The battle with the harvest: The huge reserve of grain in Russia does not allow farmers to earn money

Wheat

Published Feb 26, 2024

Tridge summary

Russian grain prices are at a six-season low due to surplus reserves from two consecutive years of rich harvests, despite rising production costs and steady demand from processors and exporters. As of January 1, grain reserves were at a record high of 36.5 million tons, 1% higher than last year, with wheat reserves at processing enterprises 5% higher at 14.7 million tons. The situation is expected to persist until the 2024/2025 season, with the possibility of the 2023/2024 season also ending with unprecedentedly high reserves.

Disclaimer: The above summary was generated by a state-of-the-art LLM model and is intended for informational purposes only. It is recommended that readers refer to the original article for more context.

Original content

World grain prices remain low, and on the domestic Russian market they are under additional pressure from huge volumes of reserves accumulated over two harvest years in a row. Farmers find themselves in a kind of trap, since grain production costs are rising, and they are unable to compensate for losses through higher selling prices. Will market players face a series of bankruptcies if the situation does not change, and should we expect prices to rise? Forbes looked into grain prices in Russia have remained low for several years in a row. Their level depends on the balance of supply and demand, which has changed in recent seasons due to a rich harvest and huge stocks of grain in storage. The cost of production continues to rise, as in all other sectors of agriculture, and farmers work on the edge of profitability, sometimes going into the red. Despite active exports and continuing demand from processing enterprises and traders, carry-over stocks in the country have reached record ...

Source: Zol