Another Update On Investing In Russian Agriculture

I had dinner Last Tuesday with a manager of Deloitte's Financial Advisory Services in Moscow. According to him, there are many Russian companies looking for investments to grow their business, but the size of the investments they are looking for is 10 million to 15 million, which excludes 99.9% of potential investors. (If you are looking to make a 10 million+ investment in Russian Agriculture, there are Russian companies desperate for your investment).

The answer to this, of course, would be to pool investments in a fund. Unfortunately, there are no "quality" funds for small investors (Small investors = anyone looking to invest under 8 million). This is a waste, and, if there is enough interest, I will see if it is possible to start a fund. I will answer emails and see about organizing this tomorrow (still a little jet lagged).

Alternative way to invest in Russian agriculture

The only current alternative for a "small investor" is to invest in Russian agriculture via the handful of publicly trading companies. Below is a portfolio, emailed to me by my sister's friend (the advisor and consultant in Russian ag).

Here is an ag portfolio I built in Yahoo finance. I would recommend building a similar one and keeping aware of their stock prices. [I could build my own portfolio, but seeing as there are only a handful of Russian agricultural companies, it probably wouldn't look any different.]

Black Earth Farming is the Russian benchmark — very big company.

Trigon Agri is in Russia, Ukraine, and Estonia
First Farms is in Slovakia and Romania (Romania has black earth)
Landkom is in Ukraine
Cresud and Brazil Agro are comparable large Argentinian and Brazilian ag holdings.

Symbol

Name

Trade

BEF-SDB.ST

BLACK EARTH FA SDB

29.30

FFARMS.CO

FIRSTFARMS

73.00

LKI.L

LANDKOM INTL

17.20

CRES.BA

CRESUD

3.340

CRESY

Cresud S.A.C.I.F. y A.

9.45

TAGR.ST

TRIGON AGRI

0.81

AGRO3.SA

BRASILAGRO -ON NM

6.66

^RCT

Rogers International Commodity

18.65

DJAIGAGSP

DJ AIG AGRI SPT SUB

225.35










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5 Responses to Another Update On Investing In Russian Agriculture

  1. Eric,

    for your interest Argentina will not export this year any wheat if conditions prevail. This makes more interesting Russi and Ukraine which are now inside the Top 5 wheat exporters.

    See http://www.agfood.net/2009/05/argentina-one-of-top-five-wheat.html

  2. Martijn says:

    Eric, check this article on insider trading and the SEC!

  3. Dudeman says:

    What about Chile? I heard they are pro-investor.

  4. Mark says:

    Well, I'd stay clear from Russia.

    A further disintegration seems plausible during the ongoing crisis. Foreign land owners may pose quite a fantastic target for populistic hatred when the local population is suffering due to high food prices.

    Too risky. From my point of view, one of the worst possible investments one can do. May be the reason why there is no good fund out there yet.

  5. Mark says:

    Maybe have a look at Lindsay Corporation. (not an investment recommendation!)

    They produce efficient watering technology and should profit quite a bit from high food prices and water scarcity.

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