Ukrainian wheat exports are on the rise, while the domestic market offers favorable conditions

Ukrainian wheat exports in February and January showed a downward trend, amounting to less than a million tons per month. However, the situation began to change after Russia introduced quotas for wheat exports, which encouraged importers to switch to Ukrainian products.

This was reported by analysts of the PUSK agricultural cooperative, established within the VAR.

“Many importers who traditionally purchased Russian wheat began to consider Ukrainian origin as an alternative. Among them are Egypt, Algeria, Tunisia, Morocco, Romania and Bulgaria. This has already led to an increase in the rate of Ukrainian wheat exports. According to preliminary data, 750 thousand tons have already been contracted for March, and some traders predict that the volumes may reach a million tons,” the PUSK analytical department noted.

Despite the growth in demand for Ukrainian wheat, the situation with stocks on the domestic market remains tense. As of March 1, stocks are estimated at 7.4 million tons, which is significantly less compared to the previous season, when they exceeded 10 million tons. This creates risks of limited supply on the market and may lead to price fluctuations.

“Competition between exporters can significantly affect pricing policy, especially given the decrease in stocks. Some traders are already choosing a strategy of gradually reducing the pace of sales, waiting for more favorable conditions,” the PUSK adds.

At the same time, the domestic market for food wheat in Ukraine is demonstrating increased demand from processors. Enterprises in Kyiv and Vinnytsia regions are ready to pay UAH 10,800-11,000/ton for second-class wheat, which almost corresponds to export prices.

“Processors are actively competing for the second grade of wheat, which makes selling on the domestic market more profitable than exporting. If farmers see favorable conditions on the domestic market, it makes sense to take advantage of this and sell products locally,” experts believe.

Currently, the market continues to grow inertially, but analysts warn that this trend may change in the coming weeks. Historically, the second half of February, March and April are characterized by a decrease in wheat prices.

“We are observing some subsidence of the stock market, and this may negatively affect Ukrainian exports. In addition, factors of the new harvest will also begin to play their role, especially in the second half of April and May, when the first data on crops and yield forecasts in Europe, the Russian Federation, Ukraine and the USA will appear,” analysts note.

In particular, Ukraine is experiencing regional moisture problems in Dnipropetrovsk, Kharkiv, Zhytomyr and Vinnytsia regions, which may affect the quality and volume of the harvest.

The coming weeks will be crucial for shaping the further dynamics of wheat prices in Ukraine.

Tags: Ukraine, export, prices, wheat