MOSCOW (Commodity Online) : Facing its worst drought in recent history that threatened food price hikes, Russia said it will prevent speculators driving up food prices and ensure affordable food staples across the nation.
Speaking at the State Council here, Russian president Dmitry Medvedev said speculators were driving up prices for certain foods such as buckwheat, a Russian staple for centuries.
He said the situation should be kept under control by the government and regional leaders.
Why Chana prices continue to be bearish? Get to understand India’s pulses market with Commodity Online Info Service
Medvedev said Russia, which was the world's third largest Wheat exporter before this year's poor harvest, would seek to regain its position on world markets.
"In recent years we returned Russia the status of a leading world exporter of grain and we shall move forward," he said. "Despite the unusual heat, despite the drought, our country has enough reserves of grain."
Russia's summer drought will Lead to a price shock for three to six months though inflation should be 7.0 percent for the year, analysts said.
Russia's grain harvest is expected to fall to 60-65 million tonnes this year after what the state weather agency says is Russia's worst drought in over a century from 97 million tonnes harvested in 2009.
Russia set an ambitious target to increase the harvest to 85-90 million tonnes of grain in 2011. Medvedev said there was enough grain with carryover stocks of some 21-25 million tonnes.
Hot weather is expected in the southern part of European Russia, the country's main breadbasket.
Russia, which usually enjoys seasonal, harvest-time deflation in late summer and early autumn, has this year seen prices surge as people stock up on staples after the drought killed off around a third of the grain crop.
The poor harvest in the republics of the former Soviet Union has send world prices for grains soaring as some governments such as those in Russia and Ukraine stopped or curbed exports.
But Ukraine's Wheat exports rose to 430,000 tonnes in August from 225,000 tonnes in July despite informal export limits introduced by the Ukrainian Customs Service.
