Due to a serious drought that has caused crop failures, the Russian government has placed a ban on grain exports. Exporting grain will be banned from August 15th to December 1st. The situation has grown so serious that all 28 regions have declared a state of emergency.
This along with several other factors has caused the world grain price to rise. Other countries are having the same problem with the weather and speculators have caused world wheat prices to drastically rise. The cost of a bushel of wheat rose to $8.25 on Friday. Such a dramatic rise has not taken place in 50 years. Several experts are saying the price could reach $10 a bushel.
“That’s faster than at the peak of the global food crisis in 2008, when food riots erupted from Haiti to Egypt, according to the Grain Union,” writes Bloomberg in an August 4 dispatch.
Russia is the world’s third largest wheat exporter; it produces about 97.1 million metric tons of grain a year. The Ministry of Agriculture has publically stated that the grain will be 70 to 75 million metric tons. They’re also saying it could be even lower.
With this coming shortage of food, the kulaks, the capitalists have shown themselves. The nation’s third largest told Bloomberg News that some farmers are “delaying sales and suspending supply contracts.”
The market forces capitalism are beginning their plans to profit from a possible food shortage. Thankfully, state intervention in the form of a 9.64 million ton grain reserve will be opened to stabilize the market and meet the population’s needs.
A representative of the Ministry of Agriculture told the television program “Utro Rossii,” “There is more than enough to provide our entire country with bread and bread products.”
Igor Artemiev, chief of Russia’s Federal Antimonopoly Service, stated that he was going to be keeping a close eye on food prices in the country, watching for “unwarranted” increases.