Russian Prime Minister Vladimir Putin tried to restore his nation’s confidence even as he announced a ban on the export of Russian wheat. The former president said Russia had more than enough grain reserves to meet domestic demand. The ban will run to the end of the year, a measure which Putin said was necessary to “prevent a rise in domestic food prices.”
The ban may be superfluous, though; Russian wheat prices have consistently outpaced those on international markets, given the dire situation there. Wildfires are tearing through much of Western Russia during the hottest summer on record.
On the Chicago Board of Trade, wheat futures for December delivery soared almost 8 percent to 8.154 per bushel, the highest price this year. December corn futures reacted to wheat’s rise, climbing nearly 4.5 percent to 4.333 cents per bushel.
Russia found itself a net exporter of wheat in recent years, but the drought and subsequent fires have put paid to that notion, at least for the next six months. Wheat prices have already climbed 70 percent this summer, and it’s not unthinkable that they could double by the end of the year.
That prospect raises fears of a renewed global food crisis, like the one seen in 2007. Then, rising prices caused shortages and riots across the developing world, where food prices are most painfully felt on a day-to-day basis by those living on edge of subsistence.
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