Positioned at the forefront of global agricultural commerce, Russia commands a formidable presence thanks to its agricultural sector's abundant fertile acreage and advanced cultivation techniques. Its expansive geographical expanse, spanning from the western boundaries of Europe to the eastern edges of Asia, bestows the nation with a diverse climate suitable for cultivating a broad range of grain crops.
A nation steeped in agricultural tradition, Russia has recently witnessed an astonishing upswing in its grain exports, fundamentally altering the landscape of the international grain market. This surge in export activity has not only solidified Russia's economic stature but has also substantially impacted global food security. Nations worldwide increasingly rely on Russia to fulfill their requirements for vital crops, cementing its pivotal role in the worldwide food supply chain.
Under the watchful eye of Russian farmers, a flourishing assortment of wheat, barley, corn, and diverse cereals illustrates this nation's agricultural abundance. These bumper harvests stand as the linchpin of the nation's export-oriented economy. Bolstered by strategic outlays in modern agricultural technology and infrastructure, Russia dominates the world's leading grain exporters, armed with an impressive production capacity tailored to market demands.
Sputnik unravels how Russia's grain export industry has transformed the nation's economic landscape and explains this industry's key trends.
What is Russia's Agricultural Land Area?
According to Russia’s Federal Service for State Registration, Cadastre and Cartography (Rosreestr) 2020
report, agricultural lands are recognized as lands outside the borders of settlements provided for the needs of agriculture or intended for these purposes. Lands of this category act as the primary means of production in agriculture, have a special legal regime and are subject to special protection aimed at preserving their area, preventing the development of negative processes, and increasing soil fertility.
As of January 1, 2021, the area of agricultural land amounted to 941.38 million acres. In comparison with the previous year, the area of the category of agricultural land as part of the land fund of the Russian Federation decreased by 0.9 million hectares.
Distribution of Russia's Agricultural Land Area in 2020.
Land designation | Area (million hectares) | % Category |
Agricultural Land, including: | 197.8 | 52.0 |
a. Arable Land | 116.2 | 30.5 |
b. Fallow Land | 4.4 | 1.2 |
c. Perennial Planting | 1.2 | 0.3 |
d. Hayfields | 18.7 | 4.9 |
e. Pastures | 57.3 | 15.0 |
Forest Area | 22.1 | 5.8 |
Forest Land | 19.2 | 5.0 |
Lands Under Roads | 2.3 | 0.6 |
Developed Land | 1.1 | 0.3 |
Land Under Water | 13.1 | 3.4 |
Other Lands | 125.2 | 32.9 |
8 September 2023, 06:09 GMT
How Big is the Russian Grain Market?
As per an August 30, 2023
update from the Ministry of Agriculture, Russia's gross grain harvest has surpassed an impressive milestone, reaching over 105 million tons. Winter sowing operations are underway in 43 Russian regions, with a substantial 1.7 million hectares sown, and with plans to hit 20 million hectares.
"In the country as a whole, grain harvesting has crossed the equator, and over 105 million tons have been threshed. Other crops are also being harvested according to schedule, including rapeseed, potatoes, sugar beets, and vegetables," Russian Minister of Agriculture Dmitry Patrushev stated.
In a remarkable feat, Russia set a new record for its gross grain harvest in 2022, amassing a staggering 157.7 million tons, marking a 29.9 percent uptick compared to 2021. Notably, the wheat yield stood out, reaching an impressive 104.2 million tons, reflecting a remarkable 37 percent increase.
Incorporating the yield from recently reunified regions, the Ministry of Agriculture in the Russian Federation envisaged the 2023 grain harvest to tally up to 123 million tons. Of these, 78 million tons are projected to be wheat, leading to an upward review of the initial forecast.
Agricultural Minister Patrushev has highlighted the imperative to adopt a holistic approach in concluding the grain harvest within the most favorable agrotechnical window and closely monitoring winter sowing efforts. Equally crucial is the expeditious allocation of state support funds to agricultural practitioners. The national metric stands at an impressive 80 percent, surpassing last year's baseline on the same date.
