Demand prices for wheat and barley in Ukraine remain very low

The drop in world prices for grains and oilseeds has a negative impact on demand prices for wheat and barley in Ukraine, which continue to fall under the pressure of rising shipping costs.

Domestic prices are pressured by significant stocks of these crops in the country, complex logistics and its high cost for all alternative export routes, pessimism of market participants regarding the possible unblocking of at least part of the deep-sea ports of the Black Sea. In addition, farmers of some European countries, dissatisfied with the increase in the supply of agricultural products from Ukraine, demand to limit or even ban the import of Ukrainian products.

The liberation of Zmiiny Island made it possible to resume navigation through the Ukrainian channel from the ports of Reni and Izmail to the Black Sea, relieving the Romanian Sulina channel, which boosted the export of Ukrainian products and kept prices from collapsing. However, falling water levels in the Danube will reduce vessel loading, which will complicate deliveries and increase freight costs, which are $80-120/t for delivery from Reni to ports in Romania, Turkey or Bulgaria.

Demand prices for food wheat of the new harvest in the ports of Reni and Izmail fell by $10/t to $175-195/t or UAH 5,300-6,000/t, and for fodder – to $160-180/t or UAH 4,800-5,300/t t CRT port.

Demand prices for wheat with a protein of 12.5% and forage for delivery in July-August to Bulgaria were 290-300 and 270-280 $/t DAP, respectively, to Romania – 280-300 and 260-280 €/t DAP (sometimes wheat prices fell by 12.5% to €250/t DAP). At CIF Constanta, asking prices for 12.5% wheat were €310-325/t, and with delivery to Lithuania, they fell by €20/t to €310-320/t DAP.

Low demand from importers and increased offers of the new harvest, even despite forecasts of a reduction in production, led to a decrease in purchase prices for barley to the level of $130-160/t or UAH 4,000-5,000/t with delivery to the ports of Reni and Izmail. Demand prices with delivery to the port of Giurgiulesti (Moldova) were 180-190 €/t, to Romania – 220-250 €/t DAP, and at CIF Constanta – 280-300 €/t.

International traders cannot predict shipping costs, so they are not resuming purchases yet, which keeps domestic prices low.

Farmers are restraining sales in anticipation of negotiations on unblocking the ports announced for July 20-21. However, market participants do not believe in the resumption of their work, given the massive rocket attacks in recent weeks.

Tags: Ukraine, barley, prices, wheat