“I think it is expedient to temporarily ban exports of grain and grain products from Russia,” Putin said in a government meeting Thursday. Putin spokesman Dmitry Pskov confirmed to CNN that the ban would be from August 15 through December 1.
Russia is the world’s third largest wheat exporter, but is facing the possibility of wheat shortages. The drought has forced the country’s Agriculture Ministry to slash its grain forecast from 90 million tons to between 70 and 75 million tons.
Grain prices have been rising everywhere recently, according to the United States Department of Agriculture’s Wheat Year in Review Report for 2008-2009, the most recent available.
Because adverse weather lowered wheat production in 2007-2008, there was a global price spike that year, the report states. Many wheat-producing countries harvested large amounts of wheat in 2008, taking advantage of the record-high prices and good weather.
After a sharp drop in monthly prices in October 2008, wheat prices continued rising. The all-wheat season average hit a record-high of $6.78 per bushel in the United States in 2009.
The world set a record at 25.1 billion bushels of wheat produced that year.
“U.S. and world wheat prices soared,” the report states. Eventually, the demand for U.S. wheat began exceeding the supply, further contributing to high costs.