Outperforming the initial projections, Russia's grain export results for the 2022/2023 season in the international market have outshone expectations. Analysts at Rusagrotrans said the country had exported 61.3 million tons of grain. When accounting for legumes and flour (in terms of grain), the total rises to 64.5 million tons.
“This is an absolute record since the 2017/2018 season, when 54 million tons of grain were shipped to foreign markets (including flour and legumes - 56 million tons). Wheat exports in the past season amounted to 49.2 million tons, which is 16.3 million higher than in the 2021/2022 season and 7 million more than the record for shipments of the 2017/2018 season,” remarked the Head of the analytical center at Rusagrotrans JSC, Igor Pavensky.
Considering the Eurasian Economic Union (EAEU) member nations, the forecast for wheat exports in August 2023 has been boosted from 5.14 million to an outstanding 5.36 million tons, marking a record-breaking figure. The volume of grain exports is projected to reach around 6.75 million tons, establishing a historic milestone in Russian exports. The previous peak of 6.15 million tons was achieved in March 2023, according to Rusagrotran's analysis.
Industry experts point to an oversupply situation as the driver behind weakening domestic prices. Specifically, prices for fourth-class wheat with a 12.5 percent protein content at deep-water ports have declined, ranging between about $165.24 to $168.36 per ton, excluding VAT.
Arkady Zlochevsky, who heads the Russian Grain Union, revealed that Russia has a strong chance of eclipsing last season's impressive grain export record of 60 million tons in the agricultural year from July 1, 2023, to June 30, 2024. An astounding 7.7 million tons of grain were exported in August, a benchmark praised by Zlochevsky as an absolute high point for monthly exports.
5 September 2023, 17:03 GMT
"Prospects for the harvest are excellent. Considering that carryover stocks are at historically record levels, our total amount of resources allows us to export even more than last season…..The pace of shipments is now, again, at absolutely record levels. We have exported 13 million tons in two months since the beginning of the season; the previous record for two months was 11 million tons," he added.
Where Are Russia's Grain-Producing Regions?
The strength of Russia's agricultural sector lies in its vast and manifold topography, traversing continents. Nonetheless, certain regions have emerged as indispensable sources of grain production, marked by their unique climate, soil compositions, and agricultural methods that ensure ample yields that sustain the nation and play a crucial role in global food security.
Southern Federal District: This region, encompassing Krasnodar Krai and Rostov Oblast and others, is a powerhouse in Russia's grain production due to its temperate climate and fertile soil; it contributes significantly to the country's wheat, barley, and leguminous crop output.
Gross Grain and Legume Yields in the Russian Federation in 2022.
Federal Subjects | Tons (in thousands) | Percentage Gain/Loss |
Krasnodar Region | 1,5458 | +4.5 |
Rostov Region | 1,5252 | +12 |
Volgograd Region | 7,008 | +70 |
Republic of Kalmykia | 707 | +18 |
Republic of Adygea | 618 | -5.6 |
Astrakhan Region | 81 | +29 |
North Caucasian Federal District: Nestled in the southern reaches of Russia, this district is a rising star in grain production. The regions of Stavropol Krai and the Kabardino-Balkarian Republic, etc., are notable for their contributions, further diversifying Russia's grain output.
Gross Grain and Legume Yields in the Russian Federation in 2022.
Federal Subjects | Tons (in thousands) | Percentage Gain/Loss |
Stavropol Krai | 9,319 | +0.8 |
Kabardino-Balkarian Republic | 1,319 | +2.5 |
Republic of North Ossetia | 784 | -10 |
Chechen Republic | 517 | +3.6 |
Karachay-Cherkess Republic | 410 | +0.9 |
Republic of Dagestan | 465 | +3.3 |
Republic of Ingushetia | 148 | +9.5 |
Central Federal District: The core agricultural region belting Moscow, including Moscow Oblast and Vladimir Oblast, etc., has a rich history of grain production. Its strategic location, close to major transportation networks, positions it as a vital contributor to Russia's grain exports. This region's fertile plains have played a pivotal role in sustaining the nation.
