Ukraine corn secures early deals with Vietnam amid competitiveness rise

Ukrainian corn has secured a few early deals with Vietnam, driven by its enhanced competitiveness against rising prices from the United States and South America. Following the harvest that concluded in early September 2024, several transactions have emerged, signaling a shift in trade dynamics as Vietnam seeks alternatives amid escalating corn costs from traditional suppliers.

In the week ending Feb. 14, reports from various traders and buyers confirmed that four Panamax cargoes of Ukrainian corn were sold for February and March shipments at prices in the high $250s CIF. Following these transactions, offers were quoted at $262/mt CIF.

"Ukraine is an opportunistic origin for Vietnam; when South America is expensive, then Ukraine can find its way in, although not many buyers can handle [this origin]," said a grains trader in Singapore

 In contrast, the price of South American corn offers to Vietnam surged from $260.50/mt CFR on Jan. 14 to $270/mt CFR for March shipments by Feb. 14. This increase was driven by declining production estimates in Argentina and adverse dry weather conditions.

Similarly, prices for US PNW corn destined for Asia also rose sharply, with recent deals to South Korea recorded at $260.85/mt CFR — $25/mt higher than a deal concluded on Jan. 10 at $235.73/mt CFR Pyeongtaek.

A Vietnamese grains importer stated, "[Ukraine corn imports] would be understandable. FOB US PNW increased dramatically last week, so Ukraine will start to become competitive."

The 2024-25 harvest season in Ukraine commenced earlier than usual, primarily due to limited production and weather-related impacts on crops. The harvest began in the last week of August and was completed by September 2024, allowing full-fledged exports to commence by October 2024.

While the flow of Ukrainian corn to Asian markets is not new — over 175,000 mt were shipped to South Korea from Ukrainian ports between Jan. 1 and Feb. 14 — trade with Vietnam remains less common. A grain trader in Geneva highlighted, "There were some Panamax vessels traded there a few years ago, but usually, it is not a significant flow."

Data indicates that the last shipment from Ukraine to Vietnam occurred in May 2024, at the later stages of the crop cycle. However, the current demand, albeit modest, has opened up this trade route in the early months of the marketing year 2024-25, with approximately 66,000 mt of Ukrainian corn loaded from Ukrainian ports between Jan. 1 and Feb. 14 this year.

 "Normally South American corn [is bought at this time], but demand is still open for March/April shipments [into Vietnam]," said a Vietnamese trader source.

A seller from Ukraine commented, "There have been some trades to Vietnam, but nothing massive." Market participants are optimistic about further discussions and deals that could diversify Ukraine's destination markets.

Platts, part of S&P Global Commodity Insights, assessed feed quality corn CFR Northeast Asia price for the May 17 to June 16 arrival period to Pyeongtaek at $263/mt CFR and Platts Ukraine corn FOB POC at $231/mt for Panamax corn for the loading period from March 17-31 on Feb. 17.