Agro Perspectiva

Russia's ban on grain exports takes effect as wildfires rage

17.08.2010 11:36 "Agro Perspectiva" (Kyiv) — A Russian ban on grain exports took effect Sunday as at least 500 fires raged across the country. Moscow put a halt to the exports because of low yields caused by the wildfires, record heat and drought. Russian Prime Minister Vladimir Putin’s ban on grain exports took effect Sunday, and it is expected to continue through the end of the year. The banned items include wheat, wheat flour, rye and corn, among other things. The Kremlin says the move is part of the government’s attempt to keep down the prices of basic foodstuffs amid the country’s worst drought on record. Some analysts say the ban is also an attempt by the government to quell the possibility of domestic unrest because of soaring prices. Last year, Russia was the world’s third largest wheat producer with a harvest of nearly 100 million tons. But this year that number is expected to be about 25 percent lower. Russian President Dmitri Medvedev says about one quarter of the country’s crops have dried up due to the drought, leaving many farmers are on the verge of bankruptcy. Mr. Medvedev spoke this week about the severity of the problem. Mr. Medvedev says now our greatest task is to help those who have been affected by the fires, to return to a normal life as soon as possible. He says the state is aware of their responsibilities and that those affected by the fires will get compensation for their loss. The ban led to a more than 50 jump in wheat prices on the global markets Friday. Some economists worry the ban may also increase the price of other foodstuffs. Karen Ward, a senior global economist with HSBC bank, addressed the issue during an interview on Russia’s state-run english television channel, Russia Today. «The danger is that financial markets start to anticipate price rises for other commodities and that actually causes a more general food price spike,» Ward said. Prime Minister Putin shrugged off any possible controversy surrounding the ban, saying the Kremlin may extend it beyond this year if the harvest is bad. Meanwhile, as the heat continues, Russian emergency ministry officials say they have reduced the number of fires burning across the country by about a quarter to around 500. Despite the news, many environmentalists say they are worried about several blazes near the country’s top nuclear research facility in Sarov. Officials admit that they haven not been able to get the fires under control, but that there is no danger to the general public. Additionally, nearly 30 fires continue in the outskirts of Moscow. As a result, the acrid smoke and smog that enveloped the capital, off and on this week, has returned forcing many to wear face masks outdoors. Forecasters say they expect temperatures to hover in the mid-30’s Celsius for at least several more days.