Wheat Prices Up after Russia Export Ban

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Wheat prices have spiked after a recent decision by Russia to ban grain exports for the remainder of the year due to a severe drought and wildfires having destroyed 20 percent of its crop.

The ban, announced by Prime Minister Vladimir Putin announced the ban at a Cabinet meeting on Thursday, could translate into higher prices for bread, cereal, and other foods this fall.
    
The higher prices are expected despite the fact wheat harvest in the rest of the world are projected to be very strong.

"Russia is the fourth largest exporter of wheat around the world in the 2009 crop," Chris Hurt, a professor of agricultural economics at Purdue University, told NPR.

Hurt said the world's poorest nations will be hit the hardest by the price increase.

"The ones are really going to be affected: Egypt, Algeria, Nigeria, Morocco and Iraq, so really some of the neighboring countries in Africa and on into Iran," Hurt explained.

"The other thing that's really difficult for these countries is they have low incomes, generally 5 to 15 percent of incomes of people here in the United States," he said. "So when a basic food item like wheat goes up dramatically in price, it really affects their ability to pay for that."

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