Grain prices in Ukraine
Prices for agri commodities, Ukraine, FOB, Black Sea ports, USD/t
2021 wheat price movements in Ukraine
Wheat prices in Ukraine are constantly changing. To trade in this commodity successfully, it is important to know near-term forecasts for its cost. A lot of factors affect the price: grain export market trends, grain quality, supply and demand, competition, wheat stocks available in storage and many others. So, the key wheat pricing factors include the grain quality.
Classification of grain quality parameters
Grain quality control is an important step in preparing the wheat for export or storage. In a highly competitive world market, ensuring the proper quality of the commodity is an especially relevant point.
The suitability of grain and, correspondingly, the cost of wheat in 2021 is determined by the following characteristics:
- physical and chemical;
- consumer characteristics.
At the same time, there are universal criteria for determining the wheat quality:
- Freshness. Grain is graded based on its kernel size, odor, color, and other external characteristics. Wheat that ripened under optimal conditions is almost odorless, bright in color, has 5-10 mm-sized, filled, slightly hairy kernels.
- Pest infestation. Wheat is to be clean and free from insect infestations. Infestation is expressed by the presence of live insects in 1 kg of grain.
- Moisture content. It is expressed as a percentage of the amount of absorbed liquid per weight unit. Permissible moisture content for wheat is 14.5%. Upon mutual agreement between the seller and the buyer, wheat with above-standard moisture content may be accepted, but the price per ton will be lower.
- Impurities. Percentage content of various impurities in the grain parcel – waste and broken substandard kernels.
The above criteria are used to identify the wheat grade, which determines the grain’s price per ton and suitability for subsequent processing.
How much does wheat cost in Ukraine in 2021?
Wheat pricing is influenced by many factors. The following ones are considered to be most important:
- size of the wheat crop
- competition and price behavior in the world market
- behavior of other grains’ prices
- availability of carryovers from last year in granaries;
- analyst forecasts for next year’s crop.
The pricing factors include behavior of grain traders, who provide loans to wheat producers secured by the future harvest. In particular, grain traders’ purchasing prices reflect price fluctuations in the global wheat market.
Almost all wheat buyers make so-called forward grain purchase deals several months before the actual harvest. Through these contracts, farmers can partially finance growing the future wheat crop. The forward deals are priced based on market expectations for wheat demand from major global buyers, production costs, past trends and other indicators.
How are wheat sales made?
Selling wheat on the domestic market or for export is not easy and requires many factors to be taken into account. The selling process itself can be divided into the following stages:
- Assessment of the grain quality and prospective volumes for sale.
- Choosing the buyer giving the best price. You can try to sell wheat yourself or trust an experienced trader.
- Sale time. Selling wheat immediately after harvest is often unprofitable: the price per ton falls due to market oversaturation. It is possible to hold back the grain, provided there is a good silo where your wheat will retain all its properties. Otherwise, the price may sink greatly.
If you are going to sell wheat for export, there are some legal details to be aware of. To avoid wasting time and money, contact a reliable intermediary who will complete all the documents, find a good buyer, and help carry out the transaction from start to finish.
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