According to expert estimates, current wheat prices have already fallen to 2018 levels, yet there is a real risk of a further decline to the critical lows seen in 2013–2014.
Analysts describe the current domestic market situation as extremely depressed and challenging for agricultural producers.
Regular monitoring data shows that by the end of September, the average price of 4th-class wheat (EXW basis, including VAT) had dropped to 8625 rubles per ton. This is 115 rubles lower than the previous week’s figure and a full 5000 rubles below the level recorded during the same period last year.
The situation is compounded by the fact that current market prices are significantly below the state-mandated price floors set for government procurement interventions.
The gap stands at 4685 rubles per ton for 3rd-class food-grade grain and 5165 rubles per ton for 4th-class grain.
Regional Variations and the Search for a New Price «Floor»
Analysts note that the crisis is affecting the country’s key agricultural macro-regions unevenly. While prices in the Black Earth (Chernozem) region and the Volga region appear to have already hit a local «floor,» this process is still ongoing in Southern Russia.
Currently, the southern regions are experiencing the most pronounced downward pressure due to their distance from new export logistics routes—specifically, the Baltic Sea ports.
The Baltic route is viewed as a promising avenue for redirecting domestic grain exports. However, current market conditions in this macro-region are not yet strong enough to provide significant support to domestic price quotes. For instance, at the port of Vysotsky, the price of a tonne of wheat currently stands at 15800 rubles—an amount that, at the current exchange rate, is equivalent to less than 200 dollars.
Market participants pin their hopes for stabilization on the ramping up of state grain intervention purchases and a potential improvement in price indicators on a CPT Baltic basis.
Domestic consumption and reduced production plans
Market balance adjustments are also taking place at the planning stage for the new crop. Experts forecast a significant reduction in winter crop acreage; expectations are that 1 million hectares less will be sown for next year’s harvest compared to the previous season.
Agricultural producers cannot count on offsetting the drop in export revenues through a surge in domestic demand, either.
Negative structural changes are evident in the livestock sector, a key consumer of feed grain. Declining poultry and swine populations are directly constraining the growth of the compound feed industry.
Conservative estimates suggest that compound feed production volumes will stagnate this year, with growth either remaining at a negligible 0.1% or slipping into negative territory compared to last year’s figures.
Consequently, the domestic market remains oversupplied, and processing facilities lack the incentive to increase their purchases of raw grain.
Export scenarios and the pressure of carryover stocks
Experts estimate the Russian grain industry’s export potential for the current agricultural season to be high—around 59 million tonnes—against a total gross grain harvest of 134–135 million tonnes (excluding the new regions). However, actual shipment volumes will depend directly on geopolitical and logistical conditions.
Pessimistic scenario:
Export volumes could amount to just 39 million tons. This scenario entails the forced exclusion of the traditionally large shipment volumes handled by ports in the Azov-Black Sea basin from the calculations.
Optimistic scenario:
Under favorable circumstances, shipments to foreign markets could reach 45 million tons.
The primary challenge to market stability remains the massive carryover grain stocks. By the end of the 2026/27 season, surpluses could range from 28 million tons (in the optimistic scenario) to 34.84 million tons (if the pessimistic export forecast materializes).
The issue regarding the scale of these stocks is evident: even the minimum projected carryover volume of 21 million tons is equivalent to the country’s total domestic consumption for a month and a half, which will continue to exert strong downward pressure on procurement prices.
To restore the profitability of the crop production sector, urgent systemic state support measures are required, including expanding the intervention fund and optimizing logistics tariffs for new shipment routes.
