Russian and Ukrainian wheat exports are set to fall by more than half to about 8.0mn tonnes in July to September, the first quarter of the 2026/27 season, from 16.2mn tonnes a year earlier, SovEcon, a consultancy covering the Black Sea grain market, estimated on 16 September.

That would be the smallest first quarter since 2010/11, a shortfall equal to nearly half a typical month of global wheat trade.

Russia's shipments are seen at 5.4mn tonnes, down 53 per cent, and Ukraine's at 2.6mn, against 4.7mn. The analytics centre of Rusagrotrans puts Russia's figure higher, at about 6.6mn tonnes.

Russia halted transit through the Kerch Strait, the only exit from the Sea of Azov, on 10 July after Ukraine attacked 13 Russian vessels there. Strikes on 12 August stopped two of the three grain terminals at Novorossiysk and the third halted the next day.

By 26 August more than 95 per cent of Russia's combined Black Sea and Azov grain export capacity was shut, SovEcon said. Those ports carry more than 70 per cent of Russia's grain exports, Vedomosti reported.

Across the Black Sea, ship calls at the Greater Odesa ports stopped after 22 July, and Ukraine's government said on 13 September that cargo handling there had fallen more than 15-fold.

PRICES DIVERGE

The supply squeeze has sent global prices rising. US hard red winter wheat for export from the Gulf of Mexico rose to $336.80 a tonne free on board (FOB), loaded at port, on 28 August from $279.40 on 3 July, its highest since July 2023, according to FAO price data accessed via Cropli.

Chicago wheat futures touched 790.25 cents a bushel the same day, the highest since February 2023, CNBC reported.

Meanwhile, Russian deep-sea FOB offers fell to $212 a tonne on 21 August from $229 on 3 July, the same FAO series show, and Ukrainian milling wheat slipped to $222 from $231. The gap between US and Russian wheat widened to $119 a tonne from about $50 in early July.

"However, we consider these prices largely notional, as it is unclear whether anyone is willing to buy on an FOB basis given the lack of available vessels," Andrey Sizov, head of SovEcon, told Reuters on 24 August.

Russia now effectively has two export prices. Wheat with 12.5 per cent protein loading at the Baltic ports of Vysotsk and Ust-Luga was quoted at $268 a tonne FOB for November delivery in the week to 18 September, consultancy IKAR said, while its nominal Novorossiysk price stood at $210 in late August.

Rerouting grain from the south to the Baltic adds $30 to $50 a tonne, according to the Russian Grain Union. Russia's Baltic ports can handle up to about 7mn tonnes a year, Fastmarkets reported, well short of what normally leaves through the south, and Latvia and Lithuania are weighing curbs on Russian grain transit.

"We have a record spread between Romanian wheat and ours. In other words, we are not fully integrated into the global market," Dmitry Rylko, head of IKAR, said in August.

GRAIN STORES BUILD IN RUSSIA

The Black Sea bottleneck has left harvests piling up in storage.

Russian fourth-grade wheat fell 36 per cent between June and 26 August to 8,575 roubles, or about $103, a tonne, the lowest for the time of year in at least five years, SovEcon said. In Ukraine, processors' bids for third-class wheat fell 30 per cent on the year to 7,100 hryvnias (about $159) a tonne on 28 August, FAO data show.

"Unless Black Sea and Azov logistics improve, grain will continue to accumulate inside Russia, keeping domestic prices under pressure while reduced Russian availability supports global wheat prices," SovEcon wrote on 26 August.

Importers are paying the difference. Asian buyers paid $315 to $330 a tonne including cost and freight for Australian Premium White wheat and $310 to $315 for Argentine wheat in early September, against $260 to $280 for Black Sea cargoes booked for August and September arrival, traders told Reuters.

Algeria paid $319 to $321 a tonne including cost and freight for 510,000 tonnes on 15 September, $30 more than at its tender on 5 August, Interfax reported, citing Rusagrotrans. Freight for Ukrainian wheat to Egypt rose to $100 to $105 a tonne from about $60 in two weeks, analysts at PUSK, a cooperative within the All-Ukrainian Agrarian Council, said on 21 September.

Russia and Ukraine supplied 7.44mn of the 8.8mn tonnes of wheat Egypt imported between July 2025 and January 2026, according to the US Department of Agriculture.

Russian shipments to Egypt in the first ten days of September totalled 7,400 tonnes, against 402,000 tonnes a year earlier, the Russian Grain Union said. Egypt is diversifying towards France and other European suppliers, and its reserves cover more than six months of strategic consumption, Supply Minister Sherif Farouk was quoted as saying on 20 September.

OTHER FACTORS AT PLAY

The Black Sea is not the only driver. Heatwaves and drought cut the European Union's wheat crop to a forecast 133.8mn tonnes from 145.3mn last season, the USDA's office in Madrid estimated in July. In September the USDA raised its forecast of world wheat stocks at the end of 2026/27 by 3mn tonnes to 276.3mn.

Prices have also eased this month on hopes of a deal on safe shipping. Chicago wheat fell about 2 per cent in the week to 18 September, the week Türkiye shared a draft memorandum with both sides.

President Volodymyr Zelenskiy said on 23 September that Egypt, India and Türkiye had submitted written proposals and that Ukraine was ready to act on them if Russia took steps to de-escalate.

"The market continues to ignore the Black Sea supply shock, but this cannot last indefinitely," Sizov said on 21 September.

Moscow has scrapped its floating export duty on wheat, barley and corn until 31 December to support producers and exporters while export logistics are rebuilt, Vedomosti reported on 22 September.

Russian farmers had sown winter crops on 6.1mn hectares by 18 September against 7.1mn a year earlier, the slowest pace since 2013, with wheat prices 20 to 30 per cent below break-even, Sizov told Reuters. In Ukraine, Agrarian Policy Minister Taras Vysotskyi expects the winter wheat area to shrink by 10 to 15 per cent, the ministry said on 10 September.