The decline in wheat production in the Russian Federation creates a significant risk that prices for it may rise in the near future.
The Ministry of Agriculture addressed an open letter to the President of Russia, stating that the reduction in production volumes carries the risk of rising prices.
At the same time, the cost of grain may exceed the maximum values that are currently set at 15.1-15.6 thousand rubles per ton.
In general, it is planned that the 2025 harvest will be able to fully cover the needs of grain processors.
However, there is a possibility that due to weather and other factors, the grain harvest may be lower than expected. In this case, an increase in prices for this type of agricultural product is likely.
According to the latest information, the wheat harvest in 2024 amounted to 82.6 million tons of grain.
Most experts believe that a repeat of this level this year is unlikely. In their opinion, most likely, we can count on a harvest of about 81 million tons.
However, some experts do not rule out that under a positive scenario, it may reach 85 million tons.
But in the case of a negative scenario, the wheat harvest may be only 79 million tons, which will be significantly less than last year’s figures.
At the same time, it is possible that wheat prices in the country will grow unevenly.
Analysts are most worried about the central and southern regions of the Russian Federation, where the likelihood of grain price growth in the event of a wheat crop failure is highest.
«First of all, this is the Center and, to a certain extent, the South of Russia. From the very beginning of the season, we assumed that in the Center, against the background of a relative crop failure, a zone of high prices would appear,» notes IKAR CEO Dmitry Rylko.
If the forecasts regarding price growth are confirmed, the Ministry of Agriculture may apply a number of measures, many of which are already being actively developed today.
For example, we may be talking about increasing sales of wheat from a special intervention fund under the Ministry of Agriculture, which was created specifically to regulate prices.
By the way, the open letter contains a proposal from the Communist Party of the Russian Federation to increase the volume of the fund to 15 million tons. It is assumed that 3 million tons of wheat can be sold from it in the current season.
Additional measures include the introduction of quotas or the attraction of imports from Kazakhstan, experts note.
However, an even more effective measure could be support for the winter crop harvest, as well as the sowing of spring crops, which should begin in the near future.
In this case, the harvest could be higher, which would remove the main factors that can cause price increases.
