The price of %Wheat produced in Russia, the world’s biggest exporter of the grain, has risen to a three-month high amid worsening drought conditions.
The price of Russian wheat has gained more than 4% in the last two weeks and is now the highest it has been since late June of this year.
Russian wheat is currently trading at $228.50 U.S. per metric ton on the Chicago Mercantile Exchange.
The sharp price increase comes as Russia grapples with extreme drought conditions that are hurting its agricultural crops.
Russia is forecast to harvest 82.1 million metric tons of wheat this year and export 47 million metric tons of it, according to data from Platts.
Commodities traders say the drought is straining Russia’s entire farm region and likely to impact next year’s planting season as well.
Russian exporters are under pressure to reduce shipments and conserve crops for domestic use and consumption.
Egypt remains the top buyer of Russian wheat, buying 1.4 million metric tons in September alone.
With Russia’s government now restricting wheat exports from the country, traders say they expect to see wheat prices continue rising in coming months.