Wheat prices in Russia fall below $100 per ton
Russian wheat prices have fallen below $100/ton in some regions as Black Sea export disruptions create domestic oversupply. Class 3 wheat prices in Rostov and Krasnodar start at RUB 8,200/ton, while August exports fell 56% year-on-year to 2 million tonnes, squeezing farmers despite rising global prices.
Wheat prices in some Russian regions have fallen below $100 per ton amid an oversupply of grain and sharply reduced export opportunities through the Azov-Black Sea ports. Purchase prices for Class 3 wheat in the Rostov region and Krasnodar Krai now start at RUB 8,200 per ton.
The decline in domestic prices contrasts sharply with the global market. Over the past month, wheat futures have risen by around 16.5%. In mid-August, US wheat was trading at around $283/t, while Russian wheat in Novorossiysk had fallen to about $215/t.
Pressure on the Russian market has intensified due to problems with grain shipments. Disruptions and restrictions at port infrastructure have resulted in substantial volumes of the new crop accumulating on the domestic market. According to Reuters, disruptions to Black Sea exports have already created a grain surplus inside Russia and triggered a sharp decline in purchase prices.
Exports, meanwhile, remain at multi-year lows. According to SovEcon, Russia exported around 2 mln tons of wheat in August, down 56% year-on-year and roughly 60% below the five-year average. September shipments could reach only 1.8–2.3 mln tons compared with 4.8 mln tons a year earlier, potentially the lowest September volume since 2010.
As a result, Russian farmers have found themselves caught in a price squeeze: global wheat prices are rising while Russia’s domestic market is moving in the opposite direction. Amid depressed prices, Russian agricultural associations are already calling for a reduction in winter crop area to prevent a further build-up of grain stocks next season.
Small and medium-sized farms are likely to be hit hardest by the current price collapse, as they have considerably smaller financial buffers than large agricultural holdings. Many also lack sufficient on-farm storage capacity and cannot afford to postpone sales until exports and prices recover. As a result, some producers are being forced to sell their crop at current depressed prices, further weakening their financial position ahead of the next planting campaign.
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Source : Ukr Agro Consult
