Russian Farmers Shift Strategy Amidst Skyrocketing Interest Rates

Amid low global grain prices and high domestic interest rates in Russia, farmers are opting to sell grain immediately rather than stockpile it. With interest rates at 21%, farmers find it profitable to deposit earnings in banks. Wheat export activity has increased, causing a dip in domestic stocks.

In response to soaring interest rates in Russia, local farmers are abandoning their traditional method of hoarding excess grain for better market conditions. Instead, they're rapidly liquidating their stock, driven by the opportunity to earn significant interest through domestic banks.

The Russian central bank's recent rate hike to a hefty 21% is incentivizing this shift. Short-term bank deposits now yield up to 25% returns, making immediate sales more appealing than potential future price gains.

The intense pace of exports is mirrored in a 14% reduction in domestic wheat stocks, as Russia expedites shipments to the global market. Analysts note that the country's grain exports have already met nearly half of their projected annual volume despite a challenging harvest season.

(With inputs from agencies.)