Russia’s expanding Baltic shipments are cushioning the loss of Black Sea exports, but SovEcon has cut its 2026/27 wheat export forecast to 36 million tonnes. In an exclusive interview with Miller Magazine, Managing Director Andrey Sizov says alternative routes are performing better than expected, while warning that wheat prices reflect excessive optimism about a return to normal trade.

Russia’s grain exporters are adapting faster than expected to disrupted Black Sea shipping, expanding Baltic shipments and finding alternative ways to handle cargoes. But the adjustment has only partly offset the shortfall, and wheat markets remain too optimistic about a recovery in trade, SovEcon Managing Director Andrey Sizov told Miller Magazine.

Speaking in an exclusive interview on 2 November, Sizov said SovEcon had lowered its forecast for Russian wheat exports in the 2026/27 season to 36 million tonnes from 36.7 million, reflecting a later assumed recovery in Black Sea navigation. “The main reason for the reduction is our assumption that there will be no Black Sea ceasefire until at least spring 2027,” he said. “Previously, we had assumed a ceasefire in early 2027.”

The relatively modest reduction reflects the speed at which exporters have adjusted. Russia’s export infrastructure and trading system are adapting to constrained Black Sea navigation “faster than many expected”, Sizov said.

Sizov, a widely quoted specialist in Black Sea grain markets, sees that operational resilience alongside a more cautious price outlook. Alternative routes are moving increasing volumes, but he believes the market has placed too much confidence in a resumption of Black Sea flows. “At present, we think the sell-off in futures and FOB prices has gone too far,” he said. “We believe there is a high probability of substantially higher prices later in the season.” He cautioned, however, that a clear trigger for such a recovery had yet to emerge.

SovEcon Managing Director Andrey Sizov

BALTIC SHIPMENTS PROVIDE THE MAIN RELIEF

Russia’s northwestern export route has become the main source of additional capacity, encompassing Russian Baltic terminals and transit through neighbouring Baltic states, principally Latvia, with some shipments through Lithuania. Before the escalation that began in July, the route’s monthly maximum was around 300,000 tonnes, according to Sizov. Shipments have since risen to about 1 million tonnes a month and may have reached around 1.4 million in October. “That represents roughly an additional million tonnes moving through this route,” he said.

The expansion has lifted his assessment of Russia’s ability to move grain under the prevailing constraints. A few months earlier, the country appeared capable of exporting around 2 million tonnes of grain a month in total. That figure is now about 3 million tonnes. “This is still well below more peaceful periods, when Russia could ship more than 6 million tonnes, and in some months even 7 million,” Sizov said. “Nevertheless, an increase from 2 million to 3 million tonnes is substantial.” Separately, he estimated Russia’s October wheat exports at around 2.9–3 million tonnes, noting that a final figure was not yet available.

Terminals commissioned over previous years have helped accommodate the shift. Exporters are also adopting handling methods that reduce their dependence on conventional grain storage and loading facilities. In Ust-Luga, containers are being used for temporary storage to accumulate enough grain for a shipment before being tipped to discharge cargo into vessels’ holds. “We saw similar approaches in Odesa before the current events, when damage to terminals prompted some operators to use this method,” Sizov said. “Russian operators are now doing the same at Baltic ports.”

Includes Russian Baltic terminals and transit through Baltic states.

RAIL CAPACITY LIMITS FURTHER EXPANSION

Despite the increase, Sizov questioned how much more the Baltic route could handle. “The Baltic route can handle around 1 million tonnes a month, potentially 1.5 million. I am not sure it can handle much more,” he said. The constraints extend inland. Railway congestion and the availability of railcars are major issues, while shipments through Latvia and Lithuania also face political uncertainty. “Grain is still flowing for now, but additional restrictions are possible,” he said.

The northwestern route accounts for around 40–50% of Russia’s current exports, according to his assessment. Other outlets include the established Caspian route, rail shipments to destinations such as Azerbaijan, and limited departures from Black Sea ports.

By comparison, Sizov sees little immediate significance in the much-discussed Arctic port of Murmansk. The shipment under discussion there was initially expected to involve 44,000 tonnes, subsequently reduced to 30,000 tonnes. At the time of the interview, only around 3,000–4,000 tonnes of wheat had arrived and were being loaded, he said. “We are therefore talking about a potential shipment of 30,000 tonnes after several months,” Sizov said. “An Arctic port sounds interesting and attracts media coverage, but compared with the additional volumes moving through Baltic ports, that is negligible.”

