In a major announcement, Russian Prime Minister, Vladimir Putin declared in cabinet meeting that Russia will be halting the international export of wheat from 15th August to December 31. This move is for lessening the prices at home as Russia is hit by worst drought in decades.

This decision reflects the concern of Russia to have stable and better prices for the home population, even if it costs the global presence of the nation in the grain market.

After this announcement, the wheat futures in Chicago and Europe propelled up to 10%, reaching a two-year high instantly. Also, following this export pause, even UN food agency has alarmed of a grave situation on world food markets that will be experienced soon.

This announcement is somewhat contradicting, as in spite of knowing that almost 10 million hectares of land in Russia has been destroyed by drought recently, Deputy Agriculture Minister had affirmed that the exports will not be affected. It is known that last year 21.4 million tonnes of wheat was exported and the level was expected to remain same this year as well.

The most important and rather surprising part of the announcement was when Putin specified that even Kazakhstan, which is a major grain producer, should follow the same rule, as it is having a joint partnership in regional customs union with the later.