The domestic grain market is facing unprecedented pressure.
Domestic prices for key grain crops have fallen below cost, and analysts agree that the price «bottom» has not yet been reached.
Amid geopolitical escalation in the northern Black Sea and severe infrastructure restrictions, farmers are trapped in a situation where export volumes are plummeting and government support measures remain unimplemented.
Black Sea Deadlock and Price Dive
According to monitoring data from analytical agencies, by mid-August, the EXW price index (including VAT) for grade 3 wheat fell to RUB 12,855 per tonne, and for grade 4, to RUB 11,525 per tonne.
However, experts call these figures overly optimistic.
The index has not yet fully reflected the shutdown of three of Novorossiysk’s four key grain terminals, which handled the bulk of deep-sea transshipment.
Real market prices are already at least 1,000 rubles below official values.
Paradoxically, the global market has reacted to the crisis in the Black Sea basin with a delay.
While the notional export price of Russian wheat (FOB Novorossiysk) fell to $210-212 per ton, with trade effectively at a standstill, European competitors began to record excess profits.
In Black Sea ports not involved in the conflict, such as Constanta in Romania or Varna and Burgas in Bulgaria, the price of wheat has stabilized at $275 per ton.
Experts predict this price gap will widen further.
Export Lowest Since 2010
Port restrictions have led to a massive revision of forecasts for shipments to foreign markets.
Analysts are lowering their forecast for export potential for August to a critical 1.8 million tons.
By comparison, this figure is 2.5 times lower than last August’s volumes and the lowest since 2010, when the country experienced an abnormal drought.
Alternative routes through the Baltic Sea and land borders are unable to fully compensate for the lost capacity in the south.
The range of estimates from analytical agencies also highlights the high uncertainty. The Institute for Agricultural Market Studies (IKAR) forecasts a range of 2.1–2.6 million tons, pointing to risks in the freight market and attacks on dry bulk carriers.
SovEcon experts estimate exports at 2.2 million tons, but this scenario is only feasible if Novorossiysk terminals partially resume operations by the end of the month.
Without the launch of alternative logistics corridors and the prompt implementation of large-scale agricultural support measures, the domestic market will continue to stagnate, forcing producers to sell their harvest at negative margins.
