Expansion of Russian Ports for Agricultural Exports

By Olga Popova and Gleb Stolyarov
MOSCOW (Reuters) – Russia, the leading wheat exporter globally, is expanding its Baltic Sea ports to boost agricultural exports by 50% by 2030. This move aims to reduce dependency on traditional Black Sea routes.

The country exported at least 72 million metric tons of grain in the 2023/24 season and is seeking new markets in Latin America and Africa, moving away from its traditional North African and Middle Eastern markets.

Due to the ongoing conflict with Ukraine, shipping in the Black Sea has become risky, prompting the need for expanded port capacity. Ksenia Bolomatova from OZK mentioned that last year’s record harvest revealed insufficient export loading capacity.

In the past 18 months, two major ports — Vysotsky and Lugaport — have been launched in the Gulf of Finland near St. Petersburg. Vysotsky shipped its first grain in April 2023, with Lugaport beginning operations in June 2023. The combined capacity is expected to reach 7 million tons by early 2025.

Dmitry Rylko from IKAR consultancy noted that both ports could handle up to 15 million tons of agricultural exports annually, accounting for a quarter of Russia's forecasted 60 million tons of grain exports in the 2024/25 season. Additionally, Primorsky UPK plans to establish a grain terminal at Primorsky port with a capacity of 5 million tons.

President Putin aims to make Russia an agricultural superpower along with Brazil, the U.S., and China by increasing agricultural exports. Although Russia has become the biggest exporter of wheat, corn, barley, and peas, shipping capacity remains a potential bottleneck.

Russian ports are enhancing capacity following record harvests in recent years, especially at the Baltic terminals. The expansion is viewed as critical for economic and transport security.

Trade flows in the Baltic Sea remain stable, with 96% of the coastline owned by NATO members, unlike the increasingly disrupted Black Sea, which could impact global grain supplies.

In the 2023/24 season, Russia exported 62 million tons of grain by sea, predominantly via the Black Sea, though this share is expected to decline as Baltic infrastructure develops. Baltic Sea ports loaded 1.5 million tons of grain last season, a three-fold rise but only 2.4% of overall Russian exports.

Darya Snitko from Gazprombank highlighted logistical advantages for grain exports from the Baltic Sea. The larger port capacity should help reduce costs, making Baltic shipments more competitive for markets in Africa and Asia outside the Mediterranean.

Vysotsky has started sending grain to nations including Algeria, Brazil, Cuba, Mali, Mexico, Morocco, Nigeria, and Tunisia.