Ukraine corn price surge to two-year high amid farmer retention

Ukraine's corn prices have reached a two-year high, driven by limited supply from farmers. Platts, part of S&P Global Commodity Insights, assessed Ukraine's corn FOB POC at $241/mt on April 11, up from $237/mt the previous week. This marks the first time since March 2023 that Ukraine's FOB corn prices have reached this level.

In Ukraine, CPT prices are rising as farmers retain their stocks. This season's lower production due to unfavorable weather conditions has resulted in a limited supply from the region, with farmers only supplying small quantities to the market due to their dwindling stocks.

Market participants indicate that the less-than-promising weather, which is expected to hinder the production of new crops, is also pressuring farmers to hold onto their stocks as they remain uncertain about the upcoming crop. A trader from Ukraine remarked, "Due to weather conditions, farmers are holding back volumes."

According to traders, CPT prices at Ukrainian ports have reached $231/mt, reflecting a 49% increase from the previous year. In 2024, during this same period, CPT prices were recorded at $155/mt in Ukrainian ports.

The lower corn production in the Black Sea region, including Ukraine, Romania, Bulgaria, and Serbia, has increased retention among farmers across the region, further limiting the availability of corn this season. However, the comparatively better quality of Ukrainian corn than that of Romania, Bulgaria, and Serbia has resulted in higher demand.

A seller in Ukraine said, "The main driver of the prices is farmer retention." The trader emphasized that farmers exert pressure on exporters, suggesting that demand does not necessarily need to be destination-driven.

On March 19, Turkey reduced the import tariff for corn to 5% for 1 million mt, effective until June 30. This has facilitated an increase in the flow of Ukrainian corn to Turkey, which remains a key destination for Ukrainian corn.

However, the diminishing old crop stocks in the Ukrainian market also constrain the region's supply. Traders have indicated that the old crop is expected to be sold out by the end of May or early June. A seller from Ukraine stated, "There isn't much of this old crop left." The trader added, "With both Italy and Turkey reliant on Black Sea origins, this will be sold without issues."

In Italy, a stream of corn vessels has been arriving at key ports on the east coast of the country, resulting in a wait time of two weeks to unload, as importers try to take advantage of lower prices in the spot market as opposed to the deferred market, according to an Italy-based buyer.

"You can buy a handy ship for around $255 CIF EC Italy, but it's $5/mt more for loading in May. Therefore, importers are trying to buy as much as possible now. The problem is there is no real demand in the market," he added.