The domestic rice industry is entering a long-awaited phase of foreign trade liberalization, which, however, poses fundamentally new challenges for producers.
As reported by the National Rice Union (NRU), the relevant subcommittee of the Russian government has made a strategic decision to completely eliminate the tariff quota on paddy rice exports.
Following the official publication of the resolution, the export of raw materials will no longer be subject to government restrictions, while the export of finished rice grains and highly processed products is already completely free of tariff barriers.
This decision is a long-awaited step toward stabilizing the domestic market, although the process of regaining lost ground promises to be long and sluggish.
Four years of isolation and surplus pressure
Radical restrictive measures were introduced in 2022 following a major man-made accident at the Fyodorovsky Hydroelectric Power Station in the Krasnodar Territory.
At that time, a complete export ban seemed entirely justified: the government needed to protect the domestic market from shortages and maintain consumer prices.
However, the temporary embargo was repeatedly extended, and ultimately the sector essentially spent four years in strict isolation from the global trade system.
Only at the beginning of this year did the authorities open the floodgates, allowing the export of grain and paddy rice within a conservative tariff quota of 200,000 tons.
The prolonged absence of exports led to a serious domestic imbalance.
Historically, Russia produced approximately 1.2 million tons of paddy rice annually, consistently exporting 140,000 to 160,000 tons. This volume acted as a natural regulator: it removed surpluses, maintained farmers’ profitability, and provided factories with working capital for modernization.
After closing the borders and maintaining stable imports of specific varieties, a huge unsold surplus of rice accumulated within the country.
According to NRS analysts, this accumulated overhang has become the key trigger for the sharp drop in wholesale paddy prices in recent years.
In this reality, lifting restrictions is the only way to salvage the profitability of rice farms.
Lost customers and a tectonic shift in demand
The main problem at the moment is that opening borders does not automatically mean a return to sales. During the four years of Russian rice’s absence from the global market, tectonic shifts have occurred:
Logistics substitution—traditional foreign importers quickly found alternative suppliers and completely restructured their supply chains.
Shifting taste preferences—far more dangerously, the very structure of global demand has changed.
While previously buyers primarily purchased medium-grain rice (the staple for Russian fields), today global retailers have massively shifted toward long-grain and large-grain varieties.
To regain the trust of its counterparties, the domestic agricultural sector will have to not simply dump prices, but urgently restructure its breeding efforts and change the crop rotation structure in favor of globally sought-after varieties.
Subsidies missing the mark: a technical deadlock in state support
The situation is exacerbated by an unexpected regulatory impasse. Currently, Russian rice exporters are deprived of the right to receive a key measure of state support—reimbursement of part of the cost of transporting their products.
The reason is simple: the official list of HS codes eligible for subsidies does not include item 1006 («Rice») or codes for rice grains, as the document was compiled during the period of the strict export ban.
The National Rice Union has already initiated an appeal to the Ministry of Agriculture to correct this technical error, but the ministry refused, citing a lack of available limits for additional funding.
Lifting export restrictions is a tactical victory that will partially relieve pricing pressure on the domestic market.
However, a full-scale restart of the industry will require flexibility from the government in terms of transport subsidies, and technological courage from Kuban farmers in developing new long-grain hybrids.
