Russia Bans Grain Exports: Russian Wheat Ban Pushes Prices Up
Russia Bans Wheat And Grain Exports After Worst Drought In 40 Years
Russian President Vladamir Putin has announced a temporary ban the exports of grain, including wheat, barley, corn, rye and flour.
"Due to the abnormally high temperatures and drought, I consider it expedient to introduce a temporary ban on the export from Russia of grain and other agricultural products produced from grain," Putin said at a government meeting.
The ban is "a big deal" because the former Soviet Union has emerged as a major exporter on the world market, said Jerry Gidel, analyst at North America Risk Management Services, a brokerage in Chicago. Russia was the major supplier to Egypt, the world's largest importer, in the crop year that ended in May.
Worldwide grain prices shot up after news of the Russian Grain Export Ban. Wheat crossed the $7 per bushel mark for the first time since September 2008.
Putin spokesman Dmitry Pskov confirmed to CNN that the ban would be from August 15 through December 1.
Russia is the world's third largest wheat exporter, but is facing the possibility of wheat shortages. The drought has forced the country's Agriculture Ministry to slash its grain forecast from 90 million tons to between 70 and 75 million tons.
The news will likely benefit American and Canadian grain producers but bad for consumers as the prices for grain related food products are expected to rise.