Emerging Countries at the top over the next decad for agriculture

Countries such as Ukraine combine two investment themes which are likely to be making headlines, emerging markets and agriculture

by Graziano Alderighi

The Association of Investment Companies recently voted emerging markets as their top performing investment region for 2010 with 35% of the vote, as the recovery continues apace, showcased by the Economy Minister of Ukraine stating that GDP in the country will grow by approximately 3% in the next year.

Dr Slim Feriani, chief executive of Advance Emerging Capital said, "Emerging countries have emerged as the “relative winners” from the subprime crisis and resulting recession for two prime reasons: the quality of their sovereign and household balance sheets has never looked so strong compared with developed countries as it does currently; and their economic and corporate earnings growth is and will continue to easily outstrip that of the developed world in both real and nominal terms for the foreseeable future."

And within emerging markets, it is agriculture which leads the charge. By 2050, there will be 2.5 billion more mouths in the world to feed, pushing up land and food prices, and making agricultural countries such as Ukraine, the “bread basket” of Europe, key in securing global economic growth and food security.

70% of Ukraine is arable land, and it holds 40% of all the world’s rich black earth soil, making it the ideal investment location for investors looking for exposure to two of the biggest investment themes of 2010, and possibly the next decade.

Aston Lloyd, a London based investment company, has launched a project in the country to do just this, leasing hectares of agricultural land in the Crimean region. This will give investors a yearly return from the sale of harvested grains, as well as benefiting from capital growth on the increasing value of the land.

Joseph Upchurch, Managing Director of Aston Lloyd said, “The news that GDP in Ukraine is growing again, before the UK, comes as no surprise as investment money pours in. Companies and individuals are starting to recognise the potential inherent in the black earth soil, and our project hopes to be a key part of that.”