Wheat rose to a 23-month high in Chicago as Russia, the world’s third-biggest grower, banned exports because of the country’s worst drought in at least a half-century.
Halting shipments would be “appropriate” to contain domestic prices that gained 19 per cent last week, faster than at the peak of the global food crisis in 2008, Russian Prime Minister Vladimir Putin told a government meeting today in Moscow. A government decree signed today bans exports of wheat, barley, rye, corn and flour from August 15 to December 31.
“As of today, Russia has no grain market,” said Kirill Podolsky, the chief executive officer of Valars Group, the country’s third-biggest grain trader. Valars will stop exports immediately because shipments may be held at customs until the start of the ban, he said. “This will be a catastrophe for farmers and exporters alike.”
A heat wave in Russia, dry weather in Kazakhstan, Ukraine and the European Union, and flooding in Canada ruined crops and drove a surge in Chicago wheat prices of as much as 92 per cent since June 9. Russia’s drought is now threatening sowing plans for winter grain and damaging other crops including sugar beets, potatoes and corn, the national weather centre said this week.