Russia bans export of grains till 2011
Drought, wildfires have destroyed 20% of its wheat crop. It seeks to prevent food price hikes.
MOSCOW - Russia on Thursday banned exports of grain for the rest of the year after a severe drought and wildfires destroyed 20 percent of its wheat crop.
The price of wheat, which has already jumped 70 percent on world markets this summer, rallied further on the news.
Among the world's largest exporters of grain, Russia said the ban will run from Aug. 15 through Dec. 31 and could be extended into next year.
The wheat price, which was up another 8.3 percent on the Chicago Board of Trade on Thursday, may mean that Americans and Europeans pay slightly more for bread. But the bigger burden will fall on people in the Middle East, Africa and parts of Asia because commodity prices make up a larger part of their residents' food bills, analysts said.
Prime Minister Vladimir Putin announced the ban - which in addition to wheat and wheat flour, covers barley, rye and corn - at a Cabinet meeting Thursday, 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 next year," he said during the televised meeting.
Most 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 western Russia have spread into farmland and there are fears that more fields will be lost.