new irrigation pivots and by rehabilitating the canal system which connected the farm to the River Nile. This initial farm worked, but after 2 seasons Ali wanted a longer term solution where he would own, not lease the land. So he found a better location, nearer to Port Sudan and bought 5,000 acres at $200/acre… $200/acre. He is preparing the land now and will grow wheat, corn, potatoes and alfalfa. He is speaking to investors to raise more money to further increase the land holdings and add machinery.

Yes, maybe Ali’s crazy. Maybe it’s more sensible to keep buying single family homes in Boise, or office buildings in Dallas, or allocate another $1 billion to a VC fund with a pipeline of promising fintechs. Or, maybe you should use the sell off to buy more Google. I heard they are working on something with AI.

Source: UN population estimates

Or, maybe Ali is crazy the way Noah was crazy when he decided to build a large wooden boat. Maybe building a farm on the banks of one of the largest rivers in the world and three hours from a port directly across the Red Sea from the wealthiest yet driest country in the world isn’t such a crazy idea. Maybe due to the expanding conflict in Eastern Europe the Middle East’s 483 million people will rethink where their food comes from (Ukraine) and see value in a food source right in their backyard. A boat with Ali’s wheat can sail from Port Sudan to Jeddah in 1 hour!

Maybe also as Rabobank predicts we are in the early stages of a 7 year agricultural super cycle driven by low food stocks, growing demand from China, and water stress in the US.

Check out Ali’s video above and tell me if you think he is crazy or maybe you’d like to talk to him.

7 Drivers of the Agriculture Super cycle

Link to: Rabobank Report

  1. Exporters stocks have fallen rapidly to 7-year lows;

  1. China is importing on a vast scale.

  1. It’s hard to increase supply rapidly

  2. Adverse weather conditions;

  1. Countries are engaging in food protectionism;

  2. Logistical costs are rising, notably in freight; and

  3. Speculators are holding more commodities futures.

Yellowstone Season 2

It’s been a really busy week. At this point I’m looking forward to a glass of wine and watching my new favorite series, Yellowstone. I finally discovered it and I love it. Reminds me of home.

Have a good weekend.

Erik

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Erik