Escalation in the Middle East may affect Ukrainian corn prices, even though Ukraine does not supply it to Iran directly — broker
The escalation of the conflict in the Middle East creates additional uncertainty for global agricultural markets. The region imports about 20 million tons of corn every year, and for Ukraine this is one of the key sales areas. A significant part of Ukrainian exports is traditionally focused on this market, so any decrease in purchasing activity is immediately reflected in prices. This was reported by White Brokers broker Oleg Zlatov in a comment to Latifundist.com.
“It is also important that the recent increase in corn prices in Ukraine was largely caused by the activation of buyers from the Middle East. It was their demand that supported the market and allowed prices on DAP terms at Ukrainian ports to strengthen. Accordingly, if this demand stops or slows down due to military risks, the market may lose one of the main growth drivers,” he says.
According to Zlatov, Ukraine does not actually supply corn to Iran directly, but Turkey plays an important role as a trade hub. Part of the volumes sold to Turkish companies end up in Middle Eastern markets. Therefore, even indirect risks in the region affect Ukrainian exporters.
He noted that in the short term, financial risks cannot be ruled out. If some contracts with Middle Eastern counterparties are revised, postponed or canceled due to force majeure, individual Ukrainian traders may face cash gaps or even defaults on obligations. This, in turn, may lead to additional sales of goods “off the shelf” or resale of contracts, which will increase pressure on prices.
“Thus, given the role of the Middle East as a major importer and the recent impact of its demand on market growth, the current situation creates increased risks specifically for prices for DAP ports in Ukraine. Under DAP conditions, the western border impact may be more moderate, but in the event of a redistribution of volumes from ports to the western direction, additional price pressure is possible there,” Zlatov added.
The broker also noted that the Ukrainian corn market continues to be additionally pressured by the already high freight. Shipowners are massively “switching” to work in Russia due to greater supply and lower military risks.
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