Global General
Drought in Russia causes bread price hikes
(Xinhua)
Updated: 2010-08-12 11:44
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MOSCOW - Drought in Russia, which dramatically reduced grain production, has caused bread price hikes domestically and abroad, analysts said Wednesday.
In Moscow, the bread price has risen 20 percent in the past few days alone because of wheat production decreases and flour price hikes. The price for a loaf of bread has increased from 15 rubles ($0.49) to 18 rubles ($0.59).
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Russian Prime Minister Vladimir Putin said Monday that grain production in his country is expected to decrease to between 60 and 65 million tons this year from last year's 97 million.
He said Russia's grain consumption this year is about 78 million tons, so the government would take a package of measures to bridge the gap between production and consumption.
Four days earlier, Putin announced the suspension of Russia's grain export from August 15 to December 31 to curb grain prices.
Russia is the third biggest wheat exporter in the world.
The announcement raised the wheat price to 8.68 dollars per bushel, or 319 dollars per ton, the highest in the past two years. The wheat price may further rise to 10 dollars per bushel, market analysts say.
However, Russian Agriculture Minister Yelena Skrynnik said the government would adopt a series of measures to control grain and wheat prices, so the bread price in the country is unlikely to skyrocket.
Apparently, when the Russian wheat market sneezes, those in some other countries catch a cold.
Due to Russia's grain export ban, South African bread producers will have to use more expensive wheat, and bread prices will rise in the coming two months, Jannie DeVilliers, executive director of South Africa's Chamber of Milling, said.
In Canada, market analysts say the flour price has increased at least 10 percent in the past days, and the bread price may rise 20 percent in the next two months.