Export prices of Ukrainian wheat broke the maximum. What's going on?!




Despite the fact that since the beginning of April 2020, the price situation on the Ukrainian export market remained highly volatile, due to the exchange rate fluctuations, and the general tension, and the current uncertainty within the country and on the global market, since the end of last week wheat prices again started becoming more expensive.

The high demand of importers and a series of tenders caused the resumption of the growth of wheat prices, including the tenders by Turkey and Jordan for the supply of the grain of the harvests-2019 and 2020. At the same time, cancellation of tenders last week for the purchase of wheat by the governments of Algeria and Egypt, postponement of the tender date by Ethiopia, as well as information about possible changes in the terms of GASC and SAGO tenders, caused some uncertainty in the market segment. Nevertheless, in the current week Egypt purchased 120 thsd tonnes of Russian wheat, which in terms of the current ban on the exports of the Romanian grain, made its impact on the Black Sea market, reported the Head of the local markets department at APK-Inform Agency, Anna Tanskaya.

According to APK-Inform, as of the beginning of April 16 the offer prices of wheat with 12.5% protein content with delivery in late April-early May varied within 227-232 USD/t FOB, and the bid prices on the basis of CPT-port reached 6`450-6`775 UAH/t, which broke the maximum figures since the beginning of the season. As a reminder, previously the maximum prices were fixed at the end of January 2020, when the offer prices totaled 226-231 USD/t FOB, and the bid prices reached 5`950-6`300 UAH/t CPT-port.

Due to the rise of the prices of Ukrainian wheat, the demand somewhat decreased, and the appearance of grain offers from France and the USA at the GASC tender raised red flags. In addition, in terms of the restrictions approved by the Memorandum of Understanding, Ukrainian traders hold back on actively entering into contracts for the supply of wheat of the harvest-2019, and many importers already switched to forward purchasing of the future crop. Also, the long-awaited precipitation throughout most of the country slowed down the more rapid increasing of the prices, but it was insufficient to saturate the soil with productive moisture content (except for the northern region). In addition, the weather conditions in the country worsened, and the frosts developed, the expert concluded.