Russia may have better harvest than in 2024, the central bank says

Food prices are a key component of inflation, which is currently running above 10%. Some analysts anticipate that the regulator may begin cutting the key interest rate, currently at its highest level in over 20 years, once preliminary data on crops becomes available.

“Despite the poor condition of about a third of the winter crops, favourable weather could lead to an increase in the harvest compared to last year,” the regulator said.

Russian grain crops were badly hit by extreme weather conditions, ranging from early spring frosts to drought, in 2024. The central bank said that food inflation remained high, at an annual rate of 12.4% in March, due to last year’s poor harvest.

“As the new harvest enters the market, inflationary pressure will weaken,” the regulator said.

Deputy Prime Minister Dmitry Patrushev, who oversees the agricultural sector, said on April 11 that more than 93% of winter grain crops in Russia are in normal condition.

Concerns were raised about the state of winter crops in Russia, the world’s largest wheat exporter, following reports late last year that at least 37% of winter crops were in poor condition.

The IKAR consultancy forecasts the 2025 grain harvest to reach 129.5 million metric tons, exceeding the 126 million tons gathered last year. IKAR projects the wheat harvest to be 82.5 million tons under a baseline scenario.

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