Aug. 3 (Bloomberg) -- Forty Russians have died to date as wildfires rage in central Russia, while 58 drowned in the last 24 hours trying to escape a heat wave that has scorched crops and driven grain prices higher.
Firefighters are battling 529 blazes that cover 172,372 hectares (666 square miles), the Emergency Situations Ministry said on its website today. Since the start of the fire season, 648,555 hectares have burned and more than 155,000 emergency personnel have been deployed in suppression efforts, the ministry said.
Since the start of the year, 3,472 people have drowned in Russia, including 1,600 in July, the hottest in European Russia in 130 years, the ministry said.
Russia’s worst drought in at least 50 years, which already drove wheat prices to the biggest jump since 1973, will continue in August and threaten more crops and winter-grain sowings, the state Hydrometeorological Center said on its website. Rainfall last month in Central Russia and along the Volga River was 10 percent to 30 percent of the long-term average, the center said.
Agriculture accounts for 3 percent to 4 percent of Russia’s gross domestic product, according to Moscow-based VTB Capital.
Heat and drought forced the government to declare a state of emergency in 27 crop-producing regions. President Dmitry Medvedev yesterday declared a fire-related state of emergency in seven regions, mobilizing army units to join crews in battling the flames.
“This is the first time in 50 years we’ve seen the combination of such a long period of abnormal heat and both atmospheric and soil drought,” the Hydrometeorological Center said. Russia’s Grain Union has said the drought is the worst since record-keeping started 130 years ago.
Temperatures in most parts of central Russia will be 8 degrees Celsius above average through Aug. 12, rising as high as 42 degrees Celsius (108 degrees Fahrenheit), according to the state weather service. “High” or “extreme” fire danger will persist in the central and Volga federal regions, where most wildfires are burning, at least to Aug. 5, the service said.
Medvedev will hold a fire-protection meeting tomorrow with the heads of government agencies that operate “high-risk” facilities, such as military and security installations, according to the Kremlin website.
A forest fire near Kolomna, 100 kilometers southwest of Moscow, destroyed part of a naval military base, the Investigative Committee of the Prosecutor General’s Office said. The fire, which was put out July 30, destroyed the headquarters, 13 warehouses with aviation equipment and 17 storage areas with vehicles, it said.
At least eight regions hit by the drought are experiencing water-supply problems, Rossiiskaya Gazeta reported today. The Oka River, a tributary of the Volga, is 30-40 centimeters below “dangerous” levels. Navigation problems have been reported on the Volga since June, the government’s newspaper of record said.
Wheat futures fell in Chicago on bets that a five-day rally to a 22-month high was overdone. The Russian Grain Union said yesterday that exports may fall as low as 11 million metric tons in the marketing year that started July 1 under a “worst-case scenario,” from 21.5 million tons last year.
Russia’s Agriculture Ministry cut its 2010 grain harvest forecast to between 70 and 75 million tons, RIA Novosti reported, citing Alexander Belyaev, a deputy minister. The ministry’s previous forecast was for about 85 million tons, compared with last year’s output of 97.1 million tons.
Russia should ban grain exports temporarily to allow suppliers to cancel contracts as the drought threatens to leave local demand unmet, Nikolai Demyanov, deputy chief executive officer of Glencore International AG’s local unit, said by e-mail today.
Chris Weafer, chief strategist at UralSib Financial Corp. in Moscow, said in a note to investors today that rising global grain prices should have a “small impact” in the short term on Russian producers and consumers “as the state will remain very active and interventionist in keeping domestic prices stable.”
Industrial output may also suffer in July and August from extreme weather, especially as major automakers take breaks because of extreme weather conditions, according to VTB Capital. OAO AvtoVAZ, the nation’s largest automaker, suspended production through Aug. 8 because of record heat in Togliatti, southern Russia.
The government may spend more than the 5 billion rubles ($166 million) already earmarked to help the country rebuild from the fires, Prime Minister Vladimir Putin said yesterday.
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