Russian Prime Minister Vladimir Putin shocked industry watchers earlier this month when he announced he was extending Russia’s ban on grain exports through 2011. The ban was originally set to expire at the end of this year.

“We will be able to end the export ban only after next year’s harvest is gathered and the picture regarding grain balances becomes clearer,” he said.

A combination of drought and wildfires rendered nearly one-third of Russia’s cultivable land unusable this summer, sparking fears of a global grain shortage and sending wheat prices to a two-year high. Russia is typically the world’s fourth-largest exporter of wheat, and it is expected to harvest only 60 million to 65 million metric tons of grain this year, a decrease of more than 30 million metric tons from last year.

The recent floods in Pakistan and China have added to the volatility of grain prices and have some concerned that the situation could lead to a repeat of the food shortages and riots of 2007-08.