Spread between domestic and global prices for Russian wheat nearly doubles

Export disruptions are increasingly disconnecting Russia’s domestic grain market from the global market. Domestic purchase prices for Class 4 wheat have fallen to around RUB 11–12 thsd/t, or roughly $140–150/t, while Russian wheat export prices remain near $230–235/t FOB. As a result, the price spread has widened to around $80–90/t, nearly doubling over the past year.

The widening gap reflects a sharp decline in export demand within Russia. Under normal port operations, low domestic prices encourage traders to buy grain for export, providing support to the local market. This mechanism is now working much less effectively, as limited shipment capacity through the Azov-Black Sea region prevents surplus new-crop grain from being quickly moved to international markets.

As a result, domestic prices continue to decline despite relatively high Russian wheat prices on the export market. Class 4 wheat is now around 20–24% cheaper than a year ago, while grain prices in southern Russia have fallen by around 12–16% over the past month.

For Russian farmers, this means they are increasingly unable to benefit from prices prevailing on the global market. Much of the gap is effectively absorbed by logistics risks and constraints, while weak demand from exporters leaves producers with the choice of selling grain at lower prices or keeping it in storage.

If disruptions to maritime exports persist, the spread between domestic and export prices could remain unusually wide. This would increase financial pressure on farmers while creating a paradox: reduced Russian supplies support global wheat prices, but Russian producers receive little benefit from those higher prices.