Russia has lost its ability to compete in the global wheat market through lower prices

A sharp increase in freight and marine insurance costs in the Black Sea is forcing Russian exporters to cut wheat prices in an effort to remain competitive. However, even a substantial discount is no longer enough to support exports. According to the Russian Grain Union, Russian wheat is currently offered at about $35/ton below European wheat, whereas a year ago it traded at roughly a $9/ton premium.

The shift has been driven by soaring freight and insurance costs following the escalation of security risks in the Azov-Black Sea region. According to Reuters, average freight rates increased from $5 to $8 per ton in just one week, while export prices for new-crop Russian 12.5% protein wheat fell to $226–230/ton FOB. Market participants note that shipments have failed to accelerate despite the peak export season because of elevated risks to maritime traffic.

The logistics problems are already reflected in export performance. Russia exported only 1.8 mln tons of wheat in July, down 17.7% from a year earlier, while total grain exports fell by nearly 38% to just over 2 mln tons. At the same time, the number of exporting companies and ports handling grain shipments has almost halved.

Against this backdrop, analysts continue to lower their export forecasts. SovEcon has reduced its 2026/27 Russian wheat export forecast to 44.6 mln tons, arguing that logistics disruptions and higher transportation costs—not global wheat prices—have become the main constraint. As a result, Russian wheat has lost its key competitive advantage on the global market: the ability to compete through lower prices.