MOSCOW, RUSSIA — Russia’s wheat prices reached a level usually not seen at this time of year, leading to concerns of food price inflation and possible government reaction, Bloomberg reported.
Prices in August hit the highest level in at least a decade. Usually prices drop at this time of year as the new harvest arrives. Farmers are holding grain back because they are afraid of making bad deals under the export tax, the news agency said.
Russia started a flat tax on wheat exports in February and switched to floating duties in June. The floating duty increased to $31.70 a tonne this week, compared with $30.40 last week.
Also of concern is the size of the new harvest. The US Department of Agriculture expects wheat production of 72.5 million tonnes, a 15% drop from its July forecast. Russia’s Agriculture Ministry estimates the crop at 81 million tonnes.
The average wheat yield is lower than last year, according to data from the ministry.