By Denis Dyomkin
SARATOV, Russia, Sept 2 (Reuters) - President Dmitry
Medvedev ordered law enforcement agencies on Thursday to prevent
speculators driving up food prices after the worst harvest in
years and pledged help to ensure affordable food staples.
Russia's leaders are worried that recent price rises for
staples such as flour, buckwheat, pasta and meat following the
worst drought in at least a century could undermine the
Kremlin's support ahead of the 2012 presidential election.
Russia's summer drought will lead to a "price shock" for
three to six months though inflation should be 7.0 percent for
the year, central bank first deputy chairman, Alexei Ulyukayev,
told a banking conference. [ID:nLDE6810XG]
Medvedev, speaking to a state council of senior government
and regional officials, complained that speculators were driving
up prices for certain foods such as buckwheat -- a Russian
staple for centuries.
"The speculators need to be caught," Medvedev said at the
meeting in Saratov, a city on the Volga river in an agricultural
region hit by the drought. "There are no objective reasons for
the current changes in price" for food products.
"The situation should be kept under control by the
government and regional leaders... If the situation changes I
will take the decision to ensure our citizens have quality and
affordable food... This is a priority for the state."
Russia's grain harvest is expected to fall to 60-65 million
tonnes this year after what the state weather agency says is
Russia's worst drought in over a century from 97 million tonnes
harvested in 2009.
Medvedev said Russia, which was the world's third largest
wheat exporter before this year's poor harvest, would seek to
regain its position on world markets.
"In recent years we returned Russia the status of a leading
world exporter of grain and we shall move forward," he said.
"Despite the unusual heat, despite the drought, our country has
enough reserves of grain."
Agriculture Minister Yelena Skrynnik set an ambitious target
to increase the harvest to 85-90 million tonnes of grain in
2011. Medvedev said there was enough grain with carryover stocks
of some 21-25 million tonnes. [ID:LDE6810Z2]
Hot weather is expected in the southern part of European
Russia, the country's main breadbasket, on Sept. 2-4, with
sporadic rains, the country's weather forecasting service said
on Thursday. [ID:nLDE68109L]
Russia, which usually enjoys seasonal, harvest-time
deflation in late summer and early autumn, has this year seen
prices surge as people stock up on staples after the drought
killed off around a third of the grain crop.
Medvedev has toured villages, dairy farms and meat
processing plants in recent days in an effort to reassure
Russians, who still remember the empty shelves and soaring food
prices leading up to and following the 1991 collapse of the
The Kremlin chief said he was particularly concerned about
the price of buckwheat, which millions of ordinary Russians like
to eat as porridge or with mushrooms and onions.
"People are buying up this buckwheat from big retailers in
the evenings, using sacks to fill up their trucks, and then
selling it in small shops and markets," Medvedev said.
"Those who are involved in hiking up prices, those involved
in earning unjustified profits, should be dealt with by
prosecutors, by the police, by the anti-monopoly and tariff
services," he added.
The poor harvest in the republics of the former Soviet Union
has send world prices for grains soaring as some governments
such as those in Russia and Ukraine stopped or curbed exports.
But Ukraine's wheat exports rose to 430,000 tonnes in August
from 225,000 tonnes in July despite informal export limits
introduced by the Ukrainian Customs Service, analyst
UkrAgroConsult said on Thursday. [ID:nLDE6810W3]
(Writing by Guy Faulconbridge and Toni Vorobyova; additional
reporting by Aleksandras Budrys, Pavel Polityuk, Oksana Kobzeva,
Conor Humphries and Tatiana Ustinova; editing by Ralph Boulton)