Tuesday, August 17, 2010

Aginflation Coming As Russia's Grains in Trouble; U.N.: Risk of Destabilising Panic

Please take a look at the performance of the DBA ETF since June:

As it turns out, President Putin banned all Russian grain exports due a severe drought. In particular, wheat is expect to raise further.

We track all commodity ETFs live here.

Abdolreza Abbassanian, chief grain economist at the UN Food and Agriculture Organization, says that "This is very serious," "It's a desperate situation because it has caught everybody off guard. We're not facing the situation of two years ago but there is a risk of destabilising panic."

Putin said it was a "temporary ban on wheat, corn, barley, rye, and grain products until the end of the year due to abnormally high temperatures", and added that Russia needs to cap domestic food prices and build its own reserves.

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