Within reporting week domestic grains market situation remained actually same as within previous week. As earlier, grains trade was very slack, almost zero low — as most market operators didn’t know what «game rules» will Government finally set.
Due to current quotas distribution procedure, reception of applications for grains export quotas obtaining terminates on Nov 03/10. However, no applications had been submitted until that date: one of Ministry of Economics requirements for potential exporters was that they should have received from Ministry of Agrarian Policy certificates on their grains reserves volume and their being able to export it, — but Ministry of Agrarian Policy has officially approved certificates issuance procedure only on Oct 27/10 (that is, 1 week after applications submission beginning and 8 days before its ending). As a result, on Nov 03/10 no trader received necessary certificates from Ministry of Agrarian Policy and therefore couldn’t submit application to Ministry of Economics. It seems, Government has purposefully created these strict export conditions, otherwise it is hard to explain current situation: de jure, traders are free to get quotas, de facto — they aren’t allowed to do that.
While analyzing current market situation, some experts affirm Government officials now simply wait for Verkhovna Rada to adopt Law on selling of grains export quotas on tenders; experts admit Law is targeted mainly at State budget filling at economy entities expense.
So far, details of quotas tenders sales are unknown. However, it is already now possible to conclude that quotas tenders sales will negatively affect Ukrainian agricultural branch: even if traders agree to pay US$20–30 per MT to be allowed to export grains, they will inevitably take these expenses into account later, when forming their domestic grains purchase prices (as no trader is eager to work at loss). As a result, agricultural producers will suffer losses as they won’t receive those financial means which traders will indirectly pay to State budget.
In meanwhile, experts say domestic grains market will remain inert until Government adopts some certain decisions on grains export. So, no market significant changes are expected to occur in near future.
EXPORT
Barley
As earlier, within reporting week not numerous free feed barley owners were getting more active in making sale offers/price discounts. As of this week, feed barley purchase prices ranged within UAH1,600–1,680 per MT (EXW-ex-elevator, central/southern regions)/UAH1,550–1,650 per MT (EXW-ex-elevator, other regions). However, as earlier, traders didn’t make any feed barley purchases due to grains quoting regime recent introduction.
As of this week, feed barley US$ purchase prices were US$250–260 per MT (FOB Black Sea big ports: Pivdenniy, Illichivsk, Odesa).
Within reporting week traders didn’t make any feed wheat purchases. As of this week, feed wheat offer prices remained UAH1,500–1,600 per MT (EXW-ex-elevator), unchanged against previous week.
As of this week, feed wheat FOB basis export prices ranged within US$235–250 per MT.
There was no food wheat trade within reporting week. As of this week, 3 and 2 classes food wheat declarative export prices (if global market prices conjuncture is taken into account) were correspondingly US$265–280 per MT (FOB Black Sea ports) and US$280–305 per MT (FOB Black Sea ports).
Maize
As of this week, there were just few exporters which declared UAH1,520–1,650 per MT (EXW-ex-elevator, depending on regions/contract conditions) feed maize purchase prices.
As of this week, feed maize UAH purchase prices were UAH1,700–1,750 per MT (CPT port); feed maize export prices ranged within US$245–260 per MT (FOB Black Sea ports).
Grain export prices, USD/ò
Grain type
03.11.10
27.10.10
Octember
2010 average
September
2010 average
August
2010 average
Min
Max
Min
Max
FOB, Ukrainian Black Sea port
2nd class wheat*
290
315
280
305
294
287
256
3rd class wheat**
275
290
265
280
274
267
241
Feed wheat
240
255
235
250
242
230
222
Feed barley
250
260
250
260
254
240
234
Feed corn
250
260
245
260
251
234
202
Feed peas
270
290
265
290
276
269
256
Wheat bran
180
195
180
195
187
150
120
Oats
180
195
175
190
181
162
144
DAF
Feed corn
235
245
230
240
234
218
191
Rye
175
185
175
185
179
168
156
*- protein content: minimum 12.5%
**- protein content: minimum 11.0%
Processors Activity
Within reporting week domestic flour millers activity didn’t undergo any significant change. Even despite processors and Agrarian Fund having become the only ones interested in high-quality wheat purchases, grain holders decided to withhold their high-quality wheat reserves until spring and therefore abstained from sales. So, within this week grain holders were selling only 2 and 3 classes wheat in small lots as much as they needed circulating assets replenishing.
It is to be admitted, agrarians recent declarations about their having suffered losses due to grains export limitation aren’t completely correct. «Losses» mean selling at price below production cost price; now, however, agrarians have potential possibility to sell their grains reserves in next year spring at price up against current. Moreover, even now processors are ready to purchase wheat from agrarians at prices which assure 50% profitability for agrarians, — so, it goes not about agrarians losses, but rather about negative consequences for all country economy caused by grains export limitation recent introduction.
Average purchase prices for food grains (ÑÐÒ processing plant), UAH/ò
Region
03.11.10
27.10.10
Octember
2010 average
September
2010 average
August
2010 average
Min
Max
Min
Max
2nd class wheat*
Western
1580
1730
1580
1720
1635
1510
1440
Northern
1600
1800
1600
1730
1660
1555
1500
Central
1600
1750
1600
1750
1665
1540
1520
Southern
1630
1750
1630
1730
1675
1570
1600
Eastern
1630
1800
1630
1800
1715
1605
1550
3rd class wheat**
Western
1520
1650
1520
1650
1575
1450
1385
Northern
1520
1650
1520
1650
1585
1460
1410
Central
1550
1650
1550
1650
1600
1480
1470
Southern
1550
1650
1550
1650
1600
1505
1540
Eastern
1550
1700
1550
1700
1625
1530
1470
*- protein content: minimum 12.5%
**- protein content: minimum 11.0%
