Ukrainian corn prices have fallen to around $15/t as Turkish demand dries up

The Ukrainian corn market has been under pressure for the past two weeks — prices have fallen by about $15/t from $243 to $225–228/t DAP. The main reason is overheated Turkish demand, which is currently being exhausted. This was stated in a comment to Latifundist.com by Andriy But, Director of the Foreign Economic Activities Department of the AGROTRADE Group.

“Ukrainian corn was the most expensive in the world, largely due to the active demand of Turkey, which bought both for itself and for re-export,” But explains.

Because of this, other traditional importers — Egypt, Italy, Spain — were practically ignored.

On May 1, Turkey issued a quota for the import of 1 million tons of corn with a reduced zero duty instead of the usual 5%. The market initially reacted positively to the news, expecting additional demand, But notes. But in fact, half of the volumes had already been purchased or imported to Turkey earlier – the undeclared grain was waiting in warehouses. The actual additional need was no more than 500 thousand tons.

Then the Turkish state agency TMO announced the sale of 200 thousand tons of corn from domestic reserves, which cooled the market even more. Buyers slowed down, domestic prices in Turkey fell, and after them the purchase rates in Ukraine also decreased.

“That is, in order for the price of corn to go up again, we need to understand how strong the demand from Turkey is still. Because basically all other countries will focus on South America. There is not much time left – the end of May, June, July – and there will already be a new harvest there,” the expert notes.

He added that the news about the EU reducing the import quota for Ukrainian corn does not put as much pressure on the market as the possible introduction of a quota for wheat.

“This quota will be quickly selected and, as far as I understand, there will really be duties on wheat. That is, Ukraine will not send a lot of wheat to Europe. This is probably a bigger problem than for corn. Corn will still go, because the EU imports a lot of corn and it has to be taken from somewhere,” But concluded.

Tags: corn, prices