Russian dumping and record harvest in Argentina put pressure on Ukrainian wheat prices
Ukrainian wheat prices fell to $214/t for grade 3 and $215/t for grade 2 DAP-port amid weak export demand. Market pressure stems from low CIF/FOB buying, aggressive Russian exports, ample global supply prospects, high freight costs, and expectations of a record Argentine harvest.
Last week, prices for Ukrainian wheat decreased. The cost of grade 4 wheat decreased to $205/t DAP-port, grade 3 wheat – to $214/t DAP-port, and grade 2 wheat – to $215/t DAP-port. This is reported by White Brokers.
“Accordingly, against the background of weakening currency quotes, an active decrease in prices was also observed in the hryvnia equivalent. The key factor of pressure on the market remains low purchasing activity on the CIF and FOB bases, which significantly limits the export opportunities of Ukrainian traders,” the report says.
As analysts noted, an additional negative impact is exerted by the aggressive export policy of Russia, which continues to massively offer wheat to the world market, in particular to the main sales destinations for Ukraine – the countries of North Africa, Turkey and Indonesia. Significant carryover stocks in the Russian Federation allow it to maintain a high level of supply and dump prices, which increases competition for Ukrainian grain.
In addition, information about a potentially record wheat harvest in Argentina continues to put pressure on world prices, which creates additional expectations of excess supply on the global market. The combination of these factors leads to the preservation of low demand for Ukrainian wheat.
The situation is also complicated by the increase in freight costs associated with high military risks for shipping, which reduces the competitiveness of Ukrainian grain in distant markets. Given the current factors, the decline in prices on the Ukrainian wheat market may persist in the short term, analysts concluded.
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Source : Ukr Agro Consult
