Legendary global investor and chairman of Singapore-based Rogers Holdings, Jim Rogers believes that shortages in the agriculture sector are coming.

Wheat prices in Europe hit their highest level in two years, rising almost 50% since late June as Russia is experiencing a record drought that has destroyed millions of hectares of its land.

"That’s the straw that broke the camel’s back," Rogers told CNBC in a phone interview Tuesday.

"We’re going to have much, much higher prices over the next few years," Rogers added.

Russia, currently the world’s number three wheat exporter, earlier this week slashed its grain harvest forecast to 70—75 million tonnes owing to the worst drought for decades.

Prime Minister Putin this week banned grain exports for the next four-and-a-half months due to the drought.

Last year, Russia exported 21.4 million tonnes of grain and observers had already warned that could be sharply lower this year owing to the drought. The Russian Grain Union has said that in a worst-case scenario, they could range from as low as 11 million tonnes up to 19.5 million tonnes.

Concerns about Russia — coupled with a drought that has also hit Ukraine and Kazakhstan as well as a low harvest in Canada — had already led to a spike in global wheat prices to two-year highs.

On Euronext, the November milling wheat future jumped after Russia’s announcement to 234 euros per metric tonne, up 11.96% on the day.

US wheat futures on the Chicago Board of Trade fell 5% on Friday after surging more than 20% earlier this week and nearly doubling since early July to US$8.41 a bushel.

Investors finally began to realize that prices for agricultural commodities have been too low for too long because of subsidies and other factors, which made agriculture an unattractive area for workers, Rogers explained.

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Jim Rogers has taught finance at Columbia University’s business school and is a media commentator worldwide. He is the author of Adventure Capitalist, Investment Biker, Hot Commodities, A Gift to My Children, and A Bull in China. See his website.

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