The drought in Russia, Ukraine and Kazakhstan is severe. With almost no rain since May 1st, current temperatures in the high 30s and high winds, yields have been dramatically reduced. It’s amazing that Russia was the world’s third largest wheat exporter in 2009 but has completely withdrawn from the 2010 market due to production short-falls.
In 2009, Kazakhstan rose to be the world’s sixth largest wheat exporter but they might also disappear from the export market this year as any surplus is likely to be siphoned into Russia who will probably need to import grain.
The record rainfall and floods in western Canada and parts of Europe have also put pressure on declining global production, sending the price of a bushel in Chicago and Kansas City from about US $4 two months ago to US $6.34.
Prices have shot up around 50 per cent since June, the most dramatic rise in more than 30 years, and bread, pasta and breakfast cereal are all likely to Increase in price.
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