Russia's Domestic Grain Prices Plunge 36% as Black Sea Exports Stall
Russian domestic grain prices have dropped 36% since June due to halted Black Sea exports, creating oversupply and squeezing farmers.
Domestic grain prices in Russia have fallen sharply, dropping 36% since June, as halted exports through the Black Sea and the Sea of Azov have left the market oversupplied. The decline, reported by consultancy Sovecon, comes as the new harvest reaches the market, further pressuring farmers' margins.
Both Russia and Ukraine have intensified attacks on each other's export terminals and grain vessels, creating the most significant threat to Black Sea grain trade since the war began over four years ago. Russia, the world's largest wheat exporter, typically ships about 70% of its grain to key buyers in the Middle East and Mediterranean via these routes.
According to Sovecon's Andrey Sizov, current prices are at their lowest for this time of year in at least five years. In dollar terms, prices are roughly 20% below the previous five-year low recorded in 2023.
The export halt has left an estimated 20 to 25 million tons of grain stranded domestically, based on Russia's expected harvest of around 140 million tons and projected export potential of 60 million tons.
In response, Moscow has announced measures to support exports, including rerouting trade flows and scrapping the grain export duty. However, farmers and market participants remain skeptical about how effective these steps will be in easing the current oversupply.