Grain freight by rail may increase

Experts expect that this year the volume of transport of agricultural goods using rail may increase even more.

For several years now, these volumes have been growing rapidly.

For example, in 2022, 31 million tons of agricultural cargo were transported by rail, in 2023 – 38 million tons.

It is expected that this year this figure may further increase by 5% and reach up to 40 million tons.

However, there are problems that may prevent further increases in transportation volumes, experts warn.

Turnover of grain wagons.

On the main export routes it is currently worsening due to congestion on highways. As a result, there is a shortage of such cars, which are most widely used specifically for transporting grain cargo.

Large volumes of transportation, which also create a shortage of wagons.

In turn, volumes are growing for several reasons.

The first of them is record grain harvests, which have remained at a high level for several years.

The second is that due to the reorientation of export flows from European countries to the countries of the East and South, a very significant part of supplies now goes through the Black Sea ports.

Accordingly, the railways leading to these ports are forced to take on additional high load.

The closure of the airport in some regions, especially the southern ones, creates an additional burden on the railway system, since it becomes the only means of transporting passengers and cargo.

All these problems entail another significant difficulty for farmers, namely a noticeable increase in prices for transporting goods by rail.

Last year, the FAS conducted an inspection to determine the validity of the increase in prices for wagons for the transportation of bulk cargo, but this did not solve the problem.

Market participants note that increasing prices for cargo transportation is very painful, since it significantly reduces the profitability of production.

At present there is no reason to expect a quick solution to this problem.

According to the forecast of the Ministry of Agriculture, the volume of grain cargo transportation from the Russian Federation this year will not only not decrease, but should also increase.

According to data provided by the department, last year grain exports amounted to 60 million tons, this year it may grow to 65 million tons.

Taking this into account, the load on railway lines may increase even more, which creates the risk of additional price increases.