Rising logistics costs squeeze grain producers’ margins in Russia

At the beginning of 2026, a key factor affecting the Russian grain market has become the rapid increase in transportation costs. Additional thousands of kilometers in transit and rising logistics expenses are now being factored into the cost of each ton. According to analysts at the Center for Price Indices (CPI), the average distance for rail grain shipments has risen by 40%, significantly increasing costs and altering traditional pricing schemes.

The main reason for these changes is the shift in supply geography due to poor harvests in key southern export regions. While the bulk of shipments were previously sourced from the Stavropol and Volgograd regions, the leading exporters now include more distant areas such as Novosibirsk, Omsk, and the Altai region. Central Black Earth, Volga, and Siberian regions now account for the majority of exports, further raising logistics costs for all market participants.

This situation creates a mixed picture for the market. New opportunities are opening for producers in central and eastern regions, but traders, processors, and milling companies face serious challenges. Rising transportation costs reduce exporters’ profitability, forcing them to either increase purchase prices to cover expenses or lower prices for producers. According to Forbes, production costs rose by 10–20% in 2025, while wheat purchase prices fell by 18% year-on-year, leaving many farms below the profitability threshold.

The average distance of grain shipments has increased to 1,400 km, 40% higher than the long-term average. For businesses, this translates into a direct margin squeeze. CPI forecasts that grain truck rental rates could rise by 22% by the end of 2026, intensifying the pressure.

Rising logistics costs are forcing producers and traders to reassess pricing and delivery routes. Financial stability now depends not only on harvest volumes but also on the ability to effectively plan logistics and manage transportation expenses.

Tags: Russia, margin, rail transportation