Gross Grain and Legume Yields in the Russian Federation in 2022.
Federal Subjects | Tons (in thousands) | Percentage Gain/Loss |
Voronezh Region | 6907 | +61 |
Kursk Region | 5735 | +27 |
Tambov Region | 4528 | +27 |
Belgorod Region | 4086 | +33 |
Lipetsk Region | 4001 | +34 |
Oryol Region | 3910 | +3.3 |
Ryazan Region | 3066 | +37 |
Tula Region | 2672 | +21 |
Bryansk Region | 1876 | -5.7 |
Moscow Region | 645 | +45 |
Smolensk Region | 354 | +28 |
Kaluga Region | 261 | +31 |
Vladimir Region | 216 | +21 |
Tver Region | 156 | +52 |
Yaroslav Region | 108 | +109 |
Kostroma Region | 57 | +47 |
10 September 2023, 12:00 GMT
Volga Federal District: Stretching along the iconic Volga River, this district, including Tatarstan and Samara Oblast, and others, plays a pivotal role in Russia's grain production due to the vast plains and access to vital waterways that facilitate the cultivation of various grains, including wheat, barley, and oats. It is a testament to the harmonious interplay of geography and agriculture.
Gross Grain and Legume Yields in the Russian Federation in 2022.
Federal Subjects | Tons (in thousands) | Percentage Gain/Loss |
Saratov Region | 6793 | +84 |
Repulic of Tartarstan | 5213 | +122 |
Republic of Bashkortostan | 5004 | +143 |
Orenburg Region | 4014 | +156 |
Samara Region | 3657 | +87 |
Ulyanovsk Region | 2114 | +81 |
Nizhny Novgorod Region | 1753 | +44 |
Penza Region | 3270 | +45 |
Republic of Mordovia | 1648 | +45 |
Chuvash Republic | 1009 | +82 |
Udmurt Republic | 889 | +83 |
Kirov Region | 747 | +43 |
Perm Region | 445 | +72 |
Mari El Republic | 382 | +83 |
Siberian Federal District: Despite its harsh climate, the vast expanse of Siberia has emerged as a player in grain cultivation. Regions like Omsk Oblast and Novosibirsk Oblast have embraced cold-hardy varieties, demonstrating that agriculture can flourish even in the most challenging environments.
Gross Grain and Legume Yields in the Russian Federation in 2022.
Federal Subjects | Tons (in thousands) | Percentage Gain/Loss |
Altai Republic | 5648 | +1.3 |
Novosibirsk Region | 3356 | -0.8 |
Omsk Region | 2916 | -0.7 |
Krasnoyarsk Region | 2871 | +9.3 |
Tomsk Region | 453 | +12 |
Republic of Khakassia | 142 | -8.7 |
Kemerovo Region | 1833 | +18 |
Irkutsk Region | 920 | +0.2 |
Tuva Republic | 13 | -43 |
Altai Krai | 12 | +7.3 |
Northwestern Federal District: Despite its cooler maritime climate, this region, including Leningrad Oblast and Pskov Oblast, adds its unique contribution to Russia's grain production.
Gross Grain and Legume Yields in the Russian Federation in 2022.
Federal Subjects | Tons (in thousands) | Percentage Gain/Loss |
Kaliningrad Region | 689 | -3.6 |
Vologda Region | 178 | +64 |
Leningrad Region | 172 | +23 |
Pskov Region | 170 | +15 |
Novgorod Region | 21 | -38 |
Far Eastern Federal District: Though less prominent in grain production compared to other regions, areas like Primorsky Krai and Khabarovsk Krai play their part in contributing to Russia's overall grain output. Even in the Far East, grain cultivation finds a place in the nation's agricultural tapestry.
Gross Grain and Legume Yields in the Russian Federation in 2022.
Federal Subjects | Tons (in thousands) | Percentage Gain/Loss |
Primorsky Krai | 641 | +23 |
Amur Region | 447 | +4.9 |
Republic of Buryatia | 117 | -4.5 |
Jewish Autonomous Region | 10 | +35 |
Khabarovsk Krai | 16 | -0.3 |
Note: Some regions and the Ural Federal District were not included due to lack of data.
