7 Aug 2010

Shares fall as grain prices rise

7:03 am on 7 August 2010

Shares in brewers and food companies have fallen in Europe on fears that rising wheat prices could hit their profit margins.

Wheat prices have risen 25% this week due to drought and fires in eastern Europe.

Russia has issued a temporary ban on exports of grain, from 15 August - 31 December.

The BBC reports shares in Danish brewer Carlsberg fell 5.1%, while Diageo, which owns brands such as Guinness, shed 2.2%. Associated British Foods fell 1.5%.

The Food and Agriculture Organization has played down fears of a food crisis.

On Wednesday, the FAO cut its global wheat production forecast for the year, but said that fears of a world food crisis were "not justified at this point".

Russia is the world's third largest wheat exporter. Its biggest customers include Egypt, Turkey and Syria.