Wheat prices surge as Russia bans grain exports

A fresh surge in wheat prices looked set to heap more pressure on stretched household budgets today after Russia banned grain exports for the rest of the year.

Russia - one of the world's largest exporters - has seen a severe drought wipe out 20% of its wheat crop. The ban will run from August 15 through to December 31.



Wheat prices immediately jumped 60 cents to 7.85 dollars (£4.95) a bushel - the highest since September 2008.



CMC Markets analyst Michael Hewson said prices have surged from a low of 4.25 (£2.68) dollars earlier this year, although they remain well below the peak of the last surge in the cost of wheat, which hit 13.49 dollars (£8.52) a bushel in February 2008.



The move from Russian Prime Minister Vladimir Putin will add to the inflation pressure building in the UK despite sluggish economic growth.



Hovis breadmaker Premier Foods yesterday confirmed it would pass rising prices on to retailers, leading to fears that the shelf price of a loaf of bread could rise by up to 10p.



Premier is sourcing all its Hovis wheat from British farmers this year and, while crops are expected to be bumper in the UK, prices will rise in line with the global market.



Figures from the British Retail Consortium this week showed a sharp increase in the annual rate of food price rises during July, even though inflation is slowing among non-food retailers.



Putin announced the ban at a Cabinet meeting today, saying it was necessary even though Russia has sufficient reserves.



"We need to prevent a rise in domestic food prices, we need to preserve the number of cattle and build up reserves for the next year," he said during the televised meeting.



Despite the ban Russian farmers have little incentive to export anyway because prices have been rising even faster in Russia than in world markets.



The majority of the damage to Russia's wheat crop has been caused by the drought, one of the worst in decades as much of the country suffers through the hottest summer since record-keeping began 130 years ago.



But wildfires raging through much of western Russia have spread into farmland and there are fears that more fields will be lost.

PROMOTED VIDEO
Life and Style
ebooksA superb mix of recipes serving up the freshest of local produce in a delicious range of styles
Life and Style
ebooksFrom the lifespan of a slug to the distance to the Sun: answers to 500 questions from readers
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Food & Drink

    Oracle 11g SQL 2008 DBA (Unix, Oracle RAC, Mirroring, Replicati

    £6000 - £50000 per annum + Bonus+Benefits+Package: Harrington Starr: Oracle 11...

    Recruitment Consultant (Graduate Trainee), Finchley Central

    £17K OTE £30K: Charter Selection: Highly successful and innovative specialist...

    SQL DBA/ C# Developer - T-SQL, C#.Net

    £45000 - £55000 per annum + Benefits: Ashdown Group: Working with an exciting ...

    Sales and Office Administrator – Sports Media

    £23,000: Sauce Recruitment: A global leader in sports and entertainment is now...

    Day In a Page

    Ferguson: In the heartlands of America, a descent into madness

    A descent into madness in America's heartlands

    David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
    BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

    BBC faces corruption allegation over its Sir Cliff police raid coverage

    Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home
    Lauded therapist Harley Mille still in limbo as battle to stay in Britain drags on

    Lauded therapist still in limbo as battle to stay in Britain drags on

    Australian Harley Miller is as frustrated by court delays as she is with the idiosyncrasies of immigration law
    Lewis Fry Richardson's weather forecasts changed the world. But could his predictions of war do the same?

    Lewis Fry Richardson's weather forecasts changed the world...

    But could his predictions of war do the same?
    Kate Bush asks fans not to take photos at her London gigs: 'I want to have contact with the audience, not iPhones'

    'I want to have contact with the audience, not iPhones'

    Kate Bush asks fans not to take photos at her London gigs
    Under-35s have rated gardening in their top five favourite leisure activities, but why?

    Young at hort

    Under-35s have rated gardening in their top five favourite leisure activities. But why are so many people are swapping sweaty clubs for leafy shrubs?
    Tim Vine, winner of the Funniest Joke of the Fringe award: 'making a quip as funny as possible is an art'

    Beyond a joke

    Tim Vine, winner of the Funniest Joke of the Fringe award, has nigh-on 200 in his act. So how are they conceived?
    The late Peter O'Toole shines in 'Katherine of Alexandria' despite illness

    The late Peter O'Toole shines in 'Katherine of Alexandria' despite illness

    Sadly though, the Lawrence of Arabia star is not around to lend his own critique
    Wicken Fen in Cambridgeshire: The joy of camping in a wetland nature reserve and sleeping under the stars

    A wild night out

    Wicken Fen in Cambridgeshire offers a rare chance to camp in a wetland nature reserve
    Comic Sans for Cancer exhibition: It’s the font that’s openly ridiculed for its jaunty style, but figures of fun have their fans

    Comic Sans for Cancer exhibition

    It’s the font that’s openly ridiculed for its jaunty style, but figures of fun have their fans
    Besiktas vs Arsenal: Five things we learnt from the Champions League first-leg tie

    Besiktas vs Arsenal

    Five things we learnt from the Champions League first-leg tie
    Rory McIlroy a smash hit on the US talk show circuit

    Rory McIlroy a smash hit on the US talk show circuit

    As the Northern Irishman prepares for the Barclays, he finds time to appear on TV in the States, where he’s now such a global superstar that he needs no introduction
    Boy racer Max Verstappen stays relaxed over step up to Formula One

    Boy racer Max Verstappen stays relaxed over step up to F1

    The 16-year-old will become the sport’s youngest-ever driver when he makes his debut for Toro Rosso next season
    Fear brings the enemies of Isis together at last

    Fear brings the enemies of Isis together at last

    But belated attempts to unite will be to no avail if the Sunni caliphate remains strong in Syria, says Patrick Cockburn
    Charlie Gilmour: 'I wondered if I would end up killing myself in jail'

    Charlie Gilmour: 'I wondered if I'd end up killing myself in jail'

    Following last week's report on prison suicides, the former inmate asks how much progress we have made in the 50 years since the abolition of capital punishment