Southern Russia Grain Prices Collapse Amid Export Crisis

Grain prices in southern Russia have stopped forming normally due to an export crisis. The market-based pricing system has broken down, and resellers are taking advantage of excess wheat supplies and farmers' limited storage capacity.

In the Rostov region and Krasnodar Krai, intermediaries are offering around RUB 5,000/t for milling wheat, or about $60/t. This is below production costs, estimated at RUB 11,000-13,000/t, or roughly $132-156/t.

Farmers are selling their grain at distressed prices to local processors and some volumes may be stored in anticipation of a recovery in exports. However, alternative shipments through Baltic ports have failed to restore meaningful export demand in southern Russia.