Ukrainian bread prices may surge 25% in the coming months, but according to industry officials, the driver isn’t a wheat shortage—it’s Russia’s systematic attacks on energy infrastructure, pushing electricity, logistics, and production costs through the roof.

Russia’s energy warfare strategy has proven more effective at inflating food costs than destroying Ukraine’s agricultural capacity, revealing a sophisticated shift in economic warfare tactics.

Despite an 11% grain harvest drop this summer, Ukraine still produces three times more wheat than it consumes domestically, with 21.8 million tons harvested versus just 6-7 million needed for internal consumption, Denis Marchuk, deputy head of the Ukrainian Agri Council, told Ukrainian media.

When power costs more than wheat

The price disconnect reveals how Moscow’s strategy has evolved from targeting farms to incapacitating the entire food production chain through energy infrastructure strikes.

Russia’s escalating attacks reached new intensity just two nights ago when Moscow launched over 800 drones at Ukraine simultaneously, killing civilians in Kyiv.

This represents a massive escalation from February 2022, when the Energy Minister Herman Halushchenko reported Russia had conducted 30 mass strikes on energy infrastructure—attacks that now occur with unprecedented frequency and scale.

Industry pushes back on price projections

While the strategic shift is clear, the economic impact varies across Ukraine’s food industry. However, Marchuk’s 25% price hike projection should be taken with a grain of salt.

For now, it seems to represent the upper range of actual impacts, as industry representatives often emphasize worst-case scenarios when discussing regulatory or economic pressures.

Ukraine’s National Bank raised interest rates to 14.5% in January to combat overall inflation, which reached 15.9% in May before moderating to 14.1% in July 2025.

Industry projections vary on the exact scale of increases, with some estimates more conservative than Marchuk’s 25% figure.

At the end of August, Yuriy Duchenko, director of KyivKhlib bakery, told AgroReview that bread prices may rise 15-20% by the end of 2025, citing increased costs for flour, energy resources, and wages as key drivers.

The KyivKhlib director noted that most bakery enterprises currently operate at the edge of profitability, with some forced to work at a loss—creating additional pressure on the industry and increasing the likelihood of further price increases.

Bread costs have already surged significantly, with prices rising 20% in 2024, according to Duchenko.

Current retail prices reflect this inflation: rye bread averaging 45.83 hryvnias ($1.11) for a 300-gram loaf in major Ukrainian supermarkets as of August 2025, while standard loaves (450 grams) now cost an average of 36.7 hryvnias ($0.89)—nearly 9 hryvnias ($0.22) higher than the previous year.

Agriculture survives, industry struggles

These price pressures highlight a crucial asymmetry in Russia’s economic warfare: while Ukraine’s agricultural sector has proven remarkably resilient, energy-dependent industries remain highly vulnerable to systematic infrastructure attacks.

The country has lost 70% of its power generation capacity to Russian strikes, yet grain production remains sufficient for domestic needs.

This summer’s drought and damaged irrigation systems in southern oblasts reduced harvests, but northern and western regions compensated with strong yields—Lviv Oblast achieved 6.64 tons per hectare, well above national averages.

When electricity becomes more expensive and unreliable, bakeries face higher operational costs, logistics companies pay more for fuel, and the entire food production chain becomes costlier—even when the grain remains affordable and abundant.

This is strategically more sophisticated than directly bombing food facilities.

By targeting the energy backbone, Russia can inflate costs across multiple sectors simultaneously while maintaining plausible deniability about “targeting civilian infrastructure.”

Western sanctions against Russia are working and are already hitting the aggressor’s economy hard, according to Ukraine’s Foreign Intelligence Service, which cited declines in key sectors. At the same time, the Kremlin is trying to offset its losses by looting temporarily occupied Ukrainian lands.

Sanctions squeeze the Russian economy

Business activity in Russia continues to fall. The manufacturing PMI, calculated by S&P Global, dropped to 48.7 in August out of 100 points, marking the third consecutive month in contraction territory.

Sunflower oil production in Russia also fell by 11% year-on-year. The coal sector is even worse off: 23 enterprises have halted operations due to the crisis, while 129 mines and open-pit sites, responsible for up to 85% of the country’s coal output, are seeking government support.

Coal and grain from occupied territories

Despite the crisis, Russia is trying to keep its economy afloat by plundering Ukrainian lands. New images from temporarily occupied Mariupol have shown how Russian forces are loading ships with stolen grain and coal. 

“Mariupol port. Two ships are being loaded at the same time… We expect the coal ship to head to the port of Temryuk for export clearance to Algeria, and the bulk carrier with grain to go to Egypt. Looting has predictably resumed,” reported Petro Andriushchenko, head of the Center for the Study of Occupation.

Stolen grain becomes the Kremlin’s business

According to the Center for National Resistance, Russia has turned stolen Ukrainian grain into a global business. Wheat that Moscow claims as “Russian” is purchased by 70 countries, including Egypt, Türkiye, and Iran.