PortandTerminal.com, March 29, 2020
MOSCOW – Russia is running out of wheat, buckwheat, another grain food staples in the country. The country has enormous currency reserves, so there is little chance that people will starve, but it is making things difficult for local mills and manufacturers.
Rosneft is reporting that “The Russian Union of Flour and Groats Enterprises warns that high grain prices have seriously worsened the financial situation of most of its members, which ultimately threatens a shortage of flour in the country”
Despite good harvests last year, the largest regional producers of flour are warning that they have just 2 to 3 weeks worth of flour left in the country.
What’s causing the shortage?
A combination of the coronavirus pandemic and the oil price war with Saudi Arabia has caused the Russian ruble to depreciate severely. Today, it costs almost 79 rubles to purchase one American dollar – on January 1st of this year it cost just 62 rubles. That’s a 27% increase.
The depreciation of the Russian ruble makes it much more expensive for domestic mills to purchase wheat and other grain staples.
Rosneft says in their report, “Amid the general crisis and the depreciation of the ruble, the financial situation of most enterprises in the industry is rapidly deteriorating. The largest regional producers of flour, despite the high yield of last year, have a stock of raw materials at the level of only two to three weeks”
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