Corn shortage in the EU drives up prices for long-distance deliveries from Ukraine

Purchase prices for fodder corn for delivery in January-February are mostly announced within the range of €192–198/t FCA-Chop.

This week, demand prices for fodder corn of the new harvest for delivery in January-February have increased on the Ukrainian export market. This was reported by IA APK-Inform.

The dynamics of prices for the near and far supply periods diverge. The decrease in prices for the coming months is due to a combination of logistical and fundamental factors. Quotas for European trains to the western border have practically been bought up for other crops, and a jump in transport costs is expected in October-December.

The seasonal pressure from harvesting the new harvest in Ukraine is being intensified by the blockade of Black Sea ports. Additionally, European prices are being pressured by the temporary influx of cheaper corn from South America and the beginning of the harvest in Europe itself.

Instead, a growing trend is forming for long-term supply periods. The heat has caused a record 19-year corn deficit in the EU, which supports high long-term demand for Ukrainian products. Due to the blockade of deep-sea ports, buyers are reorienting to the western border and limited domestic consumption.

Additionally, prices are supported by the entry into force of new European tariff rate quotas (TRQ) in the new year and the restraint of farmers in sales – they do not want to fix low current prices, waiting for an increase in the future.

Currently, purchase prices for feed corn of the new harvest with delivery in January-February are mainly announced in the range of €192–198/t FCA-Chop, which is €1–2/t more than the indicators at the end of last week.

As USM previously wrote, wheat exports from the Black Sea are falling, but the world market has not yet reacted with a price increase.