Emergent launches fund to buy farmland

LONDON (Reuters) - Emergent Asset Management is planning to launch a fund soon to buy farmland in sub-Saharan Africa for investors looking for exposure to agriculture.

David Murrin, chief investment officer at Emergent told Reuters on Monday that the money would go into the company's new African Land Fund (ALF), to be managed in a joint venture with South Africa-based Grainvest.

"Investors see that food security has become more important than energy security," he said, adding there was a lot of interest in farmland as an alternative to investing in grain futures, where prices have already surged.

"We believe agricultural land is important and the demand for protein and the focus on biofuels will mean much higher prices for maize, wheat and other grains.

Food prices have surged on shortages, partly created by the use of wheat and corn in biofuels.

Rising demand to feed livestock to meet growing appetites for meat, particularly from the rising affluence in emerging market countries, is another important factor.

Analysts estimate about 1.2 lbs of corn is needed to produce 1 lb of chicken and 3.6 lbs of corn to produce 1 lb of pork and about 6 lbs of corn to produce 1 lb of beef.

"Urbanisation in China and India will feed agricultural prices ... Biofuels impinge on human consumption," Murrin said.

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