Russian Wheat Prices Fall Sharply as Export Shipments Stall
Wheat prices in Russia are falling fastest in the southern regions, where fourth-class export-grade wheat has dropped 2,815 rubles to 9,717 rubles per tonne, according to ProZerno. Exporter demand has disappeared amid shipping problems and damaged port infrastructure, while the export duty rose 2.2 times on 20 August. ProZerno is calling for state purchasing interventions of at least 10 million tonnes, against 1 million to 3 million under discussion at the ministry.
Russian wheat prices extended a sharp decline through the second half of August, with the fastest drops recorded in the country's southern regions, the main supply base for Black Sea exports. The fall is driven by heavily restricted export shipments — the result of shipping logistics problems and damage to port infrastructure — compounded by pressure from the incoming new crop.
Southern regions lead the decline
According to monitoring by the analytical company ProZerno, third-class wheat in southern Russia lost 1,935 rubles per tonne, falling to 11,717 rubles. Fourth-class wheat, the country's main export grade, dropped 2,815 rubles to 9,717 rubles per tonne — a steeper fall in both absolute and relative terms than for the higher milling grade.
The weakness is not confined to wheat or to the south. ProZerno also recorded significant price declines for maize, feed barley and oats in the central regions, the Volga area and the Black Earth belt. That spread inland indicates the pressure is being transmitted from the export terminals rather than originating in domestic consumption.
Exporters absent from the bid side
ProZerno chief executive Vladimir Petrichenko said the decline accelerated against a backdrop of a complete absence of demand from exporters. “In this situation it is necessary to implement all the planned measures to stimulate grain sales as quickly as possible, and above all to urgently launch state purchasing interventions,” he said, adding that the volume of such purchases should be no less than 10 million tonnes.
State purchasing interventions are a market-regulation tool under which the state buys surplus output from producers into a dedicated fund, removing excess supply and halting a price collapse. The relevant ministry is currently considering a purchase volume of only 1 million to 3 million tonnes — between a third and a tenth of what Petrichenko says the market needs.
Duties, quotas and the damper
On 20 August the export duty on Russian wheat rose 2.2 times, from 326.6 to 721.1 rubles per tonne. The duty on maize increased even more steeply, reaching 284 rubles per tonne. Analysts attributed the jump to the grain damper mechanism, which responded to rising world prices and a weakening ruble.
Market participants argue that stabilisation requires lifting restrictions on agricultural exports altogether, including duties on oilseeds, and abandoning the grain export quota for the current season. An export quota is a quantitative limit on shipments set by the government for a defined period; in agriculture it is used to support food security and restrain domestic prices, but it can leave producers with overstocked warehouses.
Black Sea competitiveness
The current weakness contrasts with conditions reported a month earlier. On 22 July, the export price of Russian wheat with 12.5% protein was up by $2 per tonne, supported by rising tension in the waters of the Sea of Azov and the Black Sea, drought in the United States and deteriorating crop prospects in France. Over the same period French and Romanian wheat gained $16 to $19 per tonne.
That gap between modest gains for Russian offers and much larger increases for competing European origins has now been followed by a slide in the domestic market, where the export duty, restricted shipments and the seasonal harvest peak are all working in the same direction. For now the adjustment is being absorbed at the farm gate in the south, and the size of any intervention programme will determine how much of it producers ultimately carry.
