Russia’s dominance as the world’s top wheat exporter is under threat, with shrinking acreage and declining production fueled by export taxes. In an exclusive interview with Miller Magazine, Andrey Sizov of SovEcon cautions: “It’s just a matter of time before Russia loses its #1 spot.” From bullish wheat markets to China’s self-sufficiency push, Sizov shares key insights on the forces reshaping global grain trade in 2025.

Andrey Sizov

The Black Sea region continues to hold its status as a key player in global grain markets. Russia, the world’s leading wheat exporter, and Ukraine, a major supplier, face unique challenges and opportunities. To understand the complexities of these markets, Miller Magazine interviewed Andrey Sizov, Managing Director of SovEcon, one of the foremost authorities on Black Sea agricultural markets.

Russian farmers are gradually moving away from wheat to focus on more profitable crops. Sizov links this trend primarily to export taxes, introduced in 2021, which have reduced farmers’ revenues by 10-40%. “We predicted that farmers would start to switch to other crops from wheat in 2021 after the government introduced export taxes. This is the key reason why they are ditching wheat. Weather issues are mostly irrelevant as agriculture always faces that risk,” Sizov states.

As a result, Russia’s wheat acreage has begun to decline after peaking at 29.8 million hectares in 2023, dropping to 28.5 million hectares in 2024, with a forecast of 28.2 million hectares in 2025. According to Sizov, if these taxes persist, “Russian wheat production and exports will continue to decline. It’s just a matter of time before the country loses its #1 global exporter spot. It could happen next season already, or a season later.”

SOVECON LOWERS RUSSIAN WHEAT EXPORT OUTLOOK

The Russian government’s decision to reduce the 2025 wheat export quota by two-thirds has raised concerns about the competitiveness of Russian wheat in global markets. However, Sizov clarifies that this quota aligns with SovEcon’s expectations, reflecting a tighter supply and demand (S&D) balance. He notes, “In December, we lowered our export forecast to 43.7 MMT, down from 44.1 MMT in November. Interestingly, the USDA still has an optimistic Russian export estimate of 47.0 MMT. We think they will have to cut it, probably offsetting that by higher Argentinian and US wheat exports. This could support global wheat prices.”

‘WE ARE BULLISH ON WHEAT PRICES’

Despite bearish factors such as high U.S. wheat stocks, strong Southern Hemisphere crops, and a robust U.S. dollar, Sizov remains optimistic about wheat prices. “We are bullish on wheat. Global S&D is tight, the stocks/use indicator is the lowest for 10+ years, and Russian export potential could be overestimated by the market. Another factor is the poor 2025 Russian crop outlook,” he said. However, Sizov also pointed to weak demand from key wheat importers as a counterbalance to these bullish trends. “Egypt still looks well-covered thanks to earlier active private imports. Turkey just marginally eased its import wheat barriers and remains a slow buyer,” he added.

THREE KEY FACTORS SHAPING 2025 GLOBAL GRAIN MARKETS

Sizov identifies three major factors shaping the 2025 global grain markets, providing a detailed analysis of each scenario:

President Trump’s actions after the inauguration. The US dollar index has rallied hard in recent months, putting a lot of pressure on wheat in anticipation of tariff hikes. However, after becoming president in 2017, Trump started his actual trade wars against China only in 2018, and the dollar weakened throughout 2017. If we see a similar scenario in 2025, this could support many commodities, especially wheat, whose negative correlation with the US dollar is strong.

Black Sea War. We believe that there is a high chance of negotiation between Russia, Ukraine, and the West. However, we are not too optimistic about the success. The lack of a truce or peace agreement between two major global grain exporters is likely to support the market, wheat first of all. However, it’s important to add that fundamentally the war itself currently has a limited impact on grain production and grain flows from both countries, so the outcome of negotiations is more important in terms of market perception.

Northern Hemisphere weather and new crop outlook. Current weather conditions in important regions like the US, EU, and Ukraine are close to normal or slightly better.

SovEcon forecasts a 2025 Russian wheat crop of 78.7 MMT, marking the smallest output since 2021 and significantly below the five-year average of 88.2 MMT. According to Sizov, this drop stems from abnormally dry weather in late 2024, which left 37% of winter wheat crops in poor condition—a sharp contrast to the five-year average of 7%. He adds, “Winter wheat accounts for around 70% of total Russian wheat production, making this poor condition assessment especially concerning.”

CHINA’S SELF-SUFFICIENCY SIGNALS BEARISH FUTURE FOR GRAIN EXPORTERS

Commenting on China’s long-term plan to boost its grain industry from 2025 to 2035, Sizov highlights the country’s increasing focus on self-sufficiency, supported by investments in agritech and crop infrastructure. He warns that this trend poses a bearish outlook for global exporters, including Russia, as China’s grain imports may have already peaked. “Chinese leaders have long emphasized self-sufficiency, in line with the proverb, ‘The Chinese people’s rice bowl must be firmly held in their hands at all times.’ Beijing is enhancing agrotechnology, rapidly developing new crop varieties, and upgrading grain infrastructure. In 2017, state-owned ChemChina acquired Syngenta, a global leader in crop protection and seeds. This drive toward self-sufficiency is likely to intensify, influenced by the current trend of de-globalization and China’s slowing population growth after decades of rapid expansion. It’s a long-term bearish factor for major suppliers such as the US, Australia, the EU, Ukraine, and Russia.”