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December 7 2013, 12:36 Source: APK-Inform Views: 3380

Start of the season on the Ukrainian market of feed maize

 

The beginning of 2013/14 MY was quite a surprise for many players of feed maize market both in terms of trading activity and price formation. The present article will concentrate on the harvesting campaign, and the main problems of agricultural producers and traders.

 

Taking into account the adverse weather conditions, which formed during the harvesting campaign, many participants of the market faced some difficulties. Heavy downpours significantly shifted its terms. Only in the beginning of October 2013 the weather changed, and many agricultural producers managed to start harvesting works. According to the Ministry of Agrarian Policy, as of November 26, 2013, Ukraine harvested the grain throughout 91% of the planned areas, and produced 27.6 mln tonnes of maize with the average yield of 6.23 t/ha. However, taking into account the difficult weather conditions during the harvesting works, the general harvest of the grain may drop to 26 mln tonnes in clean weight, according to estimations of APK-Inform.

The buyers did not provide any specific complaints as for the qualitative indices of feed maize. Increased grain moisture is the only problem, which significantly affects its price. The moisture content of maize which came on the market in most cases varied within 18-24%.

In the beginning of the season the catastrophic shortage of vehicles became another problem. Taking into account the fact that beginning of the harvesting campaign was shifted by nearly one month, buyers faced some problems with delivery of the grain to the elevators and ports. Also, since the end of October agrarians started harvesting sunflower seed, soybeans and other crops, therefore motor vehicles were very required on the market. And hired transport significantly increased the costs of traders.

Price situation

In early October, the maximum purchasing prices of exporters gradually rose to 1250 UAH/t EXW, due to the need to form the required volumes of the grain and close late contracts. In turn, grain processors held previously established rates of demand. However, some of them also increased the maximum prices to 1400 UAH/t EXW, as needed to purchase the high quality grain.

We should note that at the end of October, the weather improved, thereby the harvesting campaign greatly intensified. The number of maize offers was estimated as sufficient, by the market participants.

According to the monitoring results conducted by experts of APK-Inform Agency, in November the maximum purchasing price of export-oriented companies and grain processors reduced to 1210 UAH/t and 1260 UAH/t EXW, respectively.

Export potential

According to APK-Inform Agency, in 2013/14 MY Ukraine is expedient to supply nearly 18 mln tonnes of feed maize on foreign markets, against 12.7 mln tonnes in the previous year. There are all necessary prerequisites, namely the forecasted production at the level of 26 mln tonnes, and expansion of the geography of maize deliveries.

There should be noted some changes in the geography of Ukrainian maize exports. If in 2012/13 MY Ukraine shipped the basic volumes of the grain to the EU, then in the current season there should be expected an increased interest of the world major importers of maize, such as China, South Korea, Japan, Taiwan, Iran, Malaysia, Egypt, etc.

Despite the hitch in the beginning of the season, Ukrainian traders managed to catch up. So, in the period of October 1 - November 26, 2013, Ukraine supplied more than 4 mln tonnes of maize on foreign markets, against 2.7 mln tonnes in the same period of the previous season.

The active work of agrarians in the field assisted to significantly accelerate the exports of feed maize. The grain volumes in the ports are growing daily. Primarily the offer prices led to increasing of the interest of importers, which according to APK-Inform Agency, varied within 201-204 USD/t FOB at the end of November 2013, against 304-307 USD/t FOB in the same period last season.

 

 

 

Andrei Druzyaka, General Director of KiyAgroProduct, commented the further development of the price situation on the Ukrainian export market of feed maize: "Ukraine continues harvesting feed maize, and it is unclear what volumes and what quality the country will harvest at the end. I believe that the general harvest of 26 mln tonnes is somewhat overstated. So, most likely, the prices of export-oriented companies are fixed at the level of 200 USD/t FOB, and will not decline in the future. The reason for the situation development is the steady growth of bid prices for milling wheat, which market is adjacent to the market of feed maize".

 

Julia Shatravka,

expert of grain markets of the information service of APK-Inform Agency

Comments
  • kamran tajbakhsh

    A professsional report ..vehicles although in shortage but another strain was the inability of port silos to take in grains also mutiplied the trouble...trucks had to wait for many days until they get aturn to unload...a more efficient logistic need to be devised by government and private sector taking into consideration the rail road capacities and river transportation capacities.
    Still in sales europe was ahead by selling wheat at lower prices to the satisfaction of buyers and at the cost of corn. so It would be wise for corn producers in ukraine not to wait for higher market condition as many factors effect the sale ..besides the ware housing and drying cost...sooner the money comes back the more strength can be found in the cash received than possibilities of few dollars higher price
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