Saudi Arabia signs MOU to invest in Russian wheat, oilseed producer

The Saudi Agriculture and Livestock Investment Company (SALIC) has signed a Memorandum of Understanding to invest in RZ Agro Holding – a Russian producer of grain and oil crops.

RZ Agro Holding, a joint venture between Russian conglomerate Sistema and members of the Louis Dreyfus family, has a land bank of 106,000 hectares grouped into seven farms in the Rostov and Stavropol regions.

The deal was signed at the Russian Saudi Business Investment Forum on 4-5 October and is part of a broader strategy to secure long-term food supplies including vegetables and red meat.

Last year, the Kingdom halted its 30-year domestic wheat production and purchase programme over concerns about exhausting the country’s scarce water reserves – a marked u-turn on its policy throughout the 1980s to become self sufficient in food.

Since 2011 the country has been investing in food producers and exporters. Notable deals include SALIC’s 2013 investment in Continental Farmers Group, which gave Saudi Arabia access to 40,000 hectares of farmland in Poland and the Ukraine to produce sugar beet, wheat and rapeseed.

And last year, SALIC increased its stake in G3 Canada Limited – a Canadian .grains marketing company.

Russia is on target this year to be the world’s largest exporter of grains, overtaking the US.