The Ukrainian Agriculture Ministry will ban the export of wheat from Nov. 15. This move has resulted in a rise in the price of wheat futures in Europe and elsewhere.

A severe drought in the farm belt of the midwestern U.S. has put pressure on other major grain growing regions, including the Black Sea Grain region of which Ukraine is a part. It seemed likely that Russia would ban food grain export, but its ascent into the WTO put a stopper to any such plans. Ukraine's move to ban exports of wheat, though still unofficial, is the first of its kind during the current global food crisis.

"This comes as no surprise. The ban was inevitable. Everybody knew and everybody has understood," said one major foreign trader to Reuters.

Reuters reports that Ukraine will continue exporting the 5 million tons of wheat set aside from the current season.

While the country is trying to ensure that there is enough wheat for its people, countries which include several middle-eastern nations dependent on Ukraine for their wheat supply will have to scramble to find another source.

According to the Financial Times, the traders and the agriculture ministry are not in accordance over the ban of wheat exports. Though the ministry has made it seem as if the decision were made in mutual agreement, traders may not have been consulted at all. Further, since Ukraine is a member of the WTO, the ban is likely to remain an unofficial decision.

"We were expecting indirect restrictions, a firm encouragement or an instruction perhaps. I'm not sure 'ban' is the right word," said a trader to Reuters. "The terms of this 'stop' need to be clarified. This can't be a 'ban' for a member of the WTO."

Abdolreza Abbassian, senior economist at the UN FAO is urging Ukraine to look at the "repercussions it would have on the world market and on their own grain sector the following year," reports FT.

Wheat futures rose to $8.81 on the Chicago Board of Trade following the announcement.

Argentina's Wheat Output Declines  

Several countries have been looking to South America for their grain supply. However, poor weather in the South American continent has led to a decline in the wheat output there as well.

The agriculture ministry of Argentina said on Thursday that the South American country's wheat harvest is likely to drop by 17 percent, reports Reuters.

Moreover, farmers have also avoided planting wheat, opting to plant soy crops, to bypass export curbs imposed on wheat.

Argentina's declining wheat output and Ukraine's unofficial ban is likely to exacerbate the pressure placed on the global food supply.