russia has faced problems exporting grain from the new harvest. In August, its shipments fell 2.5-fold, while in September wheat exports may drop by more than half again. This is reported by the Foreign Intelligence Service of Ukraine, according to UNN.
Details
russia is failing to ship out grain from the new harvest in time. From August 1–20, exports fell 2.5-fold, to 1.4 million tonnes, while wheat exports fell 2.6-fold. In September, wheat exports may decline by a further 52.1–62.5%, to 1.8–2.3 million tonnes—the lowest level since 2010. Excess grain is driving down the domestic market. Over the week, prices for wheat, barley, sunflower and soybeans fell by 3.3–8.5%, and over the year by more than 40%
In addition, according to available information, on August 28 Rostov Region, which accounts for nearly 10% of russia’s harvest, introduced a state of emergency due to problems with grain exports.
the kremlin is responding by preparing state purchases, concessional loans, subsidies and loans secured by unsold crops. The cancellation of the export duty and compensation for expensive shipments to alternative ports are also being considered. This will not solve the problem. Up to 70% of russia’s grain exports passed through southern ports, while alternative routes lack sufficient capacity. Transporting grain to the Baltic Sea adds $30–50 per tonne, making exports even less profitable
According to the intelligence service, the problems have already affected major agricultural companies. Net profit at the russian agricultural holding Rusagro collapsed by 99% in the first half of the year—from 4.8 billion to 55.88 million rubles.
The state is effectively paying for grain to remain in storage. Concessional loans will not create demand, subsidies will not increase port capacity, and cheap money will not replace broken logistics. If exports do not recover, stocks will grow, prices will fall, and the losses will be shifted onto the budget and banks of the russian federation
Previously
Due to the shutdown of ports in Rostov Region, grain that cannot be exported has piled up. Wheat exports have fallen to their lowest level in 16 years.