Russia’s grain crisis deepens as collapsing prices and farmers’ losses reach Putin

The crisis in Russia’s grain market, driven by the effective blockade of exports through ports in the Azov–Black Sea basin, has intensified to the point where low grain procurement prices are now being discussed at the highest political level. During a meeting on November 9, Tatarstan leader Rustam Minnikhanov complained to Vladimir Putin that despite a strong harvest, farmers were unable to secure acceptable prices due to logistics disruptions. Putin promised to address the situation but did not outline any specific measures to resolve the problem.

The situation is particularly severe in Russia’s southern regions, which traditionally account for a significant share of the country’s grain exports. Restrictions on port operations have caused grain shipments through the Azov–Black Sea basin to fall fourfold. Wheat procurement prices have plunged to RUB 7–8/kg in Krasnodar and Stavropol regions and to RUB 6/kg in Rostov region. Meanwhile, production costs stand at RUB 11–13.5/kg, forcing farmers to sell grain at substantial losses.

Logistics disruptions continue to cause severe economic damage. In September, cargo handling at certain terminals in the Azov–Black Sea basin declined by 95–100%, while agricultural cargo shipments through Krasnodar region’s ports totaled just 3.8 mln tons in July–August, compared with 7.9 mln tons a year earlier. Experts estimate the combined monthly losses for businesses and government budgets at various levels from restrictions on southern port operations at more than RUB 200 bln. Alternative export routes through the Baltic Sea and the Russian Far East remain economically unviable due to high railway tariffs.

Grain prices falling below production costs are steadily draining Russian farmers’ financial resources. Producers are losing working capital needed to finance sowing campaigns, purchase fertilizers and seeds, and service loans. Experts warn that prolonged losses in grain production could lead to a reduction in planted areas in the coming seasons. Farms in southern Russia remain particularly vulnerable, as a significant share of their production is intended for export markets.

Amid the worsening crisis, the Russian government has announced more than RUB 13 bln in support for farmers across 22 regions, including those affected by logistics disruptions in the Azov–Black Sea basin. However, the funding is primarily intended for agricultural operations related to winter crop cultivation and does not address the main cause of farmers’ losses — restricted access to export markets. As a result, maritime logistics problems are becoming a long-term threat to Russia’s grain sector, potentially leading to lower production, reduced investment and a decline in export potential.

Tags: Russia, export, grain, prices, wheat