Other countries to compensate any possible deficit of Ukrainian grains on the world market – expert

Source

APK-Inform

2203

Any possible shortage of Ukrainian wheat supply on the world market due to the difficult political situation in the country, may be completely compensated by increasing of the grain supply from other countries, declared Matt Ammerman, Commodity risk manager on Eastern Europe /Black Sea region of the company INTL FCStone Ltd., to journalists of APK-Inform Agency on March 13.

According to M.Ammerman, first of all, it is Russia, due to its geographical location. Countries of the Asia-Pacific region, such as Australia (there is expected rather significant increase of grain production), and India (beginning of the harvesting campaign of new crop grains), will take the second position. The third position is the EU, especially Germany, which grain export potential significantly increased. At the same time, the USA can also become some alternative the supplies of Ukrainian grains.

However, potential importers will consider the US grains only in the case of substantial price attractiveness, which can compensate the freight cost. But taking into account, the current bullish trend on the global wheat market, it is doubtful that the US grain will make a really significant competition on the market.

As for the maize market, the grain supplies from the USA will take the leading role, because the price of US maize is quite attractive, despite the recent bullish trend, explained M.Ammerman. The European grain may become another alternative to Ukrainian maize on the world market, because its harvest in the current season significantly increased. At the same time, the grain originating from the EU can become the serious competitor on the world market only in several months. As for the near-term prospects, only North and South American maize can form the main alternative to the Ukrainian grain. For example, in the nearest future Brazil is expected to start the harvesting campaign, and despite the forecasted reduction of the harvest volumes, the volume of its exports will remain at the high level, and due to the low prices, the country may become the serious competitor to the USA, said the expert.

While speaking about the dynamics of price development on the world grain market, M.Ammerman noted that it is likely to be bullish.

The poor condition of winter wheat areas in several countries is the main factor to support the prices. In addition, the Ukrainian factor also gave its support for price rising, though not so much, said the analyst, adding that the world market should expect for the further growth of prices for both Ukrainian wheat and the US grain futures on the CBOT.

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