Russia is working to divert part of its grain exports to ports in the north and on the Baltic Sea after shipping through the Black Sea was disrupted as Ukrainian drone attacks intensified, while its grain exports fell by more than 50% year on year during September.
Preparing northern and Baltic ports
The state has refurbished the commercial port of Murmansk in the north of the country to receive and export grain. It has a capacity of 24 million tonnes a year, making it Russia's fourth-largest port. Grain exports from the port are due to begin next October.
On the Baltic Sea, Russia has turned to the port of Ust-Luga to export grain. The port has a terminal with a capacity of 37 million tonnes dedicated to fertiliser.
Higher costs and limited capacity
The alternative routes face logistical challenges, most notably the distance between the northern and Baltic ports and Russia's main agricultural production areas in the south, which is driving up transport and logistics costs. These ports also have limited capacity, while their infrastructure is not equipped to receive large grain carriers as efficiently as the ports on the Black Sea.
The difficulty of replacing the main route is underscored by the fact that Black Sea ports handle around 90% of Russia's seaborne grain exports. Russia, the world's largest wheat exporter, shipped more than 46 million tonnes of grain through the sea last season, out of total exports of around 55 million tonnes.
Russian grain exports fall
Russian grain exports fell by more than 50% year on year during September, bringing monthly flows to their lowest level since 2010.
Grain exports stood at 1.4 million metric tonnes, equivalent to 1.4 billion kilograms, between Aug. 1 and Aug. 20, less than half their level during the same period last year and the lowest in 10 years, according to the Russian Grain Exporters and Producers Union.
Ukrainian attacks on ports and vessels in the Black Sea and the Sea of Azov have almost disrupted a route that normally carries more than 70% of Russia's grain exports.
Pressure on global food trade
Russian strikes have hit infrastructure used to export grain in Ukraine, including facilities operated by major global crop-trading companies. As exports through the Black Sea faltered, Ukraine turned to roads, railways and shipping terminals on the Danube River. Parts of these networks were later targeted, while Danube shipments faced difficulties because summer heat lowered water levels.
The Black Sea is one of the world's most important agricultural export corridors. Markets in Africa, the Middle East and Asia depend on Ukrainian ports, while Russia supplies about one tonne of every six tonnes of wheat traded globally.
Matt Dara, a grain and oilseed markets analyst at Kepler, said Black Sea wheat is usually the cheapest on global markets. He explained that buyers most sensitive to prices would have to reduce their imports or purchase at higher prices, potentially adding to global food-price inflation.
Global food commodity prices are nearing their highest levels since 2023, but remain well below the peak that followed the outbreak of the war in 2022, with no indication so far of a repeat of the price shock recorded at that time.
At the beginning of August, Turkish Foreign Minister Hakan Fidan said his country had drawn up a plan to ensure the safe passage of grain shipments and was holding discussions with both sides about it. Russian Deputy Foreign Minister Alexander Grushko, meanwhile, said Russia "sees no justification" for resuming the agreement.
