Frustrated expectations: Why Russian grain producers will not receive excess profits again

Published 2024년 7월 8일

Tridge summary

The article outlines the anticipated harvest and export expectations for the upcoming grain season in Russia, highlighting a decrease from the previous year's records but still promising a substantial yield. Despite these expectations, farmers are not optimistic due to fading hopes for higher prices, which fail to justify the costs. In spite of challenges such as reduced global supply and increased demand, the Russian agricultural sector remains resilient, with a significant expansion in export markets, including China, Indonesia, and Mexico. These developments, coupled with the creation of a BRICS grain exchange and the introduction of tariffs by the EU, are expected to impact the market dynamics. However, remote regions face challenges in profitability, with farmers reporting a decrease in profitability for grain crops to 10-15% in Southern regions and close to zero in the Volga Federal District.

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Original content

The new grain season will bring, although smaller than last year, but still a considerable harvest. Exports also promise to be quite active. However, the consistently high results of the industry do not yet inspire farmers. Hopes for rising prices are fading, and grain grains will probably again not show the desired profitability. The logic of “less harvest - higher prices” may not work in the new grain season (started on July 1). Not long ago, the head of the Ministry of Agriculture, Oksana Lut, said that her department expects prices to rise both on the global and domestic markets, including due to a reduction in supply. But so far there have been no significant positive dynamics in the grain market, and there are no prospects for an improvement in the price environment in the future, say experts interviewed by Forbes. The completed grain season 2023/2024 can be called positive in terms of yields and export volumes, experts say. “The Russian agro-industrial complex continues to ...

Source: Zol