IKAR in Mass Media

FAO Liaison Office with the Russian Federation

FAO presents key trends in global grain production and trade in Altai Krai (Russia’s breadbasket)

On 26–27 February, the 19th Winter Grain Conference took place in the city of Belokurikha, Altai Krai. The annual event supported by the Government of Altai Krai and the Ministry of Agriculture of the Russian Federation was organized by the Union of Grain Processors of Altai, the ProZerno analytical company, and the Institute for Agricultural Market Studies (IKAR).

The forum participants focused on the key matters of industrial agriculture development, assessed the state of the winter crop area and the quality of last year’s wheat, and formulated baseline scenarios for developing export potential for the upcoming season. Moreover, experts discussed the forecasts for the growth rate of the Russian agricultural economy, the current configuration of the foreign trade balance and the development vectors of the global situation with grain.

The situation in Russian regions located quite far from major ports was considered as a separate topic. High logistics costs and price fluctuations on global markets create serious obstacles for them. At the same time, participants noted that these territories could become growth drivers if their potential for developing new segments in the Asian, Middle Eastern, and African markets can be realized.

When opening the conference, Sergei A. Mezhin, Minister of Agriculture of Altai Krai, spoke about the results of the agricultural year in the region. “In 2025, agricultural production increased by 13.7%. We exceeded the all-time high, with the grain and legume yield amounting to 6.6 million tonnes, allowing the region to maintain its fourth place in Russia. The region became an absolute leader in oilseed production, harvesting 3.4 million tonnes,” the head of the ministry emphasized.

“We export 80% of the products outside the region: in 2025, grain shipments reached a record of 2.3 million tonnes, 991 thousand tonnes of which went for exports and over 1.3 million tonnes were sent to the regions of Russia. Exports of processed products are also growing steadily, reaching 4 million tonnes, which is 1.7 times higher than in 2021. China and Kazakhstan remain the region’s main trading partners,” the Minister of Agriculture of Altai Krai summed up.

Igor Shpakov, Senior Consultant at the FAO Moscow Office, presented the key findings of the Impact of Disasters on Agricultural Production Losses publication. “The total global agricultural losses from natural disasters in the period from 1991 to 2023 are estimated at about USD 3.26 trillion. On average, it means almost 100 billion dollars a year or 4% of annual global agricultural GDP,” the expert highlighted. “Over the past three decades, disasters have caused the loss of 4.6 billion tonnes of cereals, 2.8 billion tonnes of fruits and vegetables, and 900 million tonnes of animal products.”

Photo: © Winter Grain Conference

Analysing the regional distribution of losses, the FAO representative noted that Asia accounts for largest share of global losses, around 47%. “These high figures reflect, on the one hand, the huge scale of Asian agricultural production, and on the other hand, the still underdeveloped infrastructure that remains extremely vulnerable to such impacts,” Igor Shpakov explained.

Moving on to the analysis of grain balances, the expert noted the record global grain stocks reaching 936.3 million tonnes, which is 7.8% (or 67.6 million tonnes) higher than at the beginning of the season. “This is a record high that is enough for five months of continuous grain consumption by all countries. At the same time, the ratio of stocks of main grain exporters to their use will reach 22.3%, which is the highest figure since the early 1990s, indicating fully sufficient supply in the global market,” the speaker stated.

According to FAO forecasts, global grain trade will amount to 501 million tonnes, exceeding the level of the 2024–2025 season by 3.7% (or 17.6 million tonnes). “Wheat will become the main growth driver: a significant recovery in trade in this crop is expected after last year’s decline,” Igor Shpakov noted. “Türkiye and China, which are resuming purchases, will be the key importers, along with Asian countries, which are demonstrating growing demand for food-grade wheat. Furthermore, large stocks and stable prices create favourable conditions for further expansion of trade flows.”

Commenting on the dynamics of world prices, the FAO representative said that in January 2026, the FAO Food Price Index averaged 123.9 points, down 0.4% from the previous month and 0.6% from its level in January 2025. “The decrease in the overall index was driven by falling dairy, meat and vegetable oil prices, while the sugar and cereal price indices showed moderate growth. In general, the FAO Food Price Index has been declining for five consecutive months, from September 2025 to January 2026, which is due to a remarkably bearish sentiment in the grain market,” the expert elaborated.

Photo: © Winter Grain Conference

“In our opinion, despite the negative trends, Russia will undoubtedly remain the world’s top wheat supplier in 2026, with a share of global exports of approximately 20%. However, with abundant harvests in competing countries, the prices will still be under high pressure. Seeing the rising supply, importers are in no hurry to stock up and purchase only as much as required to meet their current needs. Therefore, in foreign markets, Russia’s main export product – wheat – will compete with the increased capacities of the EU, Kazakhstan, and Argentina this season,” the FAO representative summarized.

