Russia’s grain market: Growing risks of fuel, logistics and contract execution

Russia is entering the 2026/27 grain season with a large crop estimations, substantial export potential and grains zero export duties. But the market focuses on the real grain crop size and on time deliveries to the export outlets and ports.

Fuel shortages, higher transport costs, restrictions in the Don-Azov shipping corridor and growing pressure on rail logistics are key challenges in the 2026/27 season. Sure, Russia will remain a major grain exporter, but the cost and reliability of these exports are becoming less predictable.

This creates an opportunity for Romania, Bulgaria, Serbia and other Black Sea-Danube-Balkan suppliers. Ukraine can also benefit, in spite of repeated attacks on ports.

Fuel shortage through the grain supply chain. 

Russia is introducing a complete ban on diesel exports while expanding mechanisms designed to encourage fuel imports.

• The government is treating the blending of straight-run gasoline with other components as fuel production
• Modernization deadlines for large refineries were extended
• Domestic compensation mechanisms are applied to imported fuel. The compensation coefficient for fuel imported from Eurasian Economic Union countries is also expected to increase through the end of 2026.

Imported fuel from Belarus can cover around 10% of domestic demand (estimated). Imports of petroleum products are also expected to expand from July, including reported gasoline shipments from India.

Officially reported retail prices do not fully mirror the real market situation. Agreements with the government to limit price increases at filling stations are possible, longer delivery times and much higher costs are reported.

Regional diesel price spread narrowed. This means high prices have spread across the country, leaving fewer opportunities to source cheaper diesel from neighboring regions.

Every additional 100 km of grain truck delivery is estimated to add around 25-32 RUB/mt (€0.26-0.34/mt) to freight costs. Over an average 500 km route, this increases logistics costs by approximately 125-160 RUB/mt (€1.31-1.68/mt).

The really paid prices may change, but the impact is growing and direct. Every extra rubble spent on moving grain reduces the farmer’s revenues.

Small farmers losses might be the highest. Large agricultural holdings appear to be relatively well supplied with fuel. Small and medium-sized farmers face the greatest pressure.

In southern Russia, wholesale diesel prices are reported at around 160 RUB/liter (€1.68/liter), with delivery periods of up to two weeks. Such delays are particularly damaging during a wet harvest season, when farmers have only short windows to enter fields.

In Crimea, diesel prices are reportedly reaching 250 RUB/liter (€2.62/liter), while barley prices are near 6,000 RUB/mt (€62.9/mt). At this relationship between fuel costs and grain prices, some farmers are reportedly questioning whether harvesting is economically justified.

There are also market rumors that individual small farms may prefer to sell available fuel and report unharvested crops as drought losses. This is unlikely to become a widespread practice and should not materially change the national grain balance. Nevertheless, the discussion itself is important.

Don–Azov disruption redirects grain toward rail. According to market reports, navigation in the Don-Azov system was suspended from July 10.

• Ships waiting in the Black Sea to enter the Azov Sea were redirected into open waters
• Ships inside the Azov Sea were moved toward the Don
• Vessels that completed loading in Yeysk, Azov and Rostov remained at berths awaiting further instructions
• Grain truck queues began forming near these ports almost immediately, while freight rates increased sharply due to security risks.

Large exporters are now trying to redirect grain flows toward rail routes to Novorossiysk and Taman. More grain moving by rail increases demand for wagons, raises tariffs, slows turnaround and transfers congestion from small Azov ports to the main southern export corridors. It looks unlikely that grain blocked in Azov sea will move smoothly through Novorossiysk. It will move, but probably more slowly and at a higher cost.

Summary of July 6-10 grain week  

• Combination of new market drivers that both offset and complement each other positively and/or negatively.
• The release of the USDA’s latest grain S&D against the Russian logistical restrictions, is already viewed as an old news.
• The decline in grain exports from Russia is driving up global prices, just as happened in 2022 after exports from Ukraine were blocked.
• Black Sea region (Romania, Bulgaria, Poland, and Serbia) may benefit from this situation in the coming months. Ukraine also may take advantage of the situation despite the ongoing attacks of POC ports by Russia.

Russia large grain crop 

• ProZerno reduced 2026 Russian grain crop forecast to 134.7 M mt from 136.4 M mt. Wheat production is estimated at 86.85 M mt, barley at 19.2 M mt and corn at 15.7 M mt.
• From July 15, the wheat export duty is expected to return to zero after previously increasing to 370.1 RUB/mt (€3.88/mt). Export duties on barley and corn remain at zero.
• Russia is also seeking to strengthen its position in Syria and neighboring markets by establishing a regional grain hub. Shipments through the hub are expected to exceed 250 K mt from July. According to Syrian customs data, in the 2025/26 season, approximately 85% of the wheat imported by Syria (2.9 M mt) were from Russia.
• These factors remain supportive for exports. However, zero duties and large production are useful only when grain can reach the buyer.
• The Russian rubble showed moderate volatility last week. The currency's appreciation was driven by domestic interbank transactions

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