"The losses amount to about 32.7 billion rubles (1.07 billion dollars)," Deputy Agriculture Minister Alexander Petrikov was quoted by the Interfax news agency as saying.

He said the drought had destroyed some 11 million hectares (27 million acres) of crops or 26 percent of the total harvest.

Before the drought and a blistering heatwave, Russia was one of the world's top wheat exporters, but Prime Minister Vladimir Putin announced a ban on foreign grain exports earlier this month as the harvest forecast was slashed.

The export ban, which runs at least to the end of the year, helped drive wheat prices to multi-year highs, sparking fears that food costs could soar and boost inflation.

Russia's harvest is expected to be sharply lower at 60-65 million tonnes of grain compared with 97.1 million tonnes in 2009.

So far, Russian farmers have harvested 40.7 million tonnes of grain, a drop of 17.8 million tonnes from the same time last year, according to the agriculture ministry.

Despite the export ban, consumers are likely to see some staggering price hikes, such as on buckwheat, a staple in Russian diets.

"Reserves from last year are not large, the forecasts for the harvest this year are down, that is why we expect it to have the sharpest hike in prices to hit buckwheat, from 40 to 60 percent," Mikhail Sussov of the X5 Retail Group distributor told Interfax.

Sussov said he expects the prices of dairy products to rise by 20 to 30 percent due to lower production.

earlier related report
Russia ends last fires emergency as cool sets in
Moscow (AFP) Aug 23, 2010 - Russia on Monday ended a state of emergency in the last of seven regions where it had been declared due to raging wildfires, as dwindling blazes and rain brought relief from its worst ever heatwave.

"The president (Dmitry Medvedev) decided to lift the state of emergency from the forest fires in the Ryazan region," some 200 kilometres (124 miles) west of Moscow, the Kremlin said in statement.

The decision marked the end of a fires crisis that had seen some 200,000 hectares of land ablaze at its peak and a state of emergency declared in seven regions.

Over 50 people were killed in the fires that engulfed forests and peat bogs.

Last week, Medvedev reported success containing fires that had raised a major alarm close to Russia's main nuclear research centre in the town of Sarov, on the border of the Nizhny Novgorod and Mordavia regions.

Meanwhile, drizzle and grey skies hung over Moscow cooling temperatures to around 20 degrees Celsius (68 Fahrenheit), in stark contrast the smog and hot temperatures edging near 40 degrees that hit Russians earlier this month.

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