Grain purchasing in Russia faces collapse amid maritime export disruptions

Russian farmers are facing a sharp deterioration in new-crop grain sales due to disruptions in export logistics. Grain is accumulating on the domestic market, elevators are filling up, and purchase prices are falling. Russian Grain Union President Arkady Zlochevsky said that under the current conditions, Russian producers’ grain is effectively “not needed by anyone” as opportunities to ship it abroad have significantly declined.

The problems have emerged during the peak arrival of the new crop, when farmers need to clear storage facilities and sell their grain. Some regions are reporting congested elevators, queues for grain intake and difficulties selling newly harvested supplies. Excess availability is adding further pressure on domestic purchase prices.

The scale of the problem is reflected in a sharp decline in overseas shipments. Russia’s exports of major grains fell by around 38% year-on-year in July to about 2 mln tons, while the decline exceeded 60% in the final ten days of the month. The most severe disruptions were initially concentrated in the Azov basin, but risks have now spread to key Black Sea export routes.

Major grain terminals in Novorossiysk and Taman have already restricted grain intake due to slower seaborne shipments. The situation is being further complicated by attacks on port infrastructure and commercial vessels in the Black Sea itself: a major grain terminal in Taman was hit in late July, while a Turkish cargo vessel was attacked near Novorossiysk in early August. Growing shipping risks are making it more difficult to secure vessels and are pushing up freight and insurance costs.

If maritime export disruptions persist, conditions for Russian farmers could deteriorate further as the harvest progresses. Continued arrivals of new-crop grain amid limited export capacity would lead to additional accumulation on the domestic market, increasing pressure on storage facilities and pushing purchase prices further down.

Tags: Russia, export, grain, prices