Friday, August 06, 2010

Russian Fires, Bombs, and Bread

Large parts of western and southern Russia now resemble southern California on a very bad day.Russia Blog reports on the scope and peculiarities of Russian forest and peat bog fires now scorching the country:

"Nearly 1.8 million acres are burning in Central Russia, thousands of homes are destroyed, military and fire departments resources maxed out, and no end of the tragedy is in sight. Peat (a fossil fuel that lays underground close to the surface) caused current fires. The fuel, usually moist from the rivers, swamp, and underground creeks, has dried up during the record-breaking two-months-long draught with temperatures reaching 120 Farengheit across Central Russia. The greatest challenges in fighting the fires is that burning peat cannot be detected as the fire spreads rapidly underground and travelsin random directions. At any given moment the fire almost instanteniously appears above the ground igniting trees and homes above. While firemen tackle the smoking ground, chances are high that they are pouring water on a fire that has been burning for days or weeks, and its major flames have already traveled dozens and hundreds miles away from where it is being fought."

Meanwhile Kavkaz Center reports on damage to Russian military infrastructure:

"The command of the Moscow Military District, due to fire-dangerous situation, removed stocks of missiles and artillery weapons deployed at this base to a safer area, Russians claim.
On Wednesday, the formal ringleader of the Kremlin, Medvedev, instructed the Putin's "government" to draw up in two days a new list of potentially dangerous military bases.
It is to be mentioned that a naval base, storing aerotechnical equipment, in the Kolomna district outside Moscow has been destroyed by fires in recent days. According to official underestimated figures, the damage amounts to $ 670 million.

Medvedev dismissed some high-ranking military officers and warned his funny "defense ministry" that "if something like this happens again, everyone will bear responsibility".

Some Russian media outlets reported that fires at the naval base also destroyed a secret antenna of the Russian general staff, the damage amounted to several hundred million US dollars. The defense Ministry, as previously, tries to deny this report.

Meanwhile, Russian sources insist that also a communications center of the general staff was burnt down together with the naval base in the Kolomna district, Moscow region.

The fire occurred on July 29 - the same day, when the naval base was burnt, and it destroyed a secret antenna of the general staff, located near the village of Shurovo, Kolomna district, on the territory of the airborne forces, the media insist.

The antenna was in the forest and burned down in few minutes. When Russian soldiers arrived to the scene under the orders of the command, there was nothing left to extinguish.

A fight between Russian soldiers and the fire near the nuclear bombs factory in Sarov is continuing against this background."

Another effect which may directly impact American consumers is rising food prices as noted by this Reuters report:

"A severe drought in Russia could result in higher prices for bread in U.S. stores, as a spike in wheat costs may lead manufacturers to ease up on the discounts retailers pushed for during the recession.

But consumers and retailers may push back. Shoppers could opt for cheaper options as unemployment remains high, while retailers -- who try to drive traffic with discounts -- could point out that the spike in wheat is no where near the level of two years ago, when manufacturers raised prices on many goods.

Russia, one of the world's biggest exporters of wheat, is enduring its worst drought in 130 years, sparking a temporary ban on exports and sending U.S. wheat prices soaring.

If prices do not retreat, food makers such as General Mills Inc (GIS.N), Kellogg Co (K.N), Kraft Foods Inc (KFT.N) and Sara Lee Corp (SLE.N) may need to raise prices on bread, crackers and cookies to protect their profit margins."

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