Russian Wildfires' Death Toll Rises to 50; Drought May Force Export Ban

Wildfires in Russia have killed 50 people to date as record heat and drought continue to plague the heartland. There are “signals” that the government may ban grain exports as early as Aug. 10, the Grain Union said.

Fires concentrated in central Russia and the Volga River region have scorched 712,412 hectares (2,751 square miles), an area about three times the size of Luxembourg, the Emergency Situations Ministry said in an e-mailed statement today. Crews are battling 589 fires on 195,834 hectares, the ministry said.

Agriculture is the hardest hit part of the economy, with the government declaring a state of emergency in 28 crop- producing regions and grain yields down 20 percent this year. Agriculture accounts for about 4 percent of gross domestic product, according to Moscow-based VTB Capital.

Russia may temporarily ban grain exports starting as early as next week because of the drought, Interfax reported today, citing an unidentified government official. The country may halt outbound shipments of wheat, barley, corn, rye and flour, the Moscow-based news service said.

Oleg Aksyonov, spokesman for the Agriculture Ministry, said by telephone that he couldn’t confirm or deny the report.

Arkady Zlochevsky, president of the Grain Union, said by telephone that a rush by the government to impose a ban would hurt the market because traders need more advance warning in order to meet contracts.

Buyers ‘In Shock’

Wheat extended a rally to the highest price in 23 months on concern that the worst drought in at least half a century in Russia, the third-biggest grower, will force the country to curb exports. Buyers of the staple are “in shock,” according to Australia’s CBH Group.

Dry and hot weather with “high” and “extreme” fire danger will persist in most areas of European Russia at least through Aug. 7, the state Hydrometeorological Center said on its website today. Fire danger will also be high in the Ural Mountains and the Tomsk region in Siberia, it said. Temperatures broke all-time records in five Russian cities yesterday.

Russian President Dmitry Medvedev yesterday fired senior navy officers for “criminal negligence” after a base near Moscow was destroyed by fire.

The aviation supply base near Kolomna, 100 kilometers (62 miles) southwest of Moscow, burned on July 29, destroying the headquarters, 13 warehouses and 17 parking lots with vehicles, according to the Investigative Committee of the Prosecutor General’s Office.

The officers in charge of the base “failed to perform their duties” when “a fire that was spreading rather slowly wasn’t contained, and the base leadership were nowhere to be found,” Medvedev said.

To contact the reporters on this story: Patrick Henry in Moscow at phenry8@bloomberg.net; Maria Kolesnikova in Moscow at mkolesnikova@bloomberg.net

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