Grain price fears weigh on brewers, food producers
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LONDON/COPENHAGEN Aug 6 (Reuters) - Shares in European brewers and food producers were hit hard on Friday, with traders citing worries about soaring grain prices after Russia's move to temporarily halt grain shipments.
The food and beverage producers sector .SX3P was the worst performer in Europe, down 2 percent, while the benchmark STOXX Europe 600 .STOXX was up 0.1 percent.
"They are coming off because of the wheat prices, which obviously cuts their margins," said a London-based trader.
U.S. wheat futures jumped 6 percent, taking weekly gains to more than 25 percent, after a drought in Russia prompted Russian Prime Minister Vladimir Putin to sign an order banning grain and flour exports from mid-August to the end of the year.
Danish brewer Carlsberg (CARLb.CO) lost 4.5 percent.
"It seems to be a little of an overreaction that it falls this much," said Danske Bank chief trader Mads Zink.
Among other brewers, Heineken (HEIN.AS) dropped 3.1 percent, Anheuser-Busch InBev (ABI.BR) shed 4.3 percent and SABMiller (SAB.L) eased 1.7 percent.
Food producers Nestle (NESN.VX), Danone (DANO.PA) and Associated British Foods (ABF.L) were down 0.9 to 2.5 percent, while Unilever (ULVR.L) fell 2.5 percent, a day after it warned of a tougher second half due to higher commodity cost and stiff competition after reporting higher second quarter sales. (Reporting by Dominic Lau and Teis Hald Jensen, Editing by Sitaraman Shankar)
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