Despite global grains market considerable slackening, Ukrainian domestic grains market didn’t undergo significant changes within this week.
As earlier, Kernel, Khlib Investbud and Valars remained domestic market main food wheat purchasers.
However, it is reasonable to ask why these companies continued making purchases ? As it is known, grains export quotas are given only on condition that export companies have accumulated enough grains and are able to make export shipments. But now prospects of Ukrainian grains export quoting regime canceling since Apr 2011 have become quite uncertain, — what makes these companies active food wheat purchases rather illogical. So, one of possible reasons to explain it is that these companies simply try to buy necessary wheat lots in order to fulfill their earlier concluded contracts. Another possible reason is that these companies are just strengthening their market competitiveness and try to demonstrate their financial condition stability: as of now, Kernel is Warsaw Stock Exchange participant and Valars is going to start IPO (Initial Public Offering) on Warsaw Stock Exchange, — what is to be confirmed with financial activity real results. As it is known, if company remains inactive and doesn’t make any market purchases/sales, its shares value is quite possible to start significantly declining on stock exchange.
Within reporting week feed maize has appeared to be second most demanded among all other grains. Not only Kernel, Khlib Investbud and Valars, butalso big trader Serna and several small companies were actively purchasing feed maize. It is to be admitted, recently Ukrainian companies have exported (beyond grains export quota) big feed maize lots to countries with which Ukraine had earlier signed free trade agreements: thus, as to operative data, within this year Mar 1–15 Ukrainian companies have exported in total ≈ 316,000 MT grains (incl. maize — 247,000 MT/wheat — 56,400 MT).
It is to be admitted, within this week feed grains were actively purchased also by mixed feeds plants.
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.
As of this week, feed barley purchase prices remained same as within previous week: UAH1,850–2,000 per MT (EXW-ex-elevator, depending on regions/lots).
Within reporting week feed barley US$ purchase prices were US$260–270 per MT (FOB Black Sea ports: Pivdenniy, Illichivsk, Odesa).
Wheat
Within reporting week traders made feed wheat purchases. As of this week, feed wheat market prices ranged within UAH1,800–1,900 per MT (EXW-ex-elevator, depending on regions).
Within this week feed wheat FOB basis export prices fluctuated within US$280–290 per MT.
As of this week, domestic market 3 and 2 classes food wheat prices were correspondingly UAH1,950–2,050 per MT and UAH2,000–2,180 per MT; at same time, 3 and 2 classes food wheat export prices (if global market prices conjuncture is taken into account) were correspondingly US$310–335 per MT (FOB Black Sea ports) and US$300–310 per MT (FOB Black Sea port 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, — UAH1,880–2,000 per MT (EXW-ex-elevator). It is to be admitted, traders were ready to pay UAH2,050–2,100 per MT for big lots in ports.
As of this week, feed maize export prices ranged within US$280–290 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 come into force.
Grain export prices, USD/ò
Grain type
16.03.11
09.03.11
February
2011 average
January
2011 average
December
2010 average
Min
Max
Min
Max
FOB, Ukrainian Black Sea port
2nd class wheat*
310
335
350
375
350
330
308
3rd class wheat**
300
310
335
350
335
313
288
Feed wheat
280
290
300
310
294
276
247
Feed barley
260
270
280
290
276
265
255
Feed corn
280
290
300
310
292
278
248
Feed peas
300
330
310
340
320
317
294
Wheat bran
210
220
215
230
209
191
181
Oats
210
220
220
230
219
209
192
DAF
Feed corn
245
260
255
265
255
249
235
Rye
210
220
215
230
216
208
194
*- protein content: minimum 12.5%
**- protein content: minimum 11.0%
Processors Activity
On Ukrainian domestic grains market, food wheat price range remained, upon whole, relatively stable within last few weeks (though average price constantly tended towards slight growth).
In meanwhile, within this week domestic market 2 and 3 classes food wheat offer has got slightly activated (except for western/eastern regions); at same time, some flour millers continued raising up, as earlier, food wheat purchase prices. As a result, market situation has become unclear both for food wheat producers as well as flour millers: on one hand, now food wheat producers urgently need circulating assets in order to carry out spring sowing campaign, but must abstain from food wheat sales as they wait for prices further growth; on other hand, flour millers simply can’t work in full volume due to circulating assets shortage and constant administrative pressure (it is to be admitted, some flour milling integrated plants, — in part., those belonging to UkrainianStateFood and Grain Corporation, — even haven’t right to make grains resources purchases/flour sales).
In meanwhile, experts say both agricultural producers as well as processors will face hard agricultural season beginning due to fuel/lubricants, railway cargo transportation tariffs, municipal services, seeds and fertilizers prices boost.
Within this week rye offer remained almost zero low, — what forced flour millers to grow rye purchase prices up to UAH2,000 per MT. Flour millers admit some agrarians offered rye even at UAH2,300 per MT (incl. shipment from elevators).
Average purchase prices for food grains (ÑÐÒ processing plant), UAH/ò
Region
16.03.11
09.03.11
February
2011 average
January
2011 average
December
2010 average
Min
Max
Min
Max
2nd class wheat*
Western
2100
2400
2050
2300
1945
1735
1690
Northern
2100
2300
2050
2230
1975
1765
1720
Central
2100
2250
2050
2220
1985
1760
1705
Southern
2100
2250
2050
2200
2005
1760
1700
Eastern
2100
2300
2050
2250
2000
1775
1725
3rd class wheat**
Western
2050
2250
1980
2200
1880
1675
1610
Northern
2050
2200
2000
2150
1910
1695
1635
Central
2050
2200
2000
2120
1925
1690
1625
Southern
2050
2200
2000
2120
1940
1700
1645
Eastern
2050
2200
2000
2150
1935
1695
1635
*- protein content: minimum 12.5%
**- protein content: minimum 11.0%
