Russian wheat is losing export markets

In February 2025, grain exports from Russia reached a record low, falling 2.4 times compared to last year. According to the Russian Grain Union, this month Russia exported only 2.3 million tons of grain, which is the smallest volume for February in the last nine years. In particular, 1.77 million tons of wheat, 181 thousand tons of barley and 166 thousand tons of corn were shipped for export. This drop in supplies significantly affected Russia’s position on the international market, where it began to lose ground to European competitors who offer grain at lower prices, according to the Russian publication Forbes.

This decline in exports was accompanied by changes in buyer markets: if earlier Russia supplied wheat to 42 countries, then in February 2025 this number decreased to 18. The largest amount of wheat was supplied to Egypt, however, in Saudi Arabia and Turkey, the volumes of purchases decreased significantly. One of the reasons for this was that Russia’s neighboring countries began to sell grain with terms $4–5 cheaper, which further complicated competition on international markets. Accordingly, prices for Russian wheat rose to $250 per ton, which exceeded the prices of European suppliers, but was not able to cover the costs of Russian exporters.

One of the biggest factors influencing the situation are state export quotas, which limit the possibilities of selling abroad. According to analysts, wheat exports from Russia in the current season may decrease to 40-41 million tons, which is a significant drop compared to previous years. This situation is further complicated by negative margins for many exporters, who are now forced to sell grain at a loss due to low prices on the domestic market. Forecasts for the future are also not optimistic, as the lack of moisture in some regions of Russia may lead to another poor harvest in 2025.

The decline in export volumes causes serious financial problems for farmers, as the cost of grain production increases, and grain prices on the domestic market remain stable, but at a low level. In a situation where grain export quotas are not fully fulfilled, companies are forced to reduce sales volumes or transfer their quotas to other traders. According to analysts, even a small increase in prices could help many exporters get out of the loss-making zone, but the market is still under pressure.

In general, the problem of falling grain exports is only part of a difficult situation for Russian farmers, which also includes high production costs and low demand for products on foreign markets. Russia can no longer compete with European countries on grain prices, which significantly complicates its position on the world market. In the future, if the situation does not change, we can expect a further reduction in exports and even greater pressure on the country’s economy.

The Russian government has not yet ruled out the introduction of additional non-tariff measures that could stabilize the domestic grain market and limit its exports in the event of a fall in the harvest this year. However, such actions may further limit supplies to foreign markets and lead to an increase in prices within the country. All these factors together form a negative forecast for the Russian agricultural sector in the short and medium term.

The situation in the grain market remains difficult, and exporters from Russia are likely to face further difficulties in meeting quotas and ensuring the competitiveness of their goods.

Tags: Russia, export, prices, wheat