The momentum of wheat exports from Ukraine remained firm during the week to Feb. 14 despite the ongoing uncertainties with Russia, but export prices have slumped over 4% on the month.
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Ukraine's exported over 300,000 mt of wheat during the week to Feb. 14, taking overall shipments to 17.5 million mt since the beginning of marketing year 2021-22 (July-June), according to data released by agriculture ministry on Feb. 14. Wheat exports through Feb. 14 were up 33% on the year.
Ukraine shipped out 16.6 million mt of wheat in MY 2020-21.
S&P Global Platts Analytics has projected Ukraine to export 22.5 million mt of wheat in MY 2021-22, while the US Department of Agriculture forecast the country's wheat exports at 24.2 million mt in its World Agricultural Supply and Demand Estimates report Feb. 9.
Ukraine's wheat exports were expected to jump sharply on year due to globally tightening supplies.
However, the ongoing tensions with Russia may cast a shadow on its export campaign, trader said.
The government had signed a pact with traders in October to limit wheat exports to 25.3 million mt in MY 2021-22 to check domestic inflation.
Ukraine has harvested around 33 million mt of wheat in MY 2021-22, up from 25.4 million mt in MY 2020-21, according to the ministry.
Platts Analytics projected Ukraine's wheat production at 31.2 million mt for MY 2021-22. The USDA has pegged Ukraine's wheat output for the year at 33 million mt.
Farmers in Ukraine planted winter wheat across 6.2 million hectares for MY 2022-23 as of Dec. 30, 2021, accounting for nearly 94% of the forecast area of 6.7 million hectares, according to agriculture ministry data.
Prices decline on uncertainties
Despite the face pace of shipments, Ukraine's wheat export prices have softened over the month and decline $13/mt due to the uncertainties over the tensions between Ukraine and Russia.
Russia has been amassing troops along Ukraine's border and it is leading to uncertainties in the region and hitting trade prospects of Black Sea wheat.
Apart from the tensions, prices also fell due to logistical concerns like port closures amid snowfall.
S&P Global Platts assessed FOB prices of 11.5% protein wheat from Ukraine at $306/mt on Feb. 14, down $1/mt on the day.
Despite the tensions, traders expect the demand for Ukraine's wheat may recover in the near term as Russia imposes its export quota from Feb. 15.
Russia imposes an export quota to limit wheat shipments at 8 million mt between Feb. 15 and June 30 to limit domestic price rise.
An export limit from the world's largest wheat exporter will further tighten supplies and may boost demand for the Ukrainian grain.
"Demand for Ukrainian wheat may remain firm in the near term as the Russian export quota kicks in today," a Kyiv-based trader said.
However, the ongoing tensions between the two nations may bring some volatility in export prices in the coming weeks, traders said.