Russia, not known for being a hot place, has been having an extended heatwave. Typically in Moscow, average peak July and August temperatures are 22 degrees celsius but this year all records have been broken and on July 29th reached 39.2 or 100 degrees fahrenheit. This has led to droughts, tinder dry conditions and of course fires dramatically reducing the grain harvest.
Russia’s response has been an export ban on grains in order to keep the price of bread and other staples low. Some have been worried that this may lead to a rerun of 2008 when commodities like grains exploded in price. But Ambrose Evans-Pritchard kicks that possibility into touch with these points from his article today;
“ . . .remember, there was a global wheat glut until six weeks ago. Stocks are at a 23-year high. Prices are barely more than half the peak in 2008. The US grain harvest is bountiful; Australia, India, Argentina look healthy. The Reuters CRB commodity index is no higher now than in April. Last week’s commodity scare looks like an anaemic version of the blow-off seen in the summer of 2008“.
And don’t rule out the increasing impact of research (briefly touched on below) that shows that grains are inimical to the human diet which could turn agricultural economics upside down.