2. Drought pushes up food prices in Russia

Drought pushes up food prices in Russia
PressTV
Wed Aug 25, 2010 9:12PM



Inflation in Russia was 0.2 percent last week, much higher than the figure before the drought. It is the third week in a row that prices have soared by this degree, the state statistics office announced.

The government said Tuesday that the inflation rate this year would now be higher than the previous estimate of 6.0-7.0 percent due to the drought but would still be lower than the 2009 figure of 8.8 percent.

The price of Russian food staple buckwheat has increased by 8.6 percent in the space of the week. Flour prices rose 3.3 percent in the week, while milk was up 1.3 percent. The price of bread increased 0.9 percent.

Last month, Russia experienced the hottest July ever recorded. The intense heat and drought affecting central Russia dried out trees and peat marshes, which caught fire, burning forests, fields and houses across a massive region.

The wildfires destroyed one quarter of the country's crops and prompted the government to impose a ban on grain exports to protect domestic supplies. The decision has resulted in sharp fluctuations in grain prices in agriculture commodities markets, stirring up fears that another food crisis may be looming.