In 2019, one quarter of the world’s grain exports originated from Russian and Ukraine1


fields, with


the implication that any disruption in supply there would have far-reaching consequences, with the world’s poorest bearing the brunt. The ongoing conflict between Russia and Ukraine has significantly impacted global grain markets, with Russia leveraging its position as a leading grain exporter to influence prices and supply chains. This report examines the dynamics of Russia’s grain export market amid the war, focusing on strategies such as supply manipulation to affect global prices.


Russia has established itself as a dominant player in the global grain market, particularly in wheat exports. In the 2022/23 season, Russian wheat exports reached a record 45 million tonnes, a 36% increase from the previous year2


position as the world’s largest wheat exporter, surpassing the European Union’s 35 million tonnes over the same period3


.


The conflict has disrupted traditional grain export routes, particularly through the Black Sea, affecting both Ukrainian and Russian shipments. Ukraine, once a major grain exporter, has faced significant challenges due to port blockades and infrastructure damage. Conversely, it is apparent that Russia has sought to capitalise on these disruptions, seizing the opportunity to increase its market share and influence global grain prices to its benefit.


SUPPLY MANIPULATION


AND PRICE CONTROL In October 2024, Russia’s agriculture ministry set a minimum price of USD 250 per metric tonne for wheat at international tenders4


. It was reported this


move was aimed at curbing high-volume exports and addressing domestic inflation concerns. Exporters were also advised to avoid involving third parties and to sell directly to buyers, ensuring adherence to the new price floor.


Additionally, the Russian Grain Exporters Union announced indicative wheat export quotations starting at USD 240 per tonne for October 2024, with a gradual increase to $250 by December 2024. This strategy sought to enforce a price floor, addressing concerns about dumping practices and rising production costs5


.


1 Russia’s war in Ukraine sparked a historic food crisis. It’s not over | CNN Business


2 Explainer: Have Western sanctions on Russia impacted its wheat exports? | Reuters


3 Rising European Wheat Prices Impact EU Exports and Boost Russian Supplies - Commodity Board Europe GmbH


4 Exclusive: Russia sets price floor for wheat at international tenders, sources say | Reuters


5 Revealed: Russia’s Bold Move to Control Wheat Prices Shakes Global Grain Markets


14 | ADMISI - The Ghost In The Machine | Q4 Edition 2024


By leveraging its dominance in the global grain market and disrupting agricultural exports from Ukraine, Russia has created ripple effects that threaten food security worldwide, particularly in regions dependent on cheaper grain imports from region. It is clear to assume that Russia sought to in effectively ‘weaponise’ food during the ongoing conflict mainly through the following ways:


Naval Blockades: Following the full-scale invasion in February 2022, the Russian Navy imposed blockades on key Ukrainian Black Sea ports, such as Odesa and Chornomorsk. This blockade prevented the export of millions of tonnes of grain, severely impacting global food supply chains6


. . This surge solidified Russia’s


Attacks on Infrastructure: Russian forces have targeted critical agricultural infrastructure in Ukraine, including grain silos, warehouses, and port facilities7


THE


HUMANITARIAN CRISIS CAUSED BY FOOD SHORTAGES HAS BEEN USED AS A BARGAINING TOOL IN NEGOTIATIONS.


. These attacks not only reduced Ukraine’s


export capacity but also raised fears of long-term disruptions in global grain availability. With Ukraine unable to export its usual volumes of wheat, maize, and sunflower oil, global food prices surged. The blockade of Ukraine’s ports left countries in Africa and the Middle East particularly vulnerable, as many of them rely heavily on affordable grain from the region.


Russia has also used its control over grain supply to influence global prices. By selectively allowing or restricting grain exports, Russia has managed to manipulate market dynamics, driving prices up or stabilising them to suit its strategic interests (Graph 1).


The Black Sea Grain Initiative, brokered in July 2022 by the United Nations and Turkey, briefly allowed safe passage for Ukrainian grain exports. However, Russia’s withdrawal from this agreement in July 2023 led to renewed blockades and attacks on port infrastructure, causing a spike in grain prices8


.


6 Ukraine war: Grain ships leave Ukraine ports despite Russian pull-out - BBC News


7 Spotlight on Damage to Ukraine’s Agricultural Infrastructure since Russia’s Invasion


8 Ukrainian grain exports explained - Consilium


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