Andrey Klepach, Chief Economist at the VEB.RF state development corporation, presented a forecast for the development of the Russian economy for 2026, outlining the key global trends and domestic challenges. “We are witnessing a fundamental change in the configuration of the global economy, with the centre of investment activity steadily shifting towards developing countries. While the current share of China in the global economy is 19%, the share of the EU is about 15%, and the one of India is 8%, by 2050, China’s share could reach 20–25%, and India’s share could amount to 16%, provided that there are no natural disasters,” the VEB.RF representative predicted, emphasizing that these structural shifts will determine the development trajectory of global markets, including the raw materials and food ones.

Moving on to the analysis of the domestic situation in Russia, Andrey Klepach focused on the currency exchange rate and budget risks. According to the expert, in the context of a potential key rate reduction and export volumes remaining moderate, the national currency may weaken: by the end of the year, the exchange rate is forecast at 87–89 roubles per US dollar. “According to our estimates, to accelerate economic growth in Russia, the national currency exchange rate needs to be lowered to 92–94 roubles,” the economist added. “At the same time, meeting budget obligations will pose a serious challenge for the financial system, since there is a high risk of the budget deficit increasing to 7.3 trillion roubles in 2026.”

In conclusion, the VEB.RF chief economist focused on the prospects for personal incomes and the consumer market. “In 2026, we predict declining consumer demand dynamics, which will require businesses to find new models for working with the market and optimizing costs. At the same time, agriculture will retain a high adaptive potential, but its fulfilment will require targeted support measures and the removal of infrastructure restrictions, especially in the area of logistics,” the expert summarized.

Dmitry Rylko, Director-General, Institute for Agricultural Market Studies (IKAR), characterized the current stage of the industry’s development as a period of strict government regulation aimed primarily at curbing inflation. “Today, the main priority in the Russian Federation is food affordability for the population. The government is prepared to take unprecedented measures: the introduction of Chinese poultry fillet to the Russian market and the liberalization of beef imports are the prime examples. All of this is being done to keep consumer prices under control,” the expert stated. “It is worth noting that in 2025, wholesale food prices in Russia acted as a deflator against the backdrop of the strengthening of the rouble, which rose by 31% against the dollar. This strengthening led to diverse processes in foreign trade: food exports fell to approximately USD 41 billion, while imports, on the contrary, increased to USD 44 billion, surpassing the volume of agricultural exports for the first time in a long while.”

The expert also noted a structural anomaly in the 2025–2026 season. “The outstanding feature is that the south of Russia harvested significantly less grain than usual, and the share of this traditionally key region in export potential turned out to be the lowest in the entire history of observations. This circumstance has caused significant logistical changes: the average distance for grain transportation by rail has increased to 1800 kilometres,” the head of IKAR detailed his thought. “We are witnessing a fundamental transformation of the logistics model: the focus is shifting from areas close to ports to remote regions, which requires a revision of the transportation policy and probably additional state support measures to maintain the competitive ability of Russian grain in foreign markets,” the analyst concluded.

Vladimir Petrichenko, Director of ProZerno, presented a detailed analysis of the current situation in the Russian grain market, outlining a number of concerning trends. “With the total grain production standing at 138.8 million tonnes in 2025, the crop area decreased by more than 5% in the 2025–2026 season. Domestic grain consumption remains stagnant at 85.4 million tonnes,” the expert highlighted. “Under this scenario, the export potential could reach approximately 55 million tonnes, but the main threat is about carryover stocks, which will reach 18–20 million tonnes. These additional millions of tonnes create the risk of a significant price depression for all grains, exerting pressure on the market and reducing profitability for producers.”

Analysing the dynamics of Russian grain exports, Vladimir Petrichenko noted a considerable delay of 13% compared to the previous season’s schedule. “We are currently significantly lagging behind in terms of deliveries to key buyers, and many of them have already met their needs by purchasing grain from other countries. And they have plenty of choice: the global balance shows a high level of overproduction.”

Summing up the discussion, the participants unanimously acknowledged that the Russian agricultural sector has entered a stage of restructuring due to the combination of macroeconomic and regulatory challenges. Current harvest forecasts dictate the need to concentrate export efforts on the most reliable and solvent destinations, where stable logistics links have been established and there is predictable demand. It was emphasized that the accumulated stocks of grain and processed products not only completely meet the needs of the domestic market but also make it possible to fully fulfil export obligations. The industry’s future development trajectory will depend on the effectiveness of the government and business interaction in the areas of lending, logistics, and sales. However, it is quite clear that the fundamental foundations of the food security of Russia are ensured for the long term.

BACKGROUND

The Winter Grain Conference is one of the largest annual agricultural fora in Siberia that plays an important role in the development of the region’s grain industry. This professional discussion platform was created to formulate adaptive development strategies and facilitate effective management decision-making by key enterprises of the Russian grain industry. The forum brings together leading experts, representatives of federal and regional government bodies, and heads of agricultural holdings and industry associations, allowing it to remain an established competence centre for the matters of grain production, processing, and marketing.

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