The global grain market is facing unprecedented climate challenges that are disrupting established supply and demand balances in the Old World and triggering a wave of food inflation.
According to meteorologists and European industry associations, the unprecedented June heatwave, with temperatures in Western Europe reaching an extreme 43°C, led to massive crop failure.
The combined harvest in the 27 EU countries and the UK for the season is expected to reach 286.6 million tonnes, down 23.4 million tonnes from last year.
In just one month, the heat wave destroyed 9 million tonnes of grain, causing farmers direct losses of €2.1 billion.
The European force majeure is not just a regional crisis, but a tectonic shift, opening a unique window of commercial opportunity for Russian agribusiness as global prices soar to two-year highs.
Geography of losses: France under attack, Romania withstands
The climate impact has been distributed extremely unevenly across the European continent, primarily affecting Central and Western Europe.
France
Beared the brunt of the blow. The EU’s main breadbasket will lose 4.1 million tons of grain, a loss of approximately €891 million in revenue, with the lion’s share of the lost volume coming from corn.
Hungary and Germany
Recorded harvest declines of 2.4 million tons and 1.4 million tons, respectively.
Spain
Lost 1.4 million tons of harvest.
Anatoly Tikhonov, Director of the Center for International Agribusiness at the Presidential Academy, emphasizes that southeastern Europe remains in a favorable zone.
In particular, Romania is preparing to harvest a crop higher than last year, which will allow it to partially replace French grain in strategic North African markets.
Nevertheless, the FAO forecasts that the global grain harvest will decline by 1.9% to 2.98 billion tonnes.
Experts note that there will be no empty shelves in Europe, but consumers will face higher prices for bread, milk, and meat due to a sharp jump in the cost of corn feed.
Russia as a system-forming element of the global balance
The European crop shortage coincided with production declines in other major exporters.
The US is recording its worst wheat harvest since 1970, Canada is lowering its season target, and Australia is losing 26% of its gross harvest.
Under these conditions, Russia, with a projected harvest of 88-92 million tons of wheat, is emerging as a key stabilizer for the global market.
According to the International Grains Council (IGC), Russia will export 47.5 million tons of wheat this season, outselling the entire European Union by more than 15 million tons.
However, our domestic market risks failing to realize this potential due to a logistical impasse: if artificial shipping restrictions in the Azov-Don Canal persist, the export surplus will flood domestic markets.
The resulting surplus will collapse domestic purchase prices, which are already on the brink of profitability, depriving farmers of income despite rising global prices.
Ordinary Russian consumers are protected from external shocks—the country is fully self-sufficient in food.
Experts agree that domestic price risks in Russia are not related to the European drought, but to rising costs of domestic logistics, fuel, and labor, and a one-third reduction in rye crops.
Obviously, the EU drought could add another 5-10% to global prices.
But to turn this trend into real profits for Russian holdings, the government must urgently address the issue of port security in the Black Sea and Azov Sea basins, preventing grain from becoming blocked at elevators.
