September 12, 2008

Russia and Ukraine are set to significantly expand their agricultural plantings this year as high grain price are attracting investment in the commodity, the FAO said Thursday (Sep 12, 2008).

Wheat output in the European members of the Commonwealth of Independent States, is forecast to rise 13 percent this year to 73 million tonnes, the FAO said at a meeting in Paris on financing farming in Eastern Europe and Central Asia.

Russia and Ukraine will expand their wheat plantings this year by 2.4 million hectares to 33.8 million hectares. In Russia alone, total plantings of all grains is expected to reach 46 million hectares this year, 2.6 million hectares more than in 2007, the FAO said. Russia has also said it aims to be one of the world's top grain exporter in the next five years.

Higher prices have spurred corporations to buy up land in southern Russia's fertile "black earth" region, replacing inefficient collective farming with modern farming techniques and economies of scale.

Internationally, overall food prices have risen 83 percent in three years, according to the World Bank.