Gross Cereal and Grain Production Volume in Russia from 2018 to 2024*, by Federal District
Federal District | 2018 Production Vol. (in 1,000 metric tons) | 2024* Production Vol. (in 1,000 metric tons) |
Central | 28,540 | 34,292 |
Far Eastern | 743 | 863 |
North Caucasian | 11,980 | 13,555 |
North Western | 753 | 1,172 |
Siberian | 15,157 | 16,514 |
Southern | 29,156 | 35,702 |
Ural | 5,464 | 5,818 |
What Country is the Biggest Exporter of Wheat?
According to the International Agricultural Trade Report released by
USDA last May, a decade has witnessed a substantial upswing in Russia's production of grains and oilseeds. This surge results from a two-pronged strategy: expanding cultivated areas for select crops and improving yields for others (excluding corn and sunflower seed) has positioned Russia as the world’s largest wheat exporter.
Top 5 Global Wheat Exporters as per USDA's estimates of 2022/2023 Marketing Year
Country | Percentage Global Share (≈ %) |
Russia | ≈ 20 |
The European Union | ≈ 16 |
Australia | ≈ 12.5 |
Canada | ≈ 12.5 |
The United States | ≈ 11 |
In the current marketing year, the monthly volume of Russian wheat exports via sea routes has displayed a considerable variance, from 2.0 to 4.5 million tons, with an average of roughly 3.5 million tons. The main destinations for sea-borne vessels in this trade (between June 2022 and June 28, 2023) have encompassed:
Russian agricultural exports are growing steadily. Compared to 2017, its volume almost doubled and, in 2022, reached $41.6 billion. At the same time, the share of friendly states among buyers of our products has increased - in 2023, it gained 87 percent. Countries in Asia and the Middle East began to play a leading role. Thus, exports to China and Turkey increased almost 3 times to Iran - nearly 6 times. Russia started exporting wheat to Algeria and Saudi Arabia, poultry meat supplies were established to China and the Persian Gulf countries, and pork to Vietnam. The export of oil and fat products to India and China has expanded, says Russia’s Deputy Minister of Agriculture Sergey Levin.
Export Volume of Cereals from Russia between 2019/2020 and 2022/2023 (in million metric tons)
Year | Exports (in million metric tons) |
2019/2020 | 43.06 |
2020/2021 | 49.3 |
2021/2022 | 39.44 |
2022/2023 | 53.29 |
Agri-food Exports Distribution from Russia in 2022, By Product Category
Product Category | Percentage Distribution (%) |
Cereals | 32 |
Fats & Oil Products | 22 |
Fish & Seafood | 14 |
Food & Processing Industry Products | 13 |
Meat & Dairy | 4 |
Other Agri-food Products | 15 |
4 September 2023, 19:12 GMT
How Russia's Fertilizer Production Plays a Role in Grain Production
The global fertilizer industry, valued at $250 billion, faced a notable disruption last year, underscoring the pivotal roles of Russia and Belarus as prominent exporters, accounting for nearly a quarter of all global crop nutrients. Russia's substantial grain production heavily relies on fertilizer, which provides vital nutrients like nitrogen, phosphorus, and potassium, crucial for robust plant growth.
A resilient domestic fertilizer production sector is imperative to adequately meet the agricultural sector's demands. Russia produces phosphate and potash fertilizers, which are essential for grain cultivation.
Phosphate fertilizers offer phosphorus vital for root development and flowering, while potash fertilizers supply potassium crucial for various plant processes, including photosynthesis and water absorption. Consequently, the availability of these specific fertilizers directly impacts the quality and yield of grains.
Despite Russia's agricultural products, including crucial fertilizer types, not being directly targeted by Western sanctions in light of the Ukrainian conflict, their exports have been hampered by a combination of ports disruptions, and sanctions on shipping, banking, and insurance.
