Russia banned grain exports for the rest of the year on Thursday after a severe drought and wildfires destroyed 20 percent of its wheat crop. The price of wheat, which has already jumped 70 percent on world markets this summer, rallied further on the news, according to AP. Among the world's largest exporters of grain, Russia said the ban will run from Aug. 15 through Dec. 31 and could even be extended into next year if necessary. The higher wheat price, which was up another 8.3 percent on the Chicago Board of Trade on Thursday, may mean that Americans and Europeans pay slightly more for bread. But the bigger burden will fall on people in the Middle East, Africa and parts of Asia, analysts say _ because commodity prices make up a larger part of their residents' food bills. Experts say the United States, Argentina and Australia will gain the most from the spike in wheat prices, because Canada and the European Union are not expected to have abundant harvests this year. Prime Minister Vladimir Putin announced the ban _ which in addition to wheat and wheat flour, covers barley, rye and corn _ at a Cabinet meeting Thursday, saying it was necessary even though Russia has sufficient reserves. «We need to prevent a rise in domestic food prices, we need to preserve the number of cattle and build up reserves for next year,» he said during the televised meeting. «As the saying goes: reserves don't make your pocket heavy.» The ban was imposed despite a claim two days earlier by a deputy agriculture minister, Alexander Belyayev, that Russia would continue to export because national reserves were sufficient to meet domestic demand and allow for exports. Putin said Russia would decide after the harvest whether to extend the ban into 2011. Regardless of the ban, Russian farmers have little incentive to export _ grain prices have been rising even faster in Russia than on world markets. Most of the damage to Russia's wheat crop has been caused by the drought, one of the worst in decades as much of the country suffers through the hottest summer since record-keeping began 130 years ago. But wildfires raging through western Russia have spread into farmland and there are fears that more fields will be lost.
