Russian wheat has lost its competitiveness on the world market

The new agricultural year, which began on July 1, 2025, promises to be difficult for Russian grain exporters. According to analysts, in July 2025, the volume of grain exports will be only about 2 million tons, which is almost half the amount of last year. The main reasons are adverse weather conditions and increased competition on the world market due to increased yields in other countries, in particular in the European Union.

According to experts, Russian wheat exports in July may not exceed 2 million tons, which is confirmed by data from the Institute of Agricultural Market Conditions (ICAR) and the Sovekon analytical center. The Rusagrotrans analytical center gives a slightly higher forecast – 2.4–2.6 million tons, but this is still 1.9 times less than in June 2024, when 3.8 million tons were exported. The decrease in volumes is associated with a decrease in the harvest due to difficult climatic conditions, in particular, abnormal heat and drought in southern Russia.

In key producing regions, such as Krasnodar Krai and Rostov Oblast, wheat yields have fallen sharply. If earlier in some farms in the northern zone of Krasnodar Krai 70–80 centners per hectare were harvested, this year the figures barely reach 20 centners. According to Rusagrotrans experts, grain stocks in these regions are decreasing, which complicates export deliveries. Although the situation may be partially compensated by a better harvest in Stavropol Krai, the overall picture remains disappointing.

Financially stable farmers are in no hurry to sell grain at current prices, expecting better market conditions. In the domestic market, prices for fourth-grade wheat with a protein content of 12.5% ​​fluctuate within 13.7–14 thousand. rubles per ton in the south, 13.2–13.6 thousand rubles in the Volga region and 14.5–15 thousand rubles in the central regions. On the world market, Russian wheat costs about $226 per ton (FOB), which does not allow it to compete with American wheat ($222 per ton), while prices for wheat from Romania ($228), France and Argentina ($230) and Australia ($249) are slightly higher.

Increased competition on the world market adds to the problems for Russian exporters. According to FAO forecasts, in the 2025/2026 season, EU countries will harvest 135 million tons of wheat, which is 14% more than last year. In particular, France and Germany will increase production by 25% and 14%, respectively, and Romania and Bulgaria – by 23% and 16%. This creates additional pressure on Russian exports, especially in the markets of North Africa and Asia, where Russian wheat has traditionally been purchased.

Despite the difficulties, market participants remain cautiously optimistic. Experts from IKAR and Rexsoft Consulting believe that exports may pick up in the second half of July and early August due to the acceleration of the harvesting campaign. The Russian Ministry of Agriculture predicts that the country will harvest 135 million tons of grain, including 90 million tons of wheat, and will maintain its leadership in wheat exports, sending 53–55 million tons of grain abroad in the 2025/2026 season. However, achieving these goals will depend on the ability to overcome climatic and market challenges.

Tags: Russia, export, prices, wheat, crop forecast