Russian Wheat Export Ban shows that when Push comes to the Shove its Every Country on its Own

Russia’s Prime Minister Putin has put a summary ban on Wheat Exports from the country with immediate effect till the end of the year.This has led to global wheat and rice prices increasing at an extremely sharp pace.Wheat prices have almost doubled in the month of July with other grain prices also increasing in sympathy.Though this had led to a bonanza for other major Wheat exporters such as Australia and USA,it has brought misery to the poor citizens in wheat importing countries of Philippines and Indonesia.

Increased Food Prices have led to growing distress around the world.Though food stocks are high all over the world,Wheat Prices are spiraling up on  anticipation of reduced global supply.Wheat contracts between Asian mills and Russian suppliers have been canceled.Its only a matter of time before prices in the Asian countries go up as higher priced wheat has to be procured.

Every Country on its Own

While Globalization has been touted as the cure for all ills,it has its limitations.The increasing demand and shrinking supply of resources has led to increasing prices of commodities.Coupled with that the advent of long only funds in buying up commodity futures has led to even higher artificial prices.The pernicious effect is being felt by the world’s poorest citizens.When Push comes to the Shove,every country looks after its  own.Russia has stopped exports as prices increased domestically without a care about the rest of the world.This is not only specific to Russia but all the world’s countries where nationalism reigns supreme.With most of the worlds commodities approaching “Peak Supply” it is a worrying thought.

Surging wheat price fuels trade, inflation fears – Reuters

Suppliers of Russian wheat to Asia are edging nearer to cancelling contracts after Moscow’s ban on grain exports, forcing buyers to turn to alternative origins as U.S. wheat futures soar to a 23-month high. There was no immediate panic reaction from top Asian importers because global stockpiles were ample, but the rally could stoke fears of food inflation in key buyers with a near doubling of prices on the Chicago Board of Trade Wc1 since lows in June, analysts and traders said on Friday.

U.S. wheat futures jumped more than 6 percent, taking this week’s gains to more than 26 percent in a buying frenzy sparked by the move to temporarily halt grain shipments from Russia, the world’s third-largest exporter.