August 6, 2010

Russia halts grain exports

Russian premier Vladimir Putin has ordered a halt to all exports of wheat and other grains from August 15, raising the stakes severely in the crisis over wheat supplies.

"This is very serious. It's a desperate situation because it has caught everybody off guard. We're not facing the situation of two years ago but there is a risk of destabilising panic," said Abdolreza Abbassanian, chief grain economist at the UN Food and Agriculture Organization.

The world faces an inflationary time bomb as shortages of food threaten to push prices to fresh all-time highs. A variety of bad weather conditions across the world has sent the price of staples including wheat, and pork to fresh highs in recent weeks. Yesterday's decision by the Russian government to ban the wheat export to protect home consumers saw grain prices jump 8% on the day, on what was already a two-year high.

The scale and speed of cuts to the NHS became apparent yesterday as confirmed job losses this year reached 11,000 and union leaders threatened to take the government to a judicial review over the pace of reform. Unison, the biggest public sector union, accused ministers of "conning" voters with claims that they were protecting frontline services.