Grain Hits a Bottleneck at the Ports

According to Vedomosti, the Ministry of Agriculture is considering a temporary moratorium on the floating export duty on wheat, barley, and corn through year-end, as Russian producers face sharply declining procurement prices amid problems exporting grain through the Azov-Black Sea basin, which accounts for over 70% of exports.

The measure should ease the burden on producers, but won't by itself restore the market's previous throughput capacity. The industry's main problem right now isn't in the duty formula—it's between the elevator and the port.

Global prices are rising, Russian prices are falling

The contrast is especially visible in external prices. According to the Rusagrotrans analytical center, between August 11 and 18, U.S. SRW wheat rose by $15/ton to $283/ton, while Romanian wheat climbed $10/ton to $268/ton. French wheat, by contrast, edged slightly lower—down $1/ton to $259/ton. Russian wheat in Novorossiysk lost $6/ton over the same week, trading at $215/ton.

The reason lies in shipping restrictions in the Azov-Black Sea basin, which since July 2026 have sharply curtailed the physical export capacity for grain. In the third ten-day period of July, wheat shipments from the region fell 55% year-on-year, while in Rostov-on-Don they dropped 3.7-fold, and river-sea vessel transport virtually ground to a halt.

Rerouting flows to the Baltics doesn't fully solve the problem: it adds $35–50 per ton in costs for rail transport, transshipment, freight, and insurance. So high global quotes don't automatically translate into producer profits: exporters factor more expensive logistics, scarce transshipment capacity, and delivery disruption risks into their procurement prices.

The problem is especially acute in the South. Krasnodar and Stavropol territories, along with Rostov region, are export-oriented and collectively produce up to 25 million tons of grain (nearly half of Russia's total exports last year). When the main export route operates with disruptions, these regions are the first to face excess supply in the domestic market.

There's a harvest, but it's becoming hard to sell

As of August 10, 2026, Russia had harvested more than 72 million tons of grain, including over 60 million tons of wheat—11% more than a year earlier. Yet the export channel has narrowed considerably this season. In July, the country exported 2.026 million tons of major grain crops, down 37.6% from July 2025. Wheat exports fell 17.7% to 1.8 million tons. In August, the pace slowed even further: between August 1 and 20, about 1.4 million tons of grain were shipped abroad, 2.5 times less year-on-year, including just over 1 million tons of wheat—2.6 times less.

For comparison, in the 2025/26 season Russia exported more than 61 million tons of grain versus 53 million tons the year before. Wheat exports totaled 46–46.5 million tons from a harvest of 91.1 million tons. Back then, robust exports helped clear the domestic market; now the slowdown in shipments is leaving more grain inside the country.

This is already showing up in prices. With the 2026 harvest costing 12,000–13,500 rubles/ton to produce, farmers are selling grain at a loss of several thousand rubles per ton. At deepwater ports with truck delivery, wheat is trading around 12,000 rubles/ton, down 1,400 rubles/ton over the week. In the South, where dependence on seaborne exports is particularly high, the price of grade 4 wheat on EXW elevator terms fell 2,200 rubles/ton over the same week, to 8,900–10,000 rubles/ton excluding VAT. 

For farmers, this is becoming not just a profitability problem but a liquidity issue. Proceeds from selling the new harvest are needed to finance the next production cycle, and with exports slowing, grain sits longer in storage and ties up working capital. That's why a temporary duty waiver could give the market a much-needed breather: reduce the burden on export transactions, improve payment predictability, and partially support procurement prices.

The Duty Has Stopped Fulfilling Its Original Purpose

The floating export duty emerged in a different economic reality. It was introduced in 2021 to stabilize domestic prices for wheat, corn, and barley. The mechanism was designed to capture part of the additional income during periods of high global prices, keeping grain within the country, with the collected funds returned to farmers through subsidies.

The history of export restrictions began even earlier. In November 2007, duties were introduced as a tool to restrain grain exports at a time when Russia was just achieving self-sufficiency. By July 2008, they were eliminated.

