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Drought in Russia might result in food crisis

Wildfires, extreme heat and the worst drought in 50 years threaten Russia’s plans for the upcoming sowing season. The result might be the worst food crisis in the world since 2008.

“This is the first time in 50 years we’ve seen the combination of such a long period of abnormal heat and both atmospheric and soil drought,” Bloomberg cited the Hydrometeorological Center of Russia

Bloomberg also reports that the upcoming planting of wheat might be hampered by dry soil. Russia’s grains union on the other hand claims that the drought is the worst on record for 130 years. Harvests had to be halted due to the extreme heat and wildfires affect 172,372 hectares (666 square miles), with 648,556 hectares already consumed by fire, the Emergency Situations Ministry said according to Bloomberg.

Wheat prices jumped to a 37-years high in Chicago trading. The Russian Agriculture Ministry cut its 2010 grain harvest forecast to 70 million to 75 million metric tons. Prices in Russia rose 19% last week, a faster pace since the world’s food crisis in 2008.

Rising prices encourage farmers to stockpile grain, some are delaying sales and suspending supply, Bloomberg reported according to the Russian Grain Union, representing the country’s biggest producers and traders, and International Grain Co, the Russian unit of Glencore International AG.

“We would need some really good rains to create solid moisture for crops to germinate in, or even for farmers to even bother to plant,” Bloomberg cited Keith Flury, an analyst at F.O. Licht in Ratzeburg, Germany. (BBJ)