According to the Sovecon consulting firm, domestic grain prices have fallen by 36% in Russia since June due to a stop in exports via the Black Sea and the Sea of Azov. This has squeezed farmers' margins when the new crop is introduced on the market.

In the last four and a half years, the Black Sea trade has been at risk more than ever before.

The Black Sea was the route that 70% of Russia's grain exports were shipped to the Middle East and Mediterranean via the Black Sea. This has led to an oversupply on the domestic market.

Andrey Siov of Sovecon said that the current price was the lowest for this time in the year since at least five years. In dollar terms, the price is about 20% lower than the previous low set five years ago in 2023.

Russia has introduced a number of measures to boost exports. These include rerouting trade flows and scrapping the grain export duty. However, farmers and markets remain sceptical about their effectiveness.

Analysts estimate that a halt in exports will result in a surplus of 20 to 25 million tons of grain, given the fact that Russia's harvest is expected to be 140 million tons this year and its projected export potential at 60 million tons. (Reporting and editing by Conor Humphries; Gleb Bryanski)

(source: Reuters)

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