Today the conditions have changed. The risk is not that the domestic market will lack grain and prices will spike. On the contrary, supply is sufficient, but producers face the impossibility of selling it at an acceptable price. Therefore, a mechanism created to protect the domestic market from overly expensive exports is now working in a direction contrary to producers' interests.

For the period from August 26 to September 1, the wheat duty rate was set at 1,012.1 rubles per ton, up from 721.1 rubles per ton the previous week.

The mechanism itself involves weekly rate revisions. For a normal market, such a system allows for quick responses to price changes. But with unstable logistics, it adds uncertainty at the moment deals are concluded. Traders must account not only for transportation costs, freight, storage, and insurance, but also the future duty amount. This risk ultimately affects the price they're willing to pay producers.

The duty currently takes about 7% of the grain's value. In a situation where domestic prices have already fallen 25-33% below cost, even such an additional burden becomes significant.

Eliminating the duty doesn't mean its entire amount will automatically go to farmers. Part of the effect may remain with exporters or go toward covering additional logistics and insurance costs. But removing this payment reduces one cost element and makes export deals more predictable.

This is precisely the main point of the proposed moratorium. It's needed not so much to stimulate exports as to avoid worsening producers' position at a time when the export channel itself is already facing constraints.

The Moratorium Will Help Money, But Not Ships

For farmers, it's not just the final price level that matters, but the ability to get paid for grain already produced. A zero tariff doesn't increase port capacity, doesn't solve shipping problems, and doesn't eliminate insurance risks. If a vessel can't be dispatched or the route becomes too expensive, reducing the tax burden alone won't create demand for additional volumes.

That's why the proposed moratorium should be viewed alongside other measures. According to sources, around 10 billion rubles are planned to support rail transportation of agricultural products destined for export. The Ministry of Agriculture is also considering grain purchases for intervention reserves, extending preferential loans for autumn fieldwork in regions struggling with shipments, and subsidies per ton of grain sold.

Together, these tools address different parts of the problem. Eliminating the tariff reduces the burden on export deals, supporting rail transport expands options for rerouting, interventions can ease pressure from excess supply on the domestic market, and preferential lending helps farms get through periods of low revenue.

That said, the effectiveness of each measure will depend on how quickly it takes effect. For farmers, the problem is immediate: grain has already been harvested, it needs to be sold, and proceeds from sales are needed for the next production cycle.

The main risk isn't the global market—it's Russian logistics

Russia's export problems now matter beyond just the domestic market. In the concluded 2025/26 season, Russia shipped 46.5 million tons of wheat abroad and retained first place among global exporters. According to the Ministry of Transport, Russian supplies accounted for about 21% of global wheat trade. The nearest competitor was the European Union with 31.5 million tons of exports.

That's why a prolonged reduction in Russian supplies could affect buyers in countries traditionally dependent on Black Sea grain. This is already visible in market reactions. Against the backdrop of disruptions to Black Sea supplies, India on August 24 lifted its longstanding ban on wheat and wheat product exports.

India's decision doesn't mean Russian exports can be quickly replaced. Russia retains one of the largest supply volumes on the global market, and its wheat remains in demand among major buyers. In the 2025/26 season, Turkey purchased about 7.3 million tons of Russian wheat, Egypt increased purchases by 6%, Israel by 21%, while shipments to Sudan doubled to 2.2 million tons.

At the same time, the global market as a whole has significant grain volumes. For the 2026/27 season, the FAO projects grain production at 2.983 billion tonnes, with wheat production at 806.5 million tonnes. IGC and USDA estimates for wheat are higher—817 million and 819.3 million tonnes respectively. USDA estimates global ending wheat stocks at 273.3 million tonnes. In other words, there's no talk yet of an inevitable global shortage: other exporters can compensate for part of Russia's volumes. But such substitution will take time and may cost buyers more.