Logistical woes in Ukraine drive corn prices higher as port delays persist

Ongoing logistical challenges in Ukraine's internal market are significantly delaying corn availability at ports, resulting in rising prices, according to traders.

Traders indicated that CPT prices to the ports are increasing due to difficulties in delivering harvested corn, which is subsequently reflected in the FOB price. The cost of logistics has also surged. A trader in the origination market said, "Costs have increased by $15-$20, almost doubling, and the wagon turnaround time has decreased by half."

Continuous bombings and attacks have severely impacted the railway system in the country, exacerbating logistical issues. A broker from Ukraine said, "There are delays in deliveries because of the ongoing bombings." Another seller in the origination market added, "CPT prices are rising due to a lack of products in the ports because logistics are terrible. Rocket attacks have made railway operations very challenging."

Additionally, infrastructure obstacles, including electricity shortages, are hindering the drying process for corn, which has high moisture content due to early rains. Despite demand from destination countries, supply is tightening. An exporter from Ukraine said, "Demand is present. The problem lies in the significant delays in harvest and logistical obstacles (air alerts, electricity shortages, etc.). Corn is wet and needs to be dried." The exporter added, "Overall, there's a very small lineup for corn for November so far."

Another exporter from the region concurred that logistical difficulties in Ukraine pose a significant challenge in sourcing corn.

Producers are also concerned about fulfilling earlier contracted volumes. A producer from Ukraine said, "Currently, my main task is to deliver corn to the port terminals. The corn harvest has been delayed, and there are major issues with the railway infrastructure following the shelling. We still need to deliver 100,000 mt of corn to the port by the end of the month."

"I don't have any news about the situation improving; it's only getting worse," the producer added.

As a result, the Platts Ukraine corn FOB POC price rose by $5/mt month over month, increasing from $213/mt on Oct. 13 to $218/mt on Nov. 13. Price indications continue to show upward trends.

Platts, part of S&P Global Commodity Insights, assessed Ukraine corn FOB POC at $218/mt on Nov. 13 for loading over Dec. 11-25.