Russia could post its lowest August grain exports in 10 years

Russia exported around 1.4 mln tons of grain on August 1–20, 2.5 times less than in the same period last year, according to the Russian Grain Union. Wheat shipments fell 2.6-fold to just over 1 mln tons, barley exports dropped 2.9-fold to 168 thsd tons, while corn shipments declined 1.7-fold to 98 thsd tons. The decline was primarily attributed to shipping disruptions and damage to port infrastructure in the Azov-Black Sea basin.

The downturn accelerated sharply in the second ten days of August. Russia shipped only 478.8 thsd tons of grain during the period, 4.8 times less than a year earlier. Wheat exports fell 4.6-fold to 415.5 thsd tons, while barley shipments plunged 11-fold to 24.6 thsd tons. If the current situation persists, Russia may export only 1.8–1.9 mln tons of grain in August, including 1.5–1.6 mln tons of wheat, which would be the lowest August volume in a decade.

The geography of Russian exports has also narrowed sharply. In the second ten days of August, Russian wheat was shipped to only eight countries compared with 28 a year earlier. Bangladesh became the largest buyer with 110 thsd tons, followed by Indonesia and Saudi Arabia. Meanwhile, shipments to Egypt plunged almost eightfold to 62 thsd tons, while exports to Morocco fell 12-fold to just 5 thsd tons.

The contraction is also visible across Russia’s export infrastructure. Only seven companies shipped wheat in the second ten days of August compared with 36 a year earlier, while grains and pulses were exported through just eight ports versus 29 last year. Russia is attempting to redirect some volumes through the Baltic, but only 35 thsd tons were handled through Vysotsk during the period.

The decline in Russian shipments is already affecting the global wheat market. During the second ten days of August, US wheat prices rose by $11 to $281/t and French wheat gained $3 to $265/t as buyers increased demand for alternative origins. At the same time, Russian wheat FOB Novorossiysk fell by $4 to $220/t.

Russian farmers are facing the strongest pressure. Domestic prices for Class 4 wheat fell to RUB 11,500/t, or around $138/t. Since the beginning of the season, producer prices have dropped 20% in ruble terms and 27% in US dollar terms. With the new crop entering the market while export capacity remains sharply constrained, more grain is accumulating domestically, putting additional pressure on prices and farmers’ margins.

Tags: grain, barley, wheat, restrictions, war, Russia, export