Russia imposes ban on grain exports; Prices of staples such as bread, flour and beer are set to rise

From Fin Facts Ireland:

Russia on Thursday imposed a ban on grain exports and staples such as bread, flour and beer are set to rise as the price of wheat has risen to highs not seen since the 2007/08 global food crisis.

Vladimir Putin, Russian prime minister, announced the ban on all the country’s grain exports on Thursday  effective within 10 days, following the worst drought in at least 30 years, which has fanned wildfires across the country. Russia is the world's third biggest grower of wheat and the December delivery price rose  9.75 cents, or 7.9%, to close at $8.1525 a bushel Thursday on the Chicago Board of Trade, after advancing by the CBOT’s 60-cent limit to $8.155, the highest level since August 2008. September futures rose the daily limit to $7.8575. The US wheat futures are up more than 80% since mid-June, the sharpest rally in nearly 40 years. Meanwhile, European wheat prices jumped more than 12% to €236 a tonne on record trading volumes.

Shares of big food companies fell Thursday and Russia's agriculture ministry’s most recent forecast of 2010 production is at 70m-75m tonnes, down from an estimated 85m tonnes a fortnight ago. Last year, the harvest was 100m tonnes.