The Financial Times reported that traders are experiencing “full-blown panic in the European grain market,” according to one source. Wheat futures displayed incredible volatility Thursday, with prices jumping over 12 percent in the European market, while U.S. wheat futures rose 6 percent but then dipped almost 3 percent to $7.65 per bushel.
It’s still unclear what the Russian ban on exports will mean in the long term, though many fear a resurgence of the 2008 food crisis, which led to global food riots in the developing world.
Wheat prices have gained over 80 percent since the middle of June. The news also hammered the share values of some food companies, like General Mills, which might not be able to efficiently pass on the increased price of grains to consumers, and would thus sustain losses.
Forecasts for the total Russian grain harvest have dropped steadily. The agriculture ministry now puts this year’s harvest at about 70 million tons, down from 100 million last year.
The Russian Grain Union asked the government to postpone the ban until September 1, since there are currently about 700,000 tons of wheat being shipped to ports for export. The Wall Street Journal reported that security is being increased on existing stocks, fearing a general panic.
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