AZOV VESSEL MOVEMENTS FALL SHORT OF A RESTART

Reports of vessels leaving the Sea of Azov should also be treated cautiously, Sizov said. A handful of departures does not amount to a restoration of regular grain exports. A few vessels had left from Temryuk and probably Yeysk, while other movements involved vessels heading north into the Don River for winter lay-up and repairs. At the time of the interview, Sizov had not received confirmation of departures from the larger ports of Rostov and Azov, although vessels there had been asked whether they were ready to leave. Practical obstacles included the need to assemble crews for ships that had been idle for extended periods and wind-driven falls in water levels in the shallow Sea of Azov. Some owners were considering departing without loading grain simply to get their vessels out. “Our main scenario is therefore that a few vessels may leave, potentially followed by several more,” he said. “That is very far from a resumption of regular exports.”

HIGHER FREIGHT IS REFLECTED IN LOWER FOB PRICES

For millers and other wheat buyers in North Africa, the longer Baltic voyage does not necessarily translate into a proportionately higher delivered price. Sizov estimated freight from northwestern ports at roughly $50 per tonne, compared with around $20 from Black Sea suppliers such as Romania and Bulgaria.

Russian wheat shipped through northwestern ports could be offered at around $300–310 per tonne on a cost-and-freight basis, with an FOB price of roughly $260. Romanian or Bulgarian wheat, by comparison, might be around $290 per tonne FOB, plus $20 in freight. “The freight difference is roughly $50 versus $20 per tonne, but the delivered prices are broadly similar,” he said. “The higher freight cost is reflected in a lower FOB price.”

That comparison illustrates how the adjustment is being transmitted through the market. Russian wheat must compensate for its more expensive route with a lower price at the export point to compete at destinations such as Alexandria. “We still appear to be in a buyer’s market,” Sizov said. “The main reference point is the delivered price.”

SECURITY REMAINS THE KEY TO A RECOVERY

Russian exports remain roughly 50% below normal despite the growth in alternative shipments, Sizov said. Whether that becomes a more acute problem for importers depends partly on the market’s price response. “It would become a much more substantial problem for major importers if we saw a rally in FOB prices and futures,” he said. “If prices return to their September highs, or move above them, the situation would become more problematic.”

Sizov assigns a low probability to a Black Sea ceasefire in the coming months, saying the Kremlin’s statements had not indicated a willingness to change its position. Operationally, however, he believes shipments could restart much more quickly if security conditions improve and shipowners agree to return. “Russia and Ukraine could restart shipments quite promptly, within days or weeks, if there were a ceasefire and shipowners were willing to send vessels into the region,” he said. In his assessment, damage across the port system as a whole would not prevent such a restart. He cited an exception at a grain terminal in Novorossiysk, where a loading conveyor gallery had collapsed, but said operations could potentially be restored at a slower loading rate before full repairs were completed.

A reopening would draw grain back towards southern ports, although Sizov expects Baltic terminals to retain some business. “I do not think those investments would be lost,” he said. “Grain flows would mainly switch back to southern ports, but the northern terminals would continue to handle some volumes, although at lower levels than today.”

WHEAT SELL-OFF LOOKS OVERDONE BUT A CATALYST IS MISSING

Sizov acknowledged that SovEcon had correctly anticipated an earlier price spike but had not anticipated the subsequent substantial decline. He now considers the sell-off excessive, while distinguishing that assessment from a prediction of an immediate reversal. “However, I have to admit that we do not currently see a clear catalyst that would reverse the market,” he said.

Political developments in November, including the US midterm elections and potential escalation in the Middle East, could influence crude oil and, through it, grain markets, he said. He also pointed to a divergence between rising crude prices and falling grain prices, which he does not expect to persist indefinitely. Nevertheless, the price charts had yet to show a reversal. “For now, though, we do not see signs of a reversal on the charts,” Sizov said. “Futures would need to start moving higher before the market becomes more concerned.” “The sell-off looks overdone to us. Prices could move sideways for a while, and we could see another move higher in November.”