Russia bans grain exports because of fire and drought, sending prices soaring

@T=MOSCOW (Dispatches) --Russia's Emergencies Minister has warned that wildfires raging in the west of the country could release radioactive nuclides from land contaminated by the Chernobyl nuclear disaster.
Sergei Shoygu said special laboratories were monitoring a potential release of contaminants in Bryansk region on the border with Ukraine, which was sprayed with caesium-137 and strontium-90 after the explosion of the power plant's fourth reactor in 1986. The alarming statement came as firefighters continued to battle hundreds of fires across central and western Russia amid the hottest temperatures in more than a century.
Wildfires around Moscow have forced the Defense Ministry to order munitions moved from a military depot near the capital, the Ria Novosti news agency reported. Elsewhere there were reports that a secret communications centre of the Russian Army had gone up in flames, smh.com.au reported.
The President, Dmitry Medvedev, sacked several high-ranking officers in the navy on Wednesday after a 100-hectare naval aviation base was destroyed by fire.
The Prime Minister, Vladimir Putin, ordered a halt to all exports of wheat and other grains from August 15 after drought and fires destroyed one-fifth of Russia's crop and forced the country to draw from emergency reserves.
High temperatures, lack of rain and wildfires have devastated more than a third of cultivable land in Russia, the world's fourth-largest grain exporter. “This is very serious,” Abdolreza Abbassian, the chief grain economist at the United Nations Food and Agriculture Organization, said. “It's a desperate situation because it has caught everybody off guard … there is a risk of destabilizing panic.”
Wheat futures on the Chicago Board of Trade surged 6.4 per cent on news of the halt to Russian exports.
In his announcement at a cabinet meeting in Moscow, Putin said that Russia needed to “prevent a rise in domestic food prices”. He said he would decide whether to extend the ban into next year after this year's harvest.
In Bryansk, firefighters were concentrating on the southern part of the region, across the border from Chernobyl. “In the event of a fire there, radionuclides could rise
[into the air] together with combustion particles, and a new zone of pollution will appear,” Shoygu said.
Firefighters have been forced to drop water bombs to douse forest fires nearing the perimeter of a nuclear plant in Sarov, 500 kilometres east of Moscow.
Daytime temperatures have been above 30 degrees since June. Moscow's tabloid press has speculated the United States orchestrated the heat wave in order to favor its own grain exporters by blasting Russia with harmful rays from a research station in Alaska.
Wheat and barley have shriveled, sunflowers have wilted and sugar beet has barely reached half its normal size. Analysts said Russia's grain output could fall from 100 million tons last year to 65 million tons this year. Farmers have already begun to slaughter livestock early because they expect to run out of feed.
Putin may have acted to prevent a backlash after public displeasure of the handling of the fires which have killed 50 and left at least 3000 homeless.
Meanwhile, Russia announced Thursday that it will ban all grain exports for the rest of the year, sending wheat prices soaring to a two-year high and raising the possibility of inflated food prices that could throw an already fitful global economy recovery off track, Washing Post reported.
A severe drought and wildfires have destroyed one-fifth of Russia's crop and forced the country to draw from emergency reserves.
In announcing the ban at a cabinet meeting in Moscow, Prime Minister Vladimir Putin said that Russia, one of the world's largest wheat exporters, needs to “prevent a rise in domestic food prices.” He said he would decide after this year's harvest whether to extend the ban, which covers exports from Aug. 15 to Dec. 31.
Internationally, wheat prices have increased nearly 50 percent since June, fueling worries about a repeat of the food crisis in 2008 that triggered riots from Bangladesh to Haiti to Mozambique. Wheat prices in the United States are less likely to remain high, experts said, and a bumper crop could put American farmers in a position to benefit from the low supplies elsewhere.
Prices of other crops, including barley, rice and corn, also rose sharply after Russia's announcement.
In an era of free trade, export bans by countries are usually considered a last-resort measure to protect national interests. Indonesia, where whole forests have been leveled by wood processors, banned the export of raw logs. India is considering a ban on exports of iron ore to secure its mineral wealth for its fast-growing economy.
In 2007 and 2008, a number of countries, including Russia, restricted the export of grain as prices began to skyrocket.
While commodities analysts emphasized that there is no reason to fear another global wheat shortage, governments and companies worldwide are preparing for the worst.
In Egypt -- one of the biggest importers of wheat and a nation that experienced deadly violence in bread lines two years ago -- the government assured the public that it has a four-month supply of wheat and urged Russia to honor contracts it signed before the ban. In Europe, the United Kingdom's Premier Foods and Switzerland's two largest food retailers warned consumers that they may increase prices of products that contain wheat, from crackers to beer.
The Food and Agriculture Organization of the United Nations said this week that although the food-price index is 13 percent higher than it was a year ago, it is still 22 percent lower than its peak, in June 2008. “Fears of a new global food crisis are not justified at this point,” the FAO said in a report.