Collapse in grain exports and prices threatens Russia’s wheat planting

Russia’s grain export problems are beginning to directly affect farmers’ planting decisions for the next crop. Restrictions at Azov-Black Sea terminals are leaving large volumes of the new harvest on the domestic market, pushing prices sharply lower. In some regions, feed wheat is reportedly being sold at around RUB 5,000/t, while estimated production costs are close to RUB 10,000/t.

The price decline comes just as farmers need working capital to complete harvesting and finance autumn planting. According to Reksoft Consulting, this year’s planting campaign could cost around 20% more than a year ago. Farmers are therefore facing falling grain revenues at the same time as the cost of establishing the next crop is rising.

Pressure on the domestic market is being intensified by a relatively large harvest. Russia’s grain production is expected at 135–137 mln tons, while export capacity has fallen sharply. Rusagrotrans forecasts August wheat exports at just 1.8 mln tons, 2.5 times below last year and the lowest August volume since 2010.

Russian authorities are considering measures to remove excess grain from the market and support prices, including additional state purchases of 1–3 mln tons and a temporary suspension of the export duty. However, without a recovery in export logistics, such measures are unlikely to fully offset the loss of external demand.

The combination of low prices, higher planting costs and export constraints could prompt Russian farmers to reduce wheat area for the 2027 crop or shift some land to more profitable crops. The current logistics crisis could therefore affect not only exports this season but also Russia’s future grain production.

Tags: Russia, export, prices, wheat