Russia's grain exports face fresh hit as Novorossiysk terminal halts loadings

Russia's grain export capacity has taken another significant blow with the suspension of loadings at the KSK terminal in Novorossiysk, the country's largest sea grain terminal. The move, announced on Thursday, means all three major grain terminals in the key Black Sea port are now offline.

The suspension at KSK follows a massive Ukrainian drone attack on Wednesday that put two other Novorossiysk terminals, NZT and NKHP, out of action. While KSK itself was not damaged, its owner, Delo Group, said the decision was made to ensure the safety of staff and infrastructure. Sources indicate that NKHP's loading gallery sustained severe damage, potentially keeping it offline for months, while NZT's damage was less extensive.

The disruption is the latest escalation in a series of attacks by both Russia and Ukraine on each other's commercial shipping and port infrastructure, a factor that has been driving global grain prices upward. Andrey Sizov, head of the Sovecon agency, said the market is underestimating the situation, noting that persistent hopes for a return to normalcy in the Azov and Black Seas have been met with greater escalation. He estimates the terminal suspensions could reduce Russian exports by 0.7 to 1.2 million tons in August alone.

Russia's seaborne grain exports had already fallen 20.3% year on year in July, partly due to shipping restrictions in the Sea of Azov imposed in early July. Even before this week's events, analysts were predicting that August exports would hit a 10-year low. The Russian Grain Union's head, Arkady Zlochevsky, said August shipments may struggle to reach 2 million tons, compared with 5.7 million tons a year ago, with the KSK shutdown alone accounting for a loss of at least 0.2 million tons.

The attacks have revived concerns about the vulnerability of Black Sea export infrastructure. Following a late-July strike on the Taman Grain Terminal, industry groups warned that further disruptions could jeopardize shipments of 30 to 35 million tons of Russian wheat this season. Analysts are now revising forecasts downward, with some estimating Russian grain exports could fall to 21.7 million tons in 2026/27, or as low as 17.5 million tons if security risks escalate. The Kazakhstan Grain Union warned that Russia and Ukraine together could fall short by 30 to 40 million tons in global grain supply, potentially pushing world food prices 15% to 20% higher.

Meanwhile, a source familiar with the matter said Ukraine has transmitted an offer to Russia, via a third party, for both sides to halt attacks on civilian targets in the Black Sea. Kyiv has yet to receive a response. Russia's Agriculture Ministry has set up a task force to coordinate the rerouting of farm exports.