This market disruption led to a price surge last summer, prompting some to stockpile fertilizers if financially feasible. Although costs have decreased since then, they remain elevated compared to pre-COVID-19 levels. Availability of supplies is limited in less affluent regions, further exacerbated by sanctions on Belarus, a major potash producer. Additionally, China, a significant nitrogen and phosphate fertilizer producer, has imposed export restrictions to safeguard its domestic supply, with analysts not anticipating these measures to be lifted until at least mid-2023.
"Sanctions were imposed by countries that do not particularly need our fertilizers, and the developing markets now suffer from it. They imposed sanctions against us, but the developing markets of Africa, Latin America, and Asia suffered the most. The failure to put fertilizers in the soil leads to decreased harvest," President Vladimir Putin disclosed.
The African Development Bank cautions that reduced fertilizer use could result in a significant 20% decline in food production. The World Food Program (WFP) further warns that “a major food availability crisis as the fertilizer crunch, climate shocks and conflict upend food production.” Indian Prime Minister Narendra Modi has committed to prioritizing efforts to "depoliticize" the global fertilizer supply. In a December article for the Times of India, he emphasized the need to prevent geopolitical tensions from escalating into humanitarian crises.
The UN's Food and Agricultural Organization established a trade tracker the previous year, revealing a heavy reliance on Russia for over 30 percent of the three key fertilizer components in several net importing regions, including Latin America, Eastern Europe, and Central Asia.
2 September 2023, 12:02 GMT
Andrey Guryev, the Russian Association of Fertilizer Producers leader, during a meeting with President Vladimir Putin in April 2023, said, “We [Russia] overtook the United States and India in production, and today we are the largest producer of mineral fertilizers in the world after China.” He further stated that Russia is on the verge of increasing output to 70 million tons in the next five years.
An International Fertilizers Association data cited by media sources showed that at the beginning of 2022, Russian fertilizer exports constituted 15 percent of the world’s fertilizer exports, with China accounting for 13 percent and Canada 7 percent.
What Are the Key Trends in Russia's Grain Exports?
Russia's agriculture industry is strategically pivoting towards self-sufficiency, encompassing the production of grains, and other crops and the management of the resources crucial for their cultivation - seeds. At the heart of this endeavor is the nation's food security doctrine, which stipulates the target of having no less than 75% of seeds originating from domestic breeding programs by 2030. Russian agricultural experts have set an ambitious timeline to "substitute" sunflower and corn with homegrown alternatives by 2024–25.
"We are active supporters of domestic seeds and domestic selection. Every year we establish a large number of demonstration plots for testing various hybrids - in 2022 there were 76 of them. And based on the results, I can say that the seeds of domestic selection are already close to foreign ones in almost all main indicators. The task of organizing mass production of beet seeds is solved at a high technological level - in moisture-controlled areas, irrigated fields in the Republic of Crimea, using the most current methods - for example, two-stage (stacking technology) cultivation during one calendar season," expressed Salis Karakotov, General Director of JSC Shchelkovo Agrokhim, Academician of the Russian Academy of Sciences.
Agricultural machinery emerges as the second critical facet caught in the crosshairs of sanctions. The exit of American and European companies from the market creates fresh avenues for the growth of domestic agricultural machinery. Yet, experts lean towards a more cautious perspective. They suggest that farmers are poised to exercise prudence in this procurement aspect.
Russia's Export Destinations Faces Global South
The Rusagrotrans assessment reveals a shift in the core importing countries of Russian wheat for the first half of this season, deviating from the trends observed between July and November 2021. Notably, there has been a considerable spike in exports to North African nations, including Algeria, Libya, and Sudan, as well as heightened demand from the Middle East, particularly Saudi Arabia. Simultaneously, given the challenges faced in Argentina's harvest, the flow of Russian wheat to Brazil and Mexico has experienced substantial growth.
Scaling Up Crop Storage Infrastructure
Over the past five years, Russia has witnessed a notable leap in the existence of entities furnished with proprietary or leased warehousing and storage facilities. This includes a 25 percent rise for potatoes and vegetables, a 1.5-fold surge for grain, and an impressive fourfold upsurge for fruit crops. Additionally, 2022 bore witness to a flurry of statements surrounding the construction, acquisition, or modernization of grain conveyors by major industry players. Concurrently, farmers are deeply engaged in exploring innovative technologies for grain storage.
