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This year the weather is not friendly to humans. Heavy rains in Brazil, monsoon rains in Indonesia and Australia, draught in the US, Kazakhstan, Ukraine and Russia have caused the decrease of harvest volumes. Usually the UN Food agency does not publish its reports but when the experts noticed an upsurge in prices in July they rang an alarm bell. The prices in May all over the world were already alarming, Elena Tyurina, general director of the Agricultural Marketing Institute says.
"Preliminary forecasts of this year’s harvest are of course worse than last year’s forecast. A decline in gross grain harvest is expected, that has already led to wheat prices having grown by 30-35% in the period since May of this year depending on the region. After wheat an increase in flour prices is expected."
According to Deputy Prime Minister Arkady Dvorkovic, despite the alarming forecasts Russia has no reasons to limit its grain exports. However he added that in 2013 the introduction of export duties is possible. But food crisis is not threatening Russia, Elena Tyurina says.
"There won’t be any food products shortages in Russia. It is possible that price will grow by more than 15% but in that case the consumption volume will decrease and the population will switch to the consumption of less expensive products. Russia is among the top five global grain exporters. This year the volume of exports can be smaller because of the smaller volume of harvest."
The food crisis will mainly hit African countries, executive director of the SovEcon analytical center Andrei Sizov says.
"The poorest countries suffer the most from such an upsurge in prices on agricultural products. One thing is in the US where a consumer spends less than 10% of his income on food. In Russia a consumer spends 30% on food. But African countries, where people often spend 60-70% of their income on food, is a different story. Price hikes may stir disorders we saw in 2007-2008."
According to Deputy Prime Minister Arkady Dvorkovich, as of now Russia does not have any reason to switch to selling grain from its strategic reserve. This helps to keep grain prices stable. By now more than 37 million tons of grain have been harvested in Russia in comparison with 38.7 million tons in the same period last year. Russia’s chances to contribute to the prevention of a new food disaster look good.
