Russia weighs grain export duty removal as Black Sea shipments stall
Russia considers scrapping grain export duty and rerouting shipments after Ukrainian attacks halt Black Sea exports, pressuring farmers.
Russia is scrambling to keep its grain trade moving after Ukrainian drone attacks effectively shut down export terminals in the Black Sea and the Sea of Azov. With those routes accounting for roughly 70% of Russian grain exports, the disruption has forced shippers to delay or cancel loadings during the peak season.
The government is reportedly considering suspending the grain export duty, a long-standing grievance for farmers, at least until the end of the year. The agriculture ministry has not commented on that possibility, but it has set up a task force to focus on rerouting exports. Analysts suggest Baltic and Caspian Sea terminals could serve as alternative corridors.
The ministry is also examining subsidies for producers, loan extensions, using surplus grain as livestock feed, and subsidies for railroad shipments. The urgency stems from a domestic price collapse: abundant harvest supplies combined with export bottlenecks have pushed wheat prices down sharply, while the export duty remains at its highest level since June 2025 due to a lagging price formula.
Ksenia Bolomatova, head of the Russian grain exporters lobby, said a moratorium on the duty would create more predictable conditions for trade and support farmer incomes. Producers argue the duty erodes profitability, though the budget had expected 135.5 billion roubles ($1.60 billion) from it in 2026.
President Vladimir Putin acknowledged last week that agricultural exports are facing problems but expressed confidence they would be resolved. He estimated Russia would have about 60 million tons of grain for export this season. Consultancy Sovecon expects August exports to rise to 2.2 million metric tons from 1.95 million in July.
Regional leaders are also pressing for action. Stavropol Governor Vladimir Vladimirov, whose region was Russia's top grain producer in 2025, appealed for state market interventions. "A good harvest has been gathered in the region, but the purchase prices today are low, barely covering the cost of production," he said. "This ties the hands of agricultural producers."