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The effects of Russia’s heat wave

The extreme heat wave across Russia over the last couple of months continues to take its toll, as fresh wildfires break out. A new wave of fires has just swept through villages in southern Russia, destroying more than 400 homes in the Volgograd and Saratov provinces. At least 6 people are reported to have died, adding to death toll of 54 other people killed in fires during July and August.

And the Russian agriculture ministry now estimates the severe drought has destroyed approximately one quarter of crops, worth an estimated 32.7 billion roubles, though some experts believe the amount could be even higher. Whatever the exact loss, the Russian government decided to protect domestic supplies by introducing a ban on grain exports in August.

The ban was not enough to stop Russian consumers from worrying, as food prices have climbed. On some essential food products, prices soared 30% in August. Under Russian trade law, the government can fix a maximum price for 90 days with rises of 30% in any 30-day period. But so far, the government has chosen not to impose any controls. Officials are eager to stress there is no danger of shortages and blame people stockpiling on cereals such as buckwheat for the soaring costs of such food. One consumer goods analyst agreed that approximately 40% of the rise in prices could be blamed on “panic buyers or speculators”, while the remaining 60% was attributable to the drought.

Whatever the reason, this is a worrying time for Russia’s poor, as they wait to see how the cost of food will be affected over the coming months. And it isn’t only the Russian people who are suffering from the uncertainty. The rising wholesale price for grain is already causing instability in several countries which rely on grain imports. Soaring bread prices have sparked recent riots in Mozambique, when 7 people died, including 2 children, as police opened fire on protestors. And in Egypt, one man died when a fight broke out in a bread queue. Egypt imports 40 per cent of its wheat and in the past, has been heavily dependent on supplies from Russia. Long queues for subsidized bread form daily in the streets, as poor Egyptians often have to wait 3-4 hours for this basic necessity. According to estimates, 220 million loaves of subsidized bread are consumed each day in Egypt, so any extra cost of grain has an impact.

Wheat prices are set to rise further following an announcement from the Russian government today (3rd September) that its export ban on grain may not be lifted until after next year’s harvest. Russia is the world’s third largest exporter of grain; the country sold one quarter of its annual production (97 million tonnes) in 2009 to other countries. The United Nations’ Food and Agriculture Organisation (FAO) has tried to calm fears by pointing out there have been plentiful crops around the world for the last two years and other sources of grain will be able to meet global demand. The FAO expects prices to settle. For the poor on the streets of Russia, as well as those struggling in other countries, it is to be hoped these expectations prove correct, because a decrease in the cost of cereal and bread cannot come too soon.

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