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Thursday, August 2, 2012

Russian and US drought sparks fears on a new food crisis + Drought turns half of US into Disaster area

Wheat prices have jumped more than 50% and corn prices more than 45% since mid-June as drought in Russia, the US and Australia have partly destroyed crops. Experts warn that a looming food crisis could hit global growth.
Russian grain prices reached record levels last week after the Government cut its 2012 harvest forecast to 86.5 million tons from an earlier estimate of 94 million tons. The move sparked fears the country could impose export restriction as it did in 2010.
Reduced crops could not only hit Russia’s exports, but it also speeds up the inflation rate, which the Russian Central Bank is struggling to bring down, says a report from HSBC. The inflation rate could reach 8% from the currently estimated 3.6%, HSBC analysts warn. It could force RCB to revise its interest rate by 100 points.
Russia, the world's second largest wheat exporter after the United States, plans to export between 13.5 million to 13.8 million tons of wheat for the season 2012-13. That's compared with an estimated 21 million tons in 2011-12, according to the Institute for Agricultural Market Studies (IKAR). Read More: Russian and US drought sparks fears on a new food crisis — RT

In the midst of one of the worst droughts in history, 218 counties were added to the US government’s list of natural disaster areas, putting nearly half of all counties in a state of agricultural catastrophe.
1,584 counties in 32 states are now designated primary disaster areas, according to the US Department of Agriculture. The department uses a weekly drought monitor to form its list. This week, the USDA found that nearly half of the nation’s corn crop and 37 percent of its soybean crop was rated “poor” or “very poor.”
Three quarters of the country’s cattle are in areas affected by the drought.
Counties that are considered a natural disaster area make its famers and ranchers eligible for federal aid, including low-interest emergency loans, the Associated Press reports. Read More

Large fields of corn (Reuters/John Sommers II)11.07, 19:50

Corn Climbs as US Cuts Harvest Forecast

Corn futures in the United States rose 2% after the government slashed its forecast for this year's harvest as drought hits parts of the Midwest.
RIA Novosti/Alexandr Kryazhev04.07, 13:472 comments

Russian wheat price reaches historic highs

Prices for Russian fourth-grade milling wheat skyrocketed due to the drought in the US and Latin America.

Scott Olson / Getty Images / AFP25.07, 22:397 comments

US drought might lead to food shortages and global unrest

Rising food prices and global unrest might ensue from this month’s worst US drought since the 1934 Dust Bowl, with 64 per cent of the country desperately hoping for rain.
America experiencing biggest disaster in history13.07, 02:1214 comments

USDA: America experiencing biggest disaster in history

More than half of the United States hosts areas considered natural disaster sites by the US Department of Agriculture following a ravaging dry spell that has left more than 1,000 counties in 26 different states destroyed.

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