Russian Grain Market Suffering Losses — Ukrainian Intelligence

Russia's grain market is experiencing significant losses, according to Ukraine's Foreign Intelligence Service (FISU). The shutdown of key terminals in the Azov-Black Sea basin, which handles 88% of Russia's maritime grain exports, has led to a collapse in purchase prices and disrupted export plans. Ukrainian intelligence reports that fourth-class wheat prices in southern regions fell by 19% in a single week, with export forecasts plummeting from 3.1 million tons to 1.8 million tons. The price decrease has spread to central and Volga regions, with losses of 8% and 3% respectively.

The 2026 harvest is forecasted at 140 million tons, but the wheat export forecast for the 2026/27 season has been reduced to 44.6 million tons. This will result in an accumulation of unsold grain, rising storage costs, and forced sales at reduced prices, particularly for farms with limited storage capacity. FISU officials also note that Russia's standing in foreign markets is weakening, as grain prices in Novorossiysk have dropped by $6 per ton, while prices in Europe and the US are increasing.

The attractiveness of Novorossiysk grain due to its low cost is no longer sufficient to offset restricted port access, causing importers to seek alternative suppliers. However, overland transit routes through Azerbaijan to Armenia and Baltic ports can only accommodate a small fraction of the lost volume. The shut-down terminals are also experiencing losses, but the FISU emphasizes that farms that took out loans will suffer the most severe consequences.

Unable to buy seed, fertilizer, and fuel, these farmers may reduce winter sowing and face a smaller harvest next season.