Russian Wheat Squeeze: Bread Prices May Rise Worldwide
Date
12/21/2024 6:15:25 AM
(MENAFN- The Rio Times) Russia, the world's top wheat exporter, has slashed its export quota by 63% for early 2025. This move will ripple through global food markets, potentially affecting bread prices worldwide. The quota now stands at a mere 10.6 million metric tonnes, down from 29 million last year.
Why the drastic cut? Russia faces a perfect storm of agricultural challenges. A poor harvest in 2024 yielded only 83 million tonnes of wheat, compared to 92.8 million in 2023. Despite this drop, exports surged to record levels, depleting domestic stocks. Now, with food inflation hitting 8.5% in October 2024, the government is prioritizing local needs.
Russian farmers are feeling the pinch. Low wheat prices and high costs are pushing many to switch to more profitable crops like peas and sunflowers. This shift could further tighten global wheat supplies in coming years.
The ruble's weakness compounds the issue. Trading at 113 to the dollar in late 2024, it makes exports more attractive but raises input costs. In response, Russia's central bank hiked interest rates to a staggering 21%.
For global markets, this spells uncertainty. Major importers like Egypt and Turkey may scramble for new suppliers. Other exporting nations could seize the opportunity to expand their market share. Bread prices in many countries might rise as a result.
This situation underscores the delicate balance of global food security. As Russia reins in its wheat exports, the world must adapt to a new reality in grain trade. The coming months will reveal the full impact of this policy shift on international markets and dinner tables alike.
Russian Wheat Squeeze: Bread Prices May Rise Worldwide
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