is the food crisis upon us, page-2

Looks like the fluky weather is ongoing.

From Agrimoney.com

"Drought to 'near halve' Russia's grain exports
Russia's worst drought in 130 years will force its grain exports down by nearly one-half, SovEcon has forecast, flagging the potential for the Kremlin to impose restrictions on shipments.

The forecast from the influential analysis group sent prices higher once more on international markets, with wheat for September adding 2.2% to $6.08 a bushel in Chicago as of 12:15 GMT.

In Europe, Paris wheat for November added 3.6% to E187.25 a tonne, its highest since August 2008, with London wheat for November hitting a full-two-year high of 139.00 a tonne before retreating to 137.00 a tonne, up 2.9% on the day.

SovEcon estimated Russia's grain exports falling to 12m tonnes in 2010-11, from 22m tonnes the year before.

Record temperatures

The forecast comes a day after the Moscow-based group, which has been at the forefront in monitoring Russia's harvest woes, cut its estimate for the grain harvest for the fourth time in less than a month, warning that production may fall below 70m tonnes.

That put a potential 30% drop in output on the cards, following a heatwave which has driven temperatures to record highs in some areas, and forced 23 regions to declare a state of emergency.

SovEcon on Wednesday said that Russia's wheat exports would fall to 11m tonnes from the record 18.2m tonnes reached in 2009-10.

Exports of barley, whose production has been depressed by smaller sowings as well as drought, may slump by more than 80% to 500,000 tonnes.

Export curbs?

Russia entered 2010-11 with rich stocks, of 20m tonnes, left over from bumper harvests in the two previous years, providing some buffer against this year's poor result.

However, nearly half of the inventories are held in government stores, and are likely to be directed solely at domestic users. The livestock farmers that Russia is attempting to champion, to cut its huge imports of meat, are reported as slaughtering animals for fear of a lack of feed during the winter months.

The potential squeeze on feed grain "may force the government to impose [export] restrictions if active exports continue in the summer and autumn", SovEcon said.

The group added that shipments to more distant buyers, such as Bangladesh, Indonesia and Latin America, are likely to shrink the most.

Exports would remain strongest to countries, such as Egypt and the Middle East, where relative geographical proximity enhances Russia's competitiveness because of lower shipping costs."