State Support for the Russian Agricultural Sector
The Ministry of Agriculture has outlined its plans to uphold support initiatives for farmers in 2023. Nonetheless, reductions in subsidies for grain producers and loans extended to exporters are on the horizon. The allocated budget for three pivotal state programs within the agricultural sector is set at about $4.6 billion for 2023, reflecting a decrease from the 2022 figure of roughly $4.8 billion.
Efforts are being taken to bolster the budget for state programs focusing on the comprehensive development of rural areas. Besides, emphasis is placed on optimizing the utilization of agricultural land and advancing land reclamation measures. The first program is poised to receive a considerable injection of almost $76.5 billion, elevating its total allocation to approximately $620 million. Likewise, the second program is set to benefit from an infusion to the tune of $13.2 billion, bringing its budget to about $397 million.
In the "
Where is the Margin 2023" summer conference, Deputy Minister of Agriculture of the Russian Federation, Elena Fastova, discussed key challenges and prospects in the agro-industrial complex. She highlighted several significant developments to foster state support mechanisms:
Expanded Preferential Lending: In 2023, the range of target areas for preferential loans has been dramatically expanded. These loans now cover various aspects such as the purchase of food forest resources for processing (up to 1 year), unmanned aerial vehicles (2 to 5 years), and technologies utilizing artificial intelligence (2 to 8 years). Additionally, farmers can now access preferential loans for the construction, modernization, and technical re-equipment of irrigation and drainage systems and facilities for producing feed and food additives, enzymes, and flavorings.
Unified Compensation and Incentive Subsidies: From 2024, compensating and incentive subsidies will be consolidated into a single mechanism. Twelve priority areas have been identified, with five automatically provided for subjects. These include agrotechnological work, livestock breeding support, elite seed production, agricultural insurance, and small-scale farming. Regions can select three additional directions from seven options: flax production, fruit and berry products, beef and goat breeding, and traditional sub-sectors like reindeer husbandry, milk production, and deep grain and milk processing.
Subsidies for Direct Costs: In 2024, some direct costs will be reimbursed through agro-subsidies. The preliminary selection of projects and allocation of funds is planned for the current year, and all subsidized areas will be maintained.
How Does Russia's Grain Exports Impact Global Food Security?
As per a study, the global population and corresponding demand for food are poised for a notable escalation in the forthcoming decades. Projections indicate that the Earth's population is on track to reach nearly 10 billion by the year 2050. A substantial proportion of this demographic expansion, roughly 60 percent, is anticipated to be concentrated in Sub-Saharan Africa and South-Eastern Asia. These areas will be pivotal in rising exhaustive wheat consumption in the next six years.
"High amounts of wheat are consumed in Sub-Saharan African and South-East Asian countries, but at the same time these countries have little prospects of satisfying additional domestic demand by increasing their own grain production," says Miranda Svanidze of Leibniz Institute of Agricultural Development in Transition Economies (IAMO).
As outlined in the OECD/FAO 2020 analysis, a significant rise in net wheat imports is on the horizon for Africa and Asia in the decade spanning from 2020 to 2029. The expected swell stands at around 10 million tons for Africa, with a more substantial 14 million tons anticipated for Asia.
Experts have stressed the central importance of Russia, the primary grain-exporting nation within the Black Sea region and globally, in the overarching landscape of international wheat trade. This prominence extends to its critical role in global food security, slated to expand in the years ahead. The rise in Russian grain production is contingent upon a two-pronged strategy: enhancing production efficiency and reclaiming formerly abandoned agricultural lands.
The outlook for domestic grain consumption in Russia remains on an even keel. A conceivable surplus could be channeled towards international markets. Notably, the proximity of Asian nations to Russia, in contrast to other grain-exporting countries, substantially heightens the likelihood of these countries leaning towards Russian grain imports in the future. Consequently, the exponential growth of grain production in Russia emerges as a crucial endeavor to address the mounting demands of agriculture and maintain global food security.