More on Putin's Russian Grain Export Ban

http://www.google.com/hostednews/afp/article/ALeqM5jn0ijb78X08SnsMVlnYIHZHgI5XA
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"I would like to inform you about one more decision," Russian Prime Minister Vladimir Putin told his cabinet at the end of a government meeting as he prepared to drop one of his trademark bombshells.

Top wheat exporter Russia, Putin said, would from August 15 ban the export of grain until December 31 to keep prices down at home amid the worst drought to hit the country in decades.

The announcement catapulted wheat futures in Chicago and Europe up 10 percent to new two-year highs and prompted a warning from the UN food agency of a "serious" situation on world food markets.

While markets knew the drought had destroyed 10 some million hectares of land in Russia, days earlier a deputy agriculture minister had given assurances exports would be at a similar level to last year's 21.4 million tonnes.

As if that was not enough, the decree signed by Putin stipulated that fellow major grain producer Kazakhstan should also match Russia's move due to their joint membership in a regional customs union.end quote

This annoucement by Putin and caused by an incredible drought and fire and above 100 degree weather and smoke in Moscow and the surrounding area might have the same effect as Australia a few years ago that appeared to trigger the recession in real food terms worldwide. Since the U.N is saying it is very serious this tends to cause panic chain reactions as people starve around the world who can't afford to buy grain at higher prices in any form. I have watched this panic cycle interact with all other financial cycles and when the worldwide grain supply goes from 120% to 130% like it was before 2007 and goes to 100% of the global need or below it tends to cause all kinds of chaos especially in poorer nations. Somehow (I haven't totally figured out how) it goes up the food chain until all nations seem to be affected in recessionary ways. So, it appears having a surplus of food (grains) available and lower prices seems to be necessary for the world economy to work without going into recession or depression. Of course there are many other factors like the price of oil and productivity of individual nations and other things but it appears it all starts with poor people being able to afford to eat worldwide.