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Rice Glut in Krasnodar: Falling Prices, Export Challenges, and the Future of Russia’s Rice Industry

by Tatiana Ivanova
16 June 2025
in Market News, News
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Rice Glut in Krasnodar: Falling Prices, Export Challenges, and the Future of Russia’s Rice Industry
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As of early June, Krasnodar Krai—Russia’s key rice-producing region—holds 300,000 tons of unsold rice and rice groats, according to Igor Lobach, Chairman of the National Rice Union. This surplus is expected to grow further by the new harvest season, pushing prices down to 22-26 RUB/kg ($0.25-$0.30/kg) for paddy rice, a sharp drop from the 32-36 RUB/kg ($0.37-$0.42/kg) seen over the past 18 months.

Lobach describes the market as “frozen,” with sales nearly halted. The situation stems from export restrictions imposed in 2022 after the Fedorov Hydro Complex accident, which reduced planting areas and yields. Despite a record 2023 harvest of 1.2 million tons, domestic processing capacity (1.5 million tons) remains underutilized, complicating efforts to clear stockpiles.

Export Challenges and Policy Responses

Before the restrictions, Krasnodar exported 180,000–250,000 tons of rice annually, but shipments in early 2024 totaled just 23,500 tons. The Russian government aims to boost production to 2 million tons by 2030, but current market conditions discourage expansion.

To alleviate the crisis, the Ministry of Agriculture plans to introduce a 50,000-ton export quota for rice groats by mid-2024. However, Vice Prime Minister Dmitry Patrushev has ruled out lifting restrictions on paddy rice exports, citing insufficient domestic processing capacity.

Global Context and Future Outlook

Globally, rice prices remain volatile due to climate disruptions in Asia and trade restrictions in India, the world’s top exporter. If Russia reopens exports strategically, it could capitalize on rising demand in Africa and the Middle East, where imports are projected to grow by 4% annually (FAO, 2024).

Krasnodar’s rice surplus highlights the need for balanced stock management and smarter trade policies. While short-term quotas may help, long-term solutions—such as expanding export markets, improving processing efficiency, and stabilizing domestic prices—are crucial for sustaining profitability. Farmers and policymakers must collaborate to avoid future gluts and ensure the sector’s growth aligns with global opportunities.

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Tags: Agribusinessagricultural exportsagricultural policyCrop Managementfarm economicsKrasnodar AgricultureRice MarketRice Production

Tatiana Ivanova

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