Russian flour output forecast to rise 1.5–2.0% as prices increase in 2027

Baseline points to limited production growth

Russia’s flour industry is heading into 2027 with modest output growth and continued price pressure. Under the baseline forecast published by ZOL.ru for the fourth quarter of 2026 and 2027, flour production is expected to increase by 1.5–2.0% year on year. The projection describes a market that is expanding slowly rather than entering a period of strong volume growth.

Wholesale EXW prices are forecast to rise by 3.0–4.0% year on year, while retail prices could increase by 4.0–5.0%. The wider rise at the retail level indicates that costs beyond the mill gate may continue to affect consumers and downstream food manufacturers. For millers, the central challenge will be balancing limited volume growth against raw-material, financing and operating expenses.

The baseline depends on confirmation of a stable harvest, moderate inflation and a 4–6% increase in exports to Asia. These conditions would support milling demand without producing a sharp expansion in domestic output. The forecast does not identify individual Asian destinations or provide absolute export volumes.

Harvest and borrowing costs define the upside

ZOL.ru assigns a 20% probability to an optimistic scenario. In this case, flour production would grow by 2.5–3.0%, supported by a harvest exceeding 90 million tonnes and a reduction in the cost of borrowed capital. Wholesale prices could then fall by 0–1.0% in real terms.

This scenario would give processors more room to increase capacity utilisation while easing pressure on procurement and working capital. Lower financing costs would be particularly relevant for mills carrying grain inventories or funding equipment and operational expenses. A harvest above the stated threshold would also improve the availability of milling raw material, although grain quality would remain important.

Downside could push retail inflation into double digits

The pessimistic scenario, also assigned a 20% probability, assumes that production declines by 1.0–2.0%. ZOL.ru links this outcome to weather anomalies, a ruble devaluation exceeding 10% and tighter export quotas. Under those conditions, retail flour prices could rise by 9.0–11.0%.

Such a combination would place pressure on mills from both sides. A weaker ruble could affect input and equipment costs, while weather-related losses could restrict the quantity or quality of suitable grain. Tighter export quotas would add a regulatory variable to decisions by grain suppliers, millers and traders. Food manufacturers using flour would face higher procurement costs and greater uncertainty when setting prices and production plans.

Grain quality and price controls remain key risks

The forecast identifies the phytosanitary condition of grain and the possible introduction of strict price regulation as major risks. Phytosanitary problems could reduce the usable supply even if the headline harvest remains stable, while price controls could limit the ability of mills and retailers to pass on higher costs.

According to ZOL.ru, assumptions about the raw-material balance would need to be reviewed if the market deviates from the baseline by more than plus or minus 1.5 percentage points in volume or more than plus or minus 2% in price. That threshold gives producers, food companies and traders a practical signal for monitoring the 2027 outlook as harvest, currency and policy conditions develop.