As expected, within reporting week Ukrainian domestic grains market was, as earlier, dominated by prices negative trend. Food wheat was actively purchased by processors and several export-oriented companies (Khlib Investbud, Kernel and Valars) which had earlier received grains export licenses, but still haven’t accumulated enough grains reserves. Food wheat was purchased also by several traders which tried to form certain reserves on elevators in anticipation for grains export limitations to be cancelled since this year Apr.
This week has made no surprise for feed wheat market. As of this week, feed wheat was purchased mainly by processors (flour millers/mixed feeds plants) in small lots due to feed wheat offer deficit. Exporters didn’t purchase feed wheat as global market demand and purchase prices for Ukrainian food wheat had recently boosted. Moreover, exporters even couldn’t form food wheat necessary vessel lots due to low offer.
On feed maize market, there were also plenty raising factors, so feed maize prices were growing up proportionally to exporters demand/global market strengthening.
One more acute and “explosive” problem within this week was that several big exporters, — Alfred C. Toepfer, Cargill and Louis Dreyfus Ukraine, — which have already accumulated big enough grains reserves (and have submitted, alongside with other exporters, all necessary documents), haven’t received grains export quotas. At same time, Khlib Investbud (which has received about 40% total Ukrainian grains export quotas) now can’t purchase necessary grains lots on market.
Upon whole, within reporting week flour-quality wheat/feed maize prices growth was highest among all other grains; however, feed wheat/feed barley prices remained unchanged.
In meanwhile, experts say grains prices will continue growing up, though growth rates will significantly depend on Government further decisions on grains export quoting.
EXPORT
Barley
As earlier, within reporting week feed barley market trade activity remained low due to processors slack demand; it is to be admitted, no trader made feed barley purchases after export quoting regime introduction.
As of this week, feed barley market purchase prices ranged within UAH1,700–1,900 per MT (EXW-ex-elevator, depending on lots/regions).
Within reporting week feed barley US$ purchase prices were US$280–290 per MT (FOB Black Sea big ports: Pivdenniy, Illichivsk, Odesa).
Wheat
Within reporting week feed wheat was purchased by just few traders. As of this week, feed wheat market offer prices remained UAH1,600–1,800 per MT (EXW-ex-elevator, depending on regions), unchanged as of last week.
Within this week feed wheat FOB basis export prices ranged within US$290–300 per MT.
It is to be admitted, Ukrainian food wheat external markets demand remained high within this week. Consequently, 3 and 2 classes food wheat export prices (if global market prices conjuncture is taken into account) have risen correspondingly to US$350–380 per MT (FOB Black Sea ports) and US$345–355 per MT (FOB Black Sea ports, depending on protein content).
Maize
Within reporting week feed maize market purchase prices fluctuated depending on seller status (middleman or producer), shipments regions and contract conditions, — UAH1,650–1,900 per MT (EXW-ex-elevator). It is to be admitted, traders were ready to pay UAH1,880–2,000 per MT for big lots (1,000 MT and up) in ports.
As of this week, feed maize export prices ranged within US$300–310 per MT (FOB Black Sea ports).
Wide ranges of above-mentioned feed maize prices are motivated by fact that trade companies have started declaring 2 purchase prices levels: high level (for agricultural producers) and low level (for middlemen) after new Ukrainian Tax Code having had recently come into force.
Grain export prices, USD/ò
Grain type
09.02.11
02.02.11
January
2011 average
December
2010 average
November
2010 average
Min
Max
Min
Max
FOB, Ukrainian Black Sea port
2nd class wheat*
350
380
338
360
330
308
298
3rd class wheat**
345
355
330
338
313
288
279
Feed wheat
310
320
290
300
276
247
244
Feed barley
280
290
265
275
265
255
253
Feed corn
300
310
285
300
278
248
249
Feed peas
310
340
310
340
317
294
276
Wheat bran
205
220
195
215
191
181
183
Oats
220
230
215
230
209
192
186
DAF
Feed corn
255
265
245
260
249
235
233
Rye
215
230
200
220
208
194
180
*- protein content: minimum 12.5%
**- protein content: minimum 11.0%
Processors Activity
Within reporting week flour millers activity didn’t undergo any significant change. Those flour millers which needed to replenish exhausted grains reserves had to raise their purchase prices. However, even despite purchase prices growth, food wheat sale/purchase operations number was small as wheat holders, who anticipated for wheat prices further growth, appeared to be quite reluctant to make sales. However, it is to be admitted, wheat holders anticipations are quite likely not to come true, — as it is not certain that Government will cancel grains export quoting regime since this year Apr. In fact, domestic market grains demand will significantly decline after grains export ban will be introduced, so agrarians will have to sell their wheat reserves on declared prices. Besides, soon Ukrainian grains market will be strongly influenced by oncoming spring sowing campaign seasonal factor, resulting in agricultural producers being obliged to actively sell their grains reserves in order to replenish their circulating assets.
Average purchase prices for food grains (ÑÐÒ processing plant), UAH/ò
Region
09.02.11
02.02.11
January
2011 average
December
2010 average
November
2010 average
Min
Max
Min
Max
2nd class wheat*
Western
1820
2000
1770
1920
1735
1690
1660
Northern
1850
2000
1800
1960
1765
1720
1700
Central
1880
2000
1840
1960
1760
1705
1680
Southern
1880
2050
1840
2000
1760
1700
1690
Eastern
1880
2050
1850
2000
1775
1725
1720
3rd class wheat**
Western
1770
1860
1730
1860
1675
1610
1590
Northern
1800
1900
1750
1900
1695
1635
1590
Central
1820
1950
1770
1900
1690
1625
1600
Southern
1850
1950
1770
1900
1700
1645
1600
Eastern
1850
1950
1780
1900
1695
1635
1630
*- protein content: minimum 12.5%
**- protein content: minimum 11.0%
