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- Bread slicer: the government has set a quota for grain exports in the first half of 2026
Bread slicer: the government has set a quota for grain exports in the first half of 2026
The Russian government has fixed the maximum volumes of grain supplies abroad for the period from January to June 2026. The total allowable volume of exports of wheat, meslin, corn and barley is set at 20 million tons. Izvestia investigated what goals can be achieved through quotas, what alternative export control measures can be used, and how setting quotas can affect domestic grain prices.
Market stability
The Ministry of Agriculture is counting on the maximum utilization of quotas, which will allow for the further development of exports and ensure comfortable selling prices for agricultural producers, the ministry's press service told Izvestia.
The use of quotas makes it possible to maintain sufficient volumes of grain within the country, which reduces the risks of shortages and smooths out price fluctuations in the domestic market, Kirill Lysenko, analyst for sovereign and regional ratings at Expert RA, told Izvestia. This helps to stabilize the cost of the grain itself, as well as products, in the cost of which grains and their processed products play a significant role.
In addition to quotas, other instruments are used in the world to regulate exports. Customs duties and direct administrative export restrictions are among the most common. Additionally, the government can encourage grain redirection to the domestic market through support for processing industries, including subsidies. This approach is widely used in the countries of the European Union.
— For producers, this is, of course, a decrease in export opportunities, a reduction in the speed of grain sales and a loss of revenue. However, when drawing up quotas, the government seeks to minimize negative effects, focusing on the actual demand in the country, and not overdo it with locking up grain," the expert explained.
The decision of the Russian authorities to impose a limit on grain exports pursues a set of tasks related to balancing the needs of the domestic market and foreign trade, Sergei Mitrofanov, head of the Department of Economics of Innovation in Agriculture at the Institute of Agrarian Research of the National Research University Higher School of Economics, told Izvestia. First of all, we are talking about maintaining price stability within the country.
By restraining supplies abroad on the eve of the start of a new agricultural cycle, the state, according to him, actually guarantees the availability of raw materials for animal husbandry and processing industries. This reduces the pressure on the cost of bakery products and feed, thereby limiting inflationary risks. Such a measure is protective in relation to the domestic consumer, while at the same time narrowing the opportunities for participants in the export market.
— At the same time, the quota serves as a mechanism for more predictable management of export revenue and logistics. In combination with the floating duty system, which is preferential within the limit and significantly higher beyond it, the policy allows the budget to withdraw excess revenues arising from favorable global price conditions," he explained.
For grain producers, the restrictions imposed have both advantages and disadvantages, Sergei Mitrofanov noted. The export limit reduces the possibility of selling all products at the most favorable global prices, which can negatively affect financial results. However, such measures create more stable and predictable conditions within the country, reducing dependence on sharp price spikes and encouraging investments in grain processing with high added value in the domestic market.
Instead of strict quotas, other regulatory tools could be used, for example, expanding the scale of government procurement interventions to create strategic reserves or finalizing the floating export duty mechanism and transferring a key role to it, the expert believes. Nevertheless, the chosen model gives the authorities the opportunity to quickly adapt to foreign policy and economic risks, giving priority to food sustainability and social stability, even if this limits short-term growth in export earnings.
Annual monitoring
Export restrictions on grain are introduced on a regular basis in the second part of the agricultural season, Denis Ternovsky, a leading researcher at the Center for Agri-food Policy at the Institute of Applied Economic Research of the Presidential Academy, told Izvestia. The specific parameters of the limit change every year and are calculated taking into account the volume of rolling stocks and the needs of the domestic market.
If set up correctly, such a mechanism should not restrain the natural, economically reasonable level of supplies abroad, he explained. Its task is to act as a kind of safety net protecting the domestic consumer from shocks caused by the instability of the external environment. In a situation where the quota corresponds to the real balance of supply and demand, its effect on price dynamics within the country is neutral.
"Certain problems may arise at the stage of redistributing its volumes between exporters, when the export potential of a particular supplier does not match the quota received, but, as practice has shown in recent years, they are being successfully solved," he said. — The quota tool is optimal for solving such a problem, there are no adequate alternatives to it.
The measure, which has been in effect since 2021, looks understandable and largely forced in the current conditions, Sergei Grishunin, managing director of the NRA rating service, told Izvestia. With an expected harvest of about 135 million tons and potential exports of up to 50 million tons, quotas are a logical preventive tool. In the short term, this helps to keep flour and bread prices at a stable level and increases predictability for large market participants with their own infrastructure.
— However, with high yields, export restrictions pose a threat to the domestic price overhang. Oversupply puts pressure on the market, especially if global demand and logistics do not allow us to quickly redistribute volumes," he explained. — Against the background of tight monetary policy, rising costs and declining profitability of grain, this is already affecting the credit quality of agricultural producers and investment activity.
Although the current mechanism is more flexible than rigid alternatives such as embargoes or total bans, its effectiveness critically depends on fine-tuning, the expert believes. It is important for the authorities to take into account not only the formal balance of production and consumption, but also macroeconomic conditions, logistical constraints and business expectations, since it depends on this whether pressure on the domestic market increases or the quota remains a neutral instrument.
The government uses a set of tools to keep prices and supply at an acceptable level, associate professor at the Faculty of Economics of RUDN University Khadzhimurad Belkharoev told Izvestia. In addition to export restrictions, intervention funds and fiscal measures are involved, reducing the attractiveness of mass exports.
At the same time, quotas practically do not affect farmers themselves, since large traders are engaged in exports, and production and logistics are different segments of the industry, he explained. With rising costs, the expected rise in bread prices in 2026 will remain moderate and controlled. In general, quotas are an element of a systemic policy aimed at food security and protecting the socio-economic sustainability of the country.
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