Drought coupled with wildfires and ban on grain exports push food prices to record high in Russia
Posted on 25. Aug, 2010 by Allen Smith in Business
The worst drought, and the recent wildfires have led to rise in the prices of basic commodities in Russia.
While the losses due to drought was estimated at $1 billion, its 3rd week in row prices have been soaring high, the inflation shows a 0.2% which is way too much than what it was prior to the drought, and prices of staple food of the people here, the buckwheat and wheat flour have been trading at record high making it just unable for poor to have his bread.
And government says the inflation rate is lower hovering between 6 and 7% it’s lower than the 2009 figures of 8.8% in spite of the drought.
The price of staple food grain, wheat rose by 8.6% higher in a week’s time; that of flour rose by 3.3%, milk by 1.3%, and the cost of bread also increased by about 1%. Last month Russia recorded hottest ever July, the heat coupled with drought affected central Russia which eventually resulted in wildfires spreading even to villages across vast areas.
About a quarter of country’s crops were destroyed by the wildfires, the production of foodgrains touching low ebbs forcing and government to issue a ban on export of grains to reassure the domestic demands are met. This may have resulted in fluctuations of grain prices among commodities markets.
Business experts sound weary if this price rise and inflation may spread to other countries too.
