Wheat prices climbed to a two-year high yesterday and food producers' shares fell as inflation fears stalked world markets and grain traders cancelled contracts into Asia after Russia's ban on exports.
Vladimir Putin, the Russian prime minister, moved on Thursday to halt exports of grain and flour from August 15 to the end of the year amid the country's worst drought in more than a century.
The country's railroad monopoly said yesterday it would stop loading grain for export as of today.
The speed of the move shocked Russia's Grain Union, the country's main industry lobby group, which pleaded with the government yesterday to delay the ban until September 1.
Russia was the world's third-largest wheat exporter last year but is set to slide down the table.
Kazakhstan, Ukraine and the EU are also hurting from poorer crops due to adverse weather, the International Grains Council said.
"Effectively, a big chunk of the global market is offline," said Matthew Kaleel, a commodities specialist at fund manager H3 Global in Sydney. "There's going to be something like 5 million tonnes that aren't going to be available for export."
Wheat for December delivery rose 1 per cent to US$8.2325 a bushel on the Chicago Board of Trade after climbing as high as $8.68, the most since August 26, 2008. The contract rose 7.9 per cent on Thursday after Russia announced the export ban.
Wheat has surged 65 per cent in Chicago since the start of last month. Planting of winter wheat harvested next year may increase because of the higher prices, said Doug Whitehead, a commodity analyst at Rabobank in London.
The rise has revived memories of the price surge in early 2008, when US wheat rose above $13 a bushel, helping to fuel food inflation and leading to riots in many countries.
Food companies such as Nestle and Danone saw their shares decline in value yesterday.
But analysts played down the link saying global stocks had grown steeply in the past couple of years with the two biggest ever crops.
"Stocks are close to 50 per cent higher today [than early 2008]. You had a completely different scenario then," said the Barclays Capital analyst Sudakshina Unnikrishnan.
Persistent high prices could, however, drive fear of food inflation in key buyers such as Indonesia and the Philippines, analysts said.
"If prices remain elevated for a sustained period, the probability of upward adjustment in retail price of wheat and its derivatives goes up," Barclays Capital said. "However, food prices tend to be politically sensitive so we can expect some action from Asian governments."
The top consumers China and India are largely protected from rising prices by their wheat reserves.
Trading companies that have sold Russian wheat to millers in Asia are considering declaring force majeure on supply contracts that could involve up to 1 million tonnes.
"If the contract says Russian wheat, it is straight away force majeure," said one trader with an international company in Singapore, referring to terms in commodity deals that remove liability for unforeseen events that hinder trade.
* with Reuters and Bloomberg
Nepotism is the name of the game
Salman Khan’s father, Salim Khan, is one of Bollywood’s most legendary screenwriters. Through his partnership with co-writer Javed Akhtar, Salim is credited with having paved the path for the Indian film industry’s blockbuster format in the 1970s. Something his son now rules the roost of. More importantly, the Salim-Javed duo also created the persona of the “angry young man” for Bollywood megastar Amitabh Bachchan in the 1970s, reflecting the angst of the average Indian. In choosing to be the ordinary man’s “hero” as opposed to a thespian in new Bollywood, Salman Khan remains tightly linked to his father’s oeuvre. Thanks dad.
UAE v Gibraltar
What: International friendly
When: 7pm kick off
Where: Rugby Park, Dubai Sports City
Admission: Free
Online: The match will be broadcast live on Dubai Exiles’ Facebook page
UAE squad: Lucas Waddington (Dubai Exiles), Gio Fourie (Exiles), Craig Nutt (Abu Dhabi Harlequins), Phil Brady (Harlequins), Daniel Perry (Dubai Hurricanes), Esekaia Dranibota (Harlequins), Matt Mills (Exiles), Jaen Botes (Exiles), Kristian Stinson (Exiles), Murray Reason (Abu Dhabi Saracens), Dave Knight (Hurricanes), Ross Samson (Jebel Ali Dragons), DuRandt Gerber (Exiles), Saki Naisau (Dragons), Andrew Powell (Hurricanes), Emosi Vacanau (Harlequins), Niko Volavola (Dragons), Matt Richards (Dragons), Luke Stevenson (Harlequins), Josh Ives (Dubai Sports City Eagles), Sean Stevens (Saracens), Thinus Steyn (Exiles)
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
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UAE currency: the story behind the money in your pockets
How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
- Submit their request
What are the regulations?
- Fly it within visual line of sight
- Never over populated areas
- Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
- Users must avoid flying over restricted areas listed on the UAE Drone app
- Only fly the drone during the day, and never at night
- Should have a live feed of the drone flight
- Drones must weigh 5 kg or less
The specs
Engine: four-litre V6 and 3.5-litre V6 twin-turbo
Transmission: six-speed and 10-speed
Power: 271 and 409 horsepower
Torque: 385 and 650Nm
Price: from Dh229,900 to Dh355,000
Tonight's Chat on The National
Tonight's Chat is a series of online conversations on The National. The series features a diverse range of celebrities, politicians and business leaders from around the Arab world.
Tonight’s Chat host Ricardo Karam is a renowned author and broadcaster who has previously interviewed Bill Gates, Carlos Ghosn, Andre Agassi and the late Zaha Hadid, among others.
Intellectually curious and thought-provoking, Tonight’s Chat moves the conversation forward.
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