An increasing number of institutional investors are finding ways of benefitting from rising agricultural needs in emerging markets that are beginning to contribute growing amounts to the global economy.

The world’s population is increasing at an astonishing pace. Figures from the US Census Bureau indicate that the number of people on the planet exceeded 6.75 Billion in January 2009, and it is increasing by almost 80 million every year, which equates to approximately 150 more mouths to feed every minute.

The world’s appetite is changing too. As global wealth increases, so does a desire for a better standard of living, which is in turn affecting eating habits.  Testament to this, are the changes that India and China are experiencing. Beef and Chicken consumption has quadrupled in China since the mid 1970s and is continuing to grow rapidly. Since meat is one of the most costly forms of food to produce, this significant change in demand has increased food prices and the pressure to produce the wheat needed to feed the animals that produce the meat.
Faced with this dilemma, the natural response is to increase the amount of food produced. However, due to increasing levels of urbanisation, and the shortage of water associated with this, global arable land is shrinking.

The business of feeding the world is therefore becoming bigger. The demand for food is pushing this business to become a major investment theme, which is expected to become a prominent investment option.

As long as people need to eat, there will be demand for agriculture. This demand, whether being wheat for crops for food or wheat for crops for animal feed, is continuing to grow, while supply remains naturally constrained. Therefore, those countries that produce and export large crops to meet the increasing demand will be enjoying favourable returns.

With 70% of its land arable, and holding 40% of all rich ‘black earth’ soil in the world, Ukraine (known as the bread basket of Europe) still boasts enormous land reserves that can grow various grains, seeds, fruits, vegetables and livestock.

The Ukraine has gained a lot of attention from industrial funds and investors who are capitalising on below market value prices for land, machines etc. (Statistic Yearbook of the Ukraine 2009), this in spite of the fact that the country’s economy has suffered as a result of the global financial situation.