Export prices for Ukrainian corn reached a seasonal high on expectations of increased demand from Turkey

The Turkish government introduced an additional import quota of 1 million tons of corn with a 5% duty (compared to the current 130%) until June 30, which led to a speculative increase in corn prices in Ukrainian ports to the highest level of the season – $230/ton.

Under the new rules, Turkish buyers will be able to import no more than 8,000 tons of corn in a single transaction with reduced duty, which will limit supplies from large international companies.

There have also been rumors that the Turkish government plans to allow flour mills to import wheat duty-free under the inward processing regime, which has already led to an increase in food wheat prices in Ukraine by $3-5/t.

Export prices for corn in the Black Sea ports of Ukraine have increased by $5-8/t since Monday to $227-230/t or UAH 10,600-10,800/t, with prices from small traders being $1-3/t higher than those from international trading companies.

Traders understand that the additional 1 million tons of corn for Turkey will not necessarily be supplied from Ukraine, as Russian and Turkish companies are already storing certain volumes of corn and wheat in bonded warehouses in Turkey in anticipation of the reduction in duties, which has been talked about for a long time.

In the MY 2024/25 (as of March 17), Ukraine exported 15.84 million tons of corn (17.6 million tons in the same period last year) out of the projected 22 million tons. However, the export rate is gradually decreasing, as Ukrainian corn remains the most expensive among the main exporters.

We should not expect further growth in corn prices in Ukraine as long as they significantly exceed corn quotes on world exchanges.

June corn futures on the Paris exchange rose 1.3% yesterday to €216.75/t or $236.5/t, down 2.9% for the month amid rising supplies of American and Brazilian corn.

May corn futures on the CBOT exchange in Chicago yesterday rose by 0.6% to $181.9/t (-10.8% for the month) on expectations of the introduction of US tariffs on Mexico and other countries from April 2, as export potential by the end of the season is estimated at 32 million tons.

Starting in April, a new crop of corn from Argentina will enter the world market, with the country planning to export 36 million tons, in particular to increase supplies to the European market.

Recall that according to forecasts, the EU will import 19.5 million tons of corn in 2024/25MY, of which as of March 2, it has already purchased 13.8 million tons, which is 8% higher than last year’s pace. By the end of the season, the EU should purchase another 5.7 million tons of corn, which can be supplied from Ukraine, Argentina, Canada or the USA.

Given the good weather conditions for corn sowing in Brazil and low corn exchange prices, Ukrainian farmers should intensify corn sales at high prices. An example is rapeseed prices on the Paris exchange, which collapsed in the second half of the season due to uncertainty with the introduction of tariffs and disruption of supply chains.