Damning statements from Russian agricultural analysts. They now expect a 60% drop of the wheat exports in September, they are calling it a collapse and based on the Russian Grain Union data exports in the first 10 days of September were down actually 83% not 60%.
The estimated increase in transportation costs to the Baltic when compared to exports for southern producers via Novorossiysk is 40-50 USD per ton. For the majority that makes the route almost non viable even with railway subsidies. Prices are now below costs. The average price at which grade 3 and 4 wheat are sold in the Southern Federal district is 10-12 rubles per kg. This is below the costs to produce and in Krasnodar krai farmers are selling at 5-6 rubles per kilo or at half the cost to produce. In Rostov oblast things are even worse, farmers are selling at 4,5 rubles per kg. The proposed purchase campaign from the Ministry of Agriculture for 1 million ton is a drop in the bucket when there are tens of millions of tons that can't be exported. At least 10 million tons must be bought by the government from Stavropol and the southern regions to make a difference. Farmers will now switch to crops oriented towards domestic demand. Things like rapeseed that are turned into oil that's 90% exported won't be farmed. Source: kuban.rbc.ru youtube.com
kuban.rbc.ru