'Global warming? Bring it on!Ó So say Ukraine's farmers and their brethren over the board in Russia's Black Earth agricultural regions. The world is getting hotter, but that will be good for food producers in eastern Europe who have already seen the productivity of their fields rise on the back of higher temperatures.
Both Ukraine and Russia have enjoyed bumper harvest in recent years due a combination of warmer weather and the payoff from reform and investments.
Russia brought in record 110m tonnes of grain in 2008 and another good result in 2011 of 94m tonnes. Ukraine also enjoyed a bumper harvest last year of 56.7m tonnes of grain, up 44% on the previous year. Yields in several of Ukraine's subcategories, like millet, corn and buckwheat, have doubled in just the last year.
'Global warming (whether natural or human-caused) is unevenly distributed, with CIS and Asian countries getting the most of it,Ó analysts at Erste Bank said in a note in January.
Ukraine has seen harvest recover from 2007 when it had the lowest harvest on record as an independent state, caused by a drought during the harvest season. While the rest of the economy slips into a torpor, the leading agricultural enterprises like MHP and Avangard continue to pour money into their farms and expect to see output and profits continue climbing.
Agricultural output has been improving steadily and both Ukraine and Russia are rapidly rising up the international grain export rankings as grain is becoming a strategic product on a par with oil. Oh and rising food production also has the added benefit